Welltower (WELL) 10-K 2015 FY Annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

Commission File No. 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)

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

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $1.00 par value	New York Stock Exchange
6.50% Series I Cumulative Convertible Perpetual Preferred Stock, $1.00 par value	New York Stock Exchange
6.50% Series J Cumulative Redeemable Preferred Stock, $1.00 par value	New York Stock Exchange
4.800% Notes due 2028	New York Stock Exchange
4.500% Notes due 2034	New York Stock Exchange

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

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

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

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  R 

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  ☑ 

The aggregate market value of the shares of voting common stock held by non-affiliates of the registrant, computed by reference to the closing sales price of such shares on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter was $23,029,716,957.

As of January 31, 2016, the registrant had 355,140,936 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 5, 2016, are incorporated by reference into Part III.

WELLTOWER INC.

2015 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business	2
Item 1A.	Risk Factors	34
Item 1B.	Unresolved Staff Comments	42
Item 2.	Properties	43
Item 3. Item 4.	Legal Proceedings Mine Safety Disclosures	45 45
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6.	Selected Financial Data	47
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	72
Item 8.	Financial Statements and Supplementary Data	73
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	107
Item 9A.	Controls and Procedures	107
Item 9B.	Other Information	108
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	109
Item 11.	Executive Compensation	109
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	109
Item 13.	Certain Relationships and Related Transactions and Director Independence	109
Item 14.	Principal Accounting Fees and Services	109
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	110

PART I

Item 1.  Business 

General

Welltower Inc. (NYSE:HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure.  The Company invests with leading seniors housing operators, post-acute providers and health systems to fund real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  Welltower^TM, a real estate investment trust (“REIT”), owns properties in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.  Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.  More information is available on the Internet at www.welltower.com.  The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.

Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund operations, meet debt service obligations (both principal and interest), make dividend distributions and complete construction projects in process. We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.

References herein to “we,” “us,” “our” or the “Company” refer to Welltower Inc. and its subsidiaries unless specifically noted otherwise.

Portfolio of Properties

Please see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Executive Summary – Company Overview” for a table that summarizes our portfolio as of December 31, 2015.

Property Types

We invest in seniors housing and health care real estate and evaluate our business on three reportable segments: triple-net, seniors housing operating and outpatient medical. For additional information regarding our segments, please see Note 17 to our consolidated financial statements.  The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2 to our consolidated financial statements.  The following is a summary of our various property types.

Triple-Net

Our triple-net properties include independent living facilities and independent supportive living facilities (Canada), continuing care retirement communities, assisted living facilities, care homes with and without nursing (United Kingdom), Alzheimer’s/dementia care facilities, long-term/post-acute care facilities and hospitals. We invest primarily through acquisitions, development and joint venture partnerships. Our properties are primarily leased to operators under long-term, triple-net master leases. We are not involved in property management.  Our properties include stand-alone facilities that provide one level of service, combination facilities that provide multiple levels of service, and communities or campuses that provide a wide range of services.

Independent Living Facilities and Independent Supportive Living Facilities (Canada).  Independent living facilities and independent supportive living facilities are age-restricted, multifamily properties with central dining facilities that provide residents access to meals and other services such as housekeeping, linen service, transportation and social and recreational activities.

Continuing Care Retirement Communities.  Continuing care retirement communities typically include a combination of detached homes, an independent living facility, an assisted living facility and/or a long-term/post-acute care facility on one campus. These communities appeal to residents because there is no need to relocate when health and medical needs change. Resident payment plans

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vary, but can include entrance fees, condominium fees and rental fees. Many of these communities also charge monthly maintenance fees in exchange for a living unit, meals and some health services.

Assisted Living Facilities.  Assisted living facilities are state regulated rental properties that provide the same services as independent living facilities, but also provide supportive care from trained employees to residents who require assistance with activities of daily living, including, but not limited to, management of medications, bathing, dressing, toileting, ambulating and eating.

Care Homes with Nursing (United Kingdom).  Care homes with nursing, regulated by the Care Quality Commission are licensed daily rate or rental properties where the majority of individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for various national and local reimbursement programs.  Unlike the U.S., care homes with nursing in the U.K. generally do not provide post-acute care.

Care Homes (United Kingdom).  Care homes, regulated by the Care Quality Commission, are rental properties that provide essentially the same services as U.S. assisted living facilities.

Alzheimer’s/Dementia Care Facilities.  Certain assisted living facilities may include state-licensed settings that specialize in caring for those afflicted with Alzheimer’s disease and/or other types of dementia.

Long-Term/Post-Acute Care Facilities.  Our long-term/post-acute care facilities generally include skilled nursing/post-acute care facilities, inpatient rehabilitation facilities and long-term acute care facilities.  Skilled nursing/post-acute care facilities are licensed daily rate or rental properties where the majority of individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for Medicaid and/or Medicare reimbursement in the U.S. or provincial reimbursement in Canada.  All facilities offer some level of rehabilitation services.  Some facilities focus on higher acuity patients and offer rehabilitation units specializing in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation.  Inpatient rehabilitation facilities provide inpatient services for patients with intensive rehabilitation needs.  Long-term acute care facilities provide inpatient services for patients with complex medical conditions that require more intensive care, monitoring or emergency support than is available in most skilled nursing/post-acute care facilities. 

Hospitals.  Hospitals are acute care facilities that provide a wide range of inpatient and/or outpatient services, including, but not limited to, surgery, rehabilitation, therapy and clinical laboratories. 

     Our triple-net segment accounted for 31%, 31% and 31% of total revenues (including discontinued operations) for the years ended December 31, 2015, 2014 and 2013, respectively.  We lease 187 facilities to Genesis Healthcare, LLC, an operator of long-term/post-acute care facilities, pursuant to a long-term, triple-net master lease.  In addition to rent, the master lease requires Genesis to pay all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases.  All obligations under the master lease have been guaranteed by FC-GEN Operations Investment, LLC, a subsidiary of Genesis Healthcare, LLC.  For the year ended December 31, 2015, our lease with Genesis accounted for approximately 31% of our triple-net segment revenues and 10% of our total revenues.

Seniors Housing Operating

Our seniors housing operating properties include several of the facility types described in “Item 1 – Business – Property Types – Triple-Net”, including independent living facilities and independent supportive living facilities, assisted living facilities, care homes and Alzheimer’s/dementia care facilities. 

 Properties are primarily held in consolidated joint venture entities with operating partners. We utilize the structure proposed in the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008).  See Note 18 to our consolidated financial statements for more information.

     Our seniors housing operating segment accounted for 56%, 57% and 59% of total revenues (including discontinued operations) for the years ended December 31, 2015, 2014 and 2013, respectively.  We have relationships with 14 operators to own and operate 388 facilities (plus 54 unconsolidated facilities).  In each instance, our partner provides management services to the properties pursuant to an incentive-based management contract.  We rely on our partners to effectively and efficiently manage these properties.  For the year ended December 31, 2015, our relationship with Sunrise Senior Living accounted for approximately 44% of our seniors housing operating segment revenues and 25% of our total revenues.

Outpatient Medical

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Our outpatient medical properties include outpatient medical buildings and, prior to June 30, 2015, life science facilities.  We typically lease our outpatient medical buildings to multiple tenants and provide varying levels of property management.  Our life science investment represented an investment in an unconsolidated joint venture entity.  Our outpatient medical segment accounted for 13%, 12% and 13% of total revenues (including discontinued operations) for the years ended December 31, 2015, 2014 and 2013, respectively.  No single tenant exceeds 20% of segment revenues.

Outpatient Medical Buildings.  The outpatient medical building portfolio consists of health care related buildings that generally include physician offices, ambulatory surgery centers, diagnostic facilities, outpatient services and/or labs. Our portfolio has a strong affiliation with health systems. Approximately 95% of our outpatient medical building portfolio is affiliated with health systems (with buildings on hospital campuses or serving as satellite locations for the health system and its physicians).

Life Science Facilities.  The life science portfolio consisted of laboratory and office facilities specifically designed and constructed for use by biotechnology and pharmaceutical companies.  These facilities were located adjacent to The Massachusetts Institute of Technology, which is a well-established market known for pharmaceutical and biotechnology research. They are similar to commercial office buildings with advanced HVAC (heating, ventilation and air conditioning), electrical and mechanical systems. On June 30, 2015, we disposed of our life science investments.

Investments

Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders.  We invest in seniors housing and health care real estate primarily through acquisitions, developments and joint venture partnerships. For additional information regarding acquisition and development activity, please see Note 3 to our consolidated financial statements.  We diversify our investment portfolio by property type, relationship and geographic location. In determining whether to invest in a property, we focus on the following: (1) the experience of the obligor’s/partner’s management team; (2) the historical and projected financial and operational performance of the property; (3) the credit of the obligor/partner; (4) the security for any lease or loan; (5) the real estate attributes of the building and its location; (6) the capital committed to the property by the obligor/partner; and (7) the operating fundamentals of the applicable industry. We conduct market research and analysis for all potential investments. In addition, we review the value of all properties, the interest rates and covenant requirements of any facility-level debt to be assumed at the time of the acquisition and the anticipated sources of repayment of any existing debt that is not to be assumed at the time of the acquisition.

We monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends.

We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility.  When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.

Investment Types

Real Property.  Our properties are primarily comprised of land, buildings, improvements and related rights.  Our triple-net properties are generally leased to operators under long-term operating leases.  The leases generally have a fixed contractual term of 12 to 15 years and contain one or more five to 15-year renewal options. Certain of our leases also contain purchase options, a portion of which could result in the disposition of properties for less than full market value.  Most of our rents are received under triple-net leases requiring the operator to pay rent and all additional charges incurred in the operation of the leased property. The tenants are required to repair, rebuild and maintain the leased properties. Substantially all of these operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.

At December 31, 2015, approximately 92% of our triple-net properties were subject to master leases. A master lease is a lease of multiple properties to one tenant entity under a single lease agreement. From time to time, we may acquire additional properties that are then leased to the tenant under the master lease. The tenant is required to make one monthly payment that represents rent on all the properties that are subject to the master lease. Typically, the master lease tenant can exercise its right to purchase the properties or to renew the master lease only with respect to all leased properties at the same time. This bundling feature benefits us because the tenant

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cannot limit the purchase or renewal to the better performing properties and terminate the leasing arrangement with respect to the poorer performing properties. This spreads our risk among the entire group of properties within the master lease. The bundling feature should provide a similar advantage to us if the master lease tenant is in bankruptcy. Subject to certain restrictions, a debtor in bankruptcy has the right to assume or reject each of its leases. It is our intent that a tenant in bankruptcy would be required to assume or reject the master lease as a whole, rather than deciding on a property by property basis.

Our outpatient medical portfolio is primarily self-managed and consists principally of multi-tenant properties leased to health care providers. Our leases typically include increasers and some form of operating expense reimbursement by the tenant. As of December 31, 2015, 82% of our portfolio included leases with full pass through, 15% with a partial expense reimbursement (modified gross) and 3% with no expense reimbursement (gross). Our outpatient medical leases are non-cancellable operating leases that have a weighted-average remaining term of seven years at December 31, 2015 and are often credit enhanced by security deposits, guaranties and/or letters of credit. 

Construction.  We occasionally provide for the construction of properties for tenants as part of long-term operating leases. We capitalize certain interest costs associated with funds used for the construction of properties owned by us. The amount capitalized is based upon the amount advanced during the construction period using the rate of interest that approximates our company-wide cost of financing. Our interest expense is reduced by the amount capitalized. We also typically charge a transaction fee at the commencement of construction which we defer and amortize to income over the term of the resulting lease. The construction period commences upon funding and terminates upon the earlier of the completion of the applicable property or the end of a specified period. During the construction period, we advance funds to the tenants in accordance with agreed upon terms and conditions which require, among other things, periodic site visits by a Company representative. During the construction period, we generally require an additional credit enhancement in the form of payment and performance bonds and/or completion guaranties. At December 31, 2015, we had outstanding construction investments of $258,968,000 and were committed to provide additional funds of approximately $525,588,000 to complete construction for investment properties.

Real Estate Loans.  Our real estate loans are typically structured to provide us with interest income, principal amortization and transaction fees and are generally secured by first/second mortgage liens, leasehold mortgages, corporate guaranties and/or personal guaranties. At December 31, 2015, we had outstanding real estate loans of $819,492,000.  The interest yield averaged approximately 8.1% per annum on our outstanding real estate loan balances. Our yield on real estate loans depends upon a number of factors, including the stated interest rate, average principal amount outstanding during the term of the loan and any interest rate adjustments. The real estate loans outstanding at December 31, 2015 are generally subject to one to 15-year terms with principal amortization schedules and/or balloon payments of the outstanding principal balances at the end of the term. Typically, real estate loans are cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

Investments in Unconsolidated Entities. Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting.  Our investments in unconsolidated entities generally represent interests ranging from 10% to 50% in real estate assets.  Under the equity method of accounting, our share of the investee’s earnings or losses is included in our consolidated results of operations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity.  The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.  See Note 7 to our consolidated financial statements for more information.

Principles of Consolidation

The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation.

At inception of joint venture transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary.  Accounting Standards Codification Topic 810, Consolidations, requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance.

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For investments in joint ventures, we evaluate the type of rights held by the limited partner(s), which may preclude consolidation in circumstances in which the sole general partner would otherwise consolidate the limited partnership. The assessment of limited partners’ rights and their impact on the presumption of control over a limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership in the limited partnership, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.

Borrowing Policies

We utilize a combination of debt and equity to fund investments. Our debt and equity levels are determined by management to maintain a conservative credit profile. Generally, we intend to issue unsecured, fixed-rate public debt with long-term maturities to approximate the maturities on our triple-net leases and loans. For short-term purposes, we may borrow on our primary unsecured credit facility. We replace these borrowings with long-term capital such as senior unsecured notes, common stock or preferred stock. When terms are deemed favorable, we may invest in properties subject to existing mortgage indebtedness. In addition, we may obtain secured financing for unleveraged properties in which we have invested or may refinance properties acquired on a leveraged basis. In certain agreements with our lenders, we are subject to restrictions with respect to secured and unsecured indebtedness.

Competition

We compete with other real estate investment trusts, real estate partnerships, private equity and hedge fund investors, banks, insurance companies, finance/investment companies, government-sponsored agencies, taxable and tax-exempt bond funds, health care operators, developers and other investors in the acquisition, development, leasing and financing of health care and seniors housing properties. We compete for investments based on a number of factors including relationships, certainty of execution, investment structures and underwriting criteria. Our ability to successfully compete is impacted by economic and demographic trends, availability of acceptable investment opportunities, our ability to negotiate beneficial investment terms, availability and cost of capital, construction and renovation costs and applicable laws and regulations.

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

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

Employees  As of January 31, 2016, we had 476 employees.

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

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

Health Care Industry

     The demand for health care services, and consequently health care properties, is projected to reach unprecedented levels in the near future. The Centers for Medicare and Medicaid Services (“CMS”) projects that national health expenditures will rise to approximately $3.4 trillion in 2016 or 18.1% of gross domestic product (“GDP”). The average annual growth in national health expenditures for 2014 through 2024 is expected to be 5.8%.

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

     The total U.S. population for 2014 through 2024 is projected to increase by 9.1%. The elderly population aged 65 and over is projected to increase by 40% through 2024. The elderly are an important component of health care utilization, especially independent living services, assisted living services, long-term/post-acute care services, inpatient and outpatient hospital services and physician ambulatory care. Most health care services are provided within a health care facility such as a hospital, a physician’s office or a seniors housing community. Therefore, we believe there will be continued demand for companies, such as ours, with expertise in health care real estate.

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

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

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

·The on-going merger and acquisition activity.

Certain Government Regulations

United States

Health Law Matters — Generally

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

Licensing and Certification

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

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

     With respect to licensure, generally our long-term/post-acute care facilities and acute care facilities are required to be licensed and certified for participation in Medicare, Medicaid, and other federal and state health care programs.  This generally requires license renewals and compliance surveys on an annual or bi-annual basis. The failure of our operators to maintain or renew any required license or regulatory approval as well as the failure of our operators to correct serious deficiencies identified in a compliance survey could require those operators to discontinue operations at a property.  In addition, if a property is found to be out of compliance with Medicare, Medicaid, or other federal or state health care program conditions of participation, the property operator may be excluded from participating in those government health care programs.  Any such occurrence may impair an operator’s ability to meet their financial obligations to us.  If we have to replace an excluded-property operator, our ability to replace the operator may be affected by

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federal and state laws, regulations, and applicable guidance governing changes in provider control. This may result in payment delays, an inability to find a replacement operator, a significant working capital commitment from us to a new operator or other difficulties.

Reimbursement

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

     Seniors Housing Facilities (excluding long-term/post-acute care facilities).  Approximately 54% of our overall revenues for the year ended December 31, 2015 were attributable to U.S. seniors housing facilities.  The majority of the revenues received by the operators of these facilities are from private pay sources. The remaining revenue source is primarily Medicaid under certain waiver programs.  As a part of the Omnibus Budget Reconciliation Act (“OBRA”) of 1981, Congress established a waiver program enabling some states to offer Medicaid reimbursement to assisted living providers as an alternative to institutional long-term care services.  The provisions of OBRA, the subsequent OBRA Acts of 1987 and 1990, and certain provisions of the Patient Protection and Affordable Care Act of 2010 (“PPACA”), permit states to seek a waiver from typical Medicaid requirements or otherwise amend their state plans to develop cost-effective alternatives to long-term care, including Medicaid payments for assisted living and home health.  As of September 30, 2015, 16 of our 44 seniors housing operators received Medicaid reimbursement pursuant to Medicaid waiver programs. For the twelve months ended September 30, 2015, approximately 1.4% of the revenues at our seniors housing facilities were from Medicaid reimbursement.  There can be no guarantee that a state Medicaid program operating pursuant to a waiver will be able to maintain its waiver status.

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

Long-Term/Post-Acute Care Facilities.  Approximately 14% of our overall revenues for the year ended December 31, 2015 were attributable to long-term/post-acute care facilities.  The majority of the revenues received by the operators of these facilities are from the Medicare and Medicaid programs, with the balance representing reimbursement payments from private payors, including private insurers.  Consequently, changes in federal or state reimbursement policies may adversely affect an operator’s ability to cover its expenses, including our rent or debt service.  Long-term/post-acute care facilities are subject to periodic pre- and post-payment reviews, and other audits by federal and state authorities.  A review or audit of a property operator’s claims could result in recoupments, denials, or delay of payments in the future, which could have a material adverse effect on the operator’s ability to meet its financial obligations to us.  Due to the significant judgments and estimates inherent in payor settlement accounting, no assurance can be given as to the adequacy of any reserves maintained by our property operators to cover potential adjustments to reimbursements, or to cover settlements made to payors. Recent attention on billing practices, payments, and quality of care, or ongoing government pressure to reduce spending by government health care programs, could result in lower payments to long-term/post-acute care facilities and, as a result, may impair an operator’s ability to meet its financial obligations to us.

Medicare Reimbursement and Long-Term/Post-Acute Care Facilities.  For the twelve months ended September 30, 2015, approximately 34% of the revenues at our long-term/post-acute care facilities were paid by Medicare. Generally, long-term/post-acute care facilities are reimbursed under the Medicare Skilled Nursing Facility Prospective Payment System (“SNF PPS”), the Inpatient Rehabilitation Facility Prospective Payment System (“IRF PPS”), or the Long Term Care Hospital Prospective Payment System (“LTCH PPS”).  There is a risk under these payment systems that costs will exceed the fixed payments, or that payments may be set below the costs to provide certain items and services, which could result in immediate financial difficulties for operators, and could cause operators to seek bankruptcy protection.

     The CMS, an agency of the Department of Health and Human Services (“HHS”), made positive payment updates for the 2016 fiscal year under the SNF PSS, the IRF PPS and the LTCH PPS. 

·On August 4, 2015, CMS published a final rule regarding fiscal year 2016 (“FY16”) Medicare payment rates for skilled nursing facilities (“SNFs”).  Under the rule, CMS projects that aggregate payments to SNFs will increase by $430 million, or 1.2%, from payments in fiscal year 2015. 

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·On August 6, 2015, CMS published a final rule for the IRF PPS.  Under the final rule, inpatient rehabilitation facilities (“IRFs”) will receive a net increase of 1.8%, accounting for adjustments, such as the multifactor productivity adjustment.  An additional 0.1% increase to aggregate payments due to updating the outlier threshold results in an overall update of 1.8% relative to payments in fiscal year 2015.  CMS estimates aggregate payments to IRFs will increase by $135 million in fiscal year 2016.

·On August 17, 2015, CMS published a final rule regarding FY16 Medicare payment rates for long-term care hospitals (“LTCHs”).  Under the rule, standard LTCH PPS rates will increase 1.7%.  CMS projects overall payments to LTCHs under the rule would decrease by 4.6%, or $250 million, due to the statutory decrease in payment rates for site neutral LTCH PPS cases. Site neutral LTCH PPS cases do not meet the clinical criteria to qualify for the higher standard LTCH PPS payment rates.

Other Laws, Regulations (Proposed and Final), and Initiatives Affecting Medicare Reimbursement for LTCHs, SNFs, and IRFs.  On December 26, 2013, the President signed into law the Pathway for SGR Reform Act (“SGR Reform”). SGR Reform implemented several changes to the Medicare payment rules for LTCHs.  For a discharge in cost reporting periods beginning on or after October 1, 2015, specified cases in LTCHs will receive the “applicable” site-neutral payment rate.  Specifically, payment rates will be blended for discharges in cost reporting periods beginning in fiscal year 2016 and fiscal year 2017, consisting of half of the site neutral payment rate and half of the payment rate that would otherwise apply, and then shift to all site-neutral payments in fiscal year 2018.  Patients with a three-day stay in an intensive care unit prior to LTCH admission or ventilator patients with at least 96 hours are exempted from the lower site-neutral payments if the discharge does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation.  Beginning in fiscal year 2020, LTCHs are to maintain at least 50% of patients that are excluded from the site-neutral payments. SGR Reform also requires the Medicare Payment Advisory Committee (“MedPAC”) to conduct a study and submit a report to Congress by June 30, 2019 that includes recommendations that address these changes to the LTCH payment policies.  Additionally, beginning in fiscal year 2016, calculation of length of stay requirements for LTCHs will exclude any patients for whom payment is made (i) at the site-neutral payment rate and (ii) under any Medicare Advantage plan.  SGR Reform also delayed implementation of a limit of no more than 25% of patients referred from any one hospital (“25% Rule”) for another three years, and the Secretary of HHS must issue a report in two years on the need for any further extension or modifications to the 25% Rule.  Finally, SGR Reform reinstituted a moratorium on new LTCHs or any increase in LTCH beds from January 1, 2015 through September 30, 2017.

     On April 1, 2014, the Protecting Access to Medicare Act of 2014 (“Access to Medicare Act”) was enacted.  The Access to Medicare Act implements value-based purchasing for SNFs.  Beginning in fiscal year 2019, 2% of SNF payments will be withheld and approximately 50% to 70% of the amount withheld will be paid to SNFs through value-based payments.  SNFs began reporting the claims-based 30-Day All-Cause Readmission Measure on October 1, 2015 and will begin reporting a resource use measure by October 1, 2016.  Both measures will be publicly available by October 1, 2017. 

     On October 6, 2014, the President signed into law the Improving Medicare Post-Acute Transformation Act of 2014 (“IMPACT Act”).  The law applies to SNFs, LTCHs, IRFs and home health agencies and requires providers to report standardized patient assessment data, data on quality measures, and data on resource use and other measures.  The law requires public reporting of quality and resource use and other measures.  MedPAC is required to submit a report to Congress by June 30, 2016, evaluating and recommending features of a post-acute payment system that establishes payment rates according to individual characteristics instead of the post-acute setting where the patient is treated.  The report must include a technical prototype for a post-acute prospective payment system and the impact of moving from the current to the new payment system.

     On July 16, 2015, CMS issued a proposed rule that, for the first time in nearly 25 years, would comprehensively update the SNF requirements for participation under Medicare and Medicaid.  Among other things, the proposed rule addresses requirements relating to quality of care and quality of life, facility responsibilities and staffing considerations, resident assessments, and compliance and ethics programs. CMS estimates that this rule would result in an estimated first-year cost of approximately $46,491 per facility and a subsequent-year cost of $40,685 per facility on 15,691 LTCHs.

    On November 24, 2015, CMS published a final rule to bundle the costs for Lower Extremity Joint Replacement procedures in certain geographic areas.  The bundle will begin with the hospital admission and continue for 90 days following hospital discharge.  The following services, among others, will be included: physician services, inpatient hospital services (including readmission), LTCH, inpatient rehabilitation, SNF, and/or home health services, hospital outpatient services, outpatient therapy, clinical lab, and hospice.  Hospitals subject to the bundling requirements with spending below an established target price that meet the threshold on certain quality measures could earn a reconciliation payment from Medicare.  Hospitals with spending that exceeds the target will need to pay the difference to Medicare.

    On December 1, 2015, CMS published a notice seeking comments on the methodology used to cut Medicare Part A hospital reimbursement by 0.2% as part of the original “Two-Midnight” payment policy.  The notice was issued in response to a federal district court’s finding in September that CMS did not adequately explain its reasoning for the 0.2% pay cut in 2013. In accordance with the

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federal district court’s order in Shands Jacksonville Medical Center, Inc., et al. v. Burwell, No. 14-263 (D.D.C.), the notice discusses the basis for the 0.2% reduction and its underlying assumptions and invites comments on the same to facilitate the CMS’s further consideration of the fiscal year 2014 reduction.

     Finally, in January 2016, MedPAC finalized its recommendations, advising Congress that Medicare payments should remain the same in fiscal year 2017 for LTCHs and IRFs, among other institutions.  The final recommendations also urge Congress to eliminate the market basket updates for SNFs for fiscal year 2017 and 2018 and direct the Secretary of HHS to revise the SNF prospective payment system.  To the extent such recommendations are implemented, they could impact our operators and tenants.

    HHS Office of Inspector General (“OIG”) Recommendations Addressing SNF Billing.  In the OIG’s March 2015 Compendium of Priority Recommendations, a report that highlights the OIG’s previous recommendations for which corrective action has not been completed, the OIG cited its prior November 2012 report addressing questionable billing practices by SNFs.  The OIG recommended, among other things, changing the current method for determining how much therapy is needed to ensure appropriate payments, monitoring compliance with new therapy assessments, and improving accuracy of data submitted by SNFs.  Similarly, in June 2015, the OIG issued a report analyzing CMS’ assessments related to changes in the amount of therapy that a beneficiary receives during stays.  The OIG concluded that CMS’ new policies create challenges for oversight and that SNFs’ use of these assessments cost Medicare $143 million over two years.  The OIG recommended, among other things, that CMS (1) reduce the financial incentive for SNFs to use assessments differently when decreasing and increasing therapy and (2) accelerate its efforts to implement a new method for paying for therapy.  OIG also issued a report in September 2015, calling for reevaluation of the Medicare payment system for skilled nursing facilities. In particular, OIG found that Medicare payments for therapy greatly exceeded SNFs’ costs for therapy, and that, under the current payment system, SNFs increasingly billed for the highest level of therapy even though key beneficiary characteristics remained largely the same.  OIG determined that its findings demonstrated the need for CMS to reevaluate the Medicare SNF payment system, concluding that payment reform could save Medicare billions of dollars and encourage SNFs to provide services that are better aligned with beneficiaries’ care needs.  Most recently, OIG issued (1) its findings regarding the fiscal year 2015 Top Management and Performance Challenges Facing HHS and (2) the FY 2016 OIG Work Plan. Both cited SNF billing as an area that creates incentives for providers to bill more expensive care instead of the appropriate levels of care, requiring ongoing government monitoring and auditing for compliance.   If followed, these reports and recommendations may impact our operators and tenants.

     Medicare Reimbursement for Physicians, Hospital Outpatient Departments, and Ambulatory Surgical Centers.  Historically, CMS annually adjusted the Medicare Physician Fee Schedule payment rates based on an update formula that included application of the Sustainable Growth Rate (“SGR”).  As noted above, on April 1, 2014, President Obama signed into law the Access to Medicare Act, which, among other things, provided for a 0% update to the 2015 Medicare Physician Fee Schedule through March 31, 2015.  On November 13, 2014, CMS published the calendar year 2015 Physician Fee Schedule final rule, which, consistent with the Access to Medicare Act, called for a 0% update from January 1, 2015 through March 31, 2015 and a negative 21.2% update under the statutory SGR formula for April 1, 2015 through December 31, 2015.  However, on April 16, 2015, President Obama signed and enacted into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, which, among other things:

·Repeals the SGR;

·Institutes a 0% update to the single conversion factor under the Medicare Physician Fee Schedule from January 1 through June 30, 2015, a 0.5% update for July 2015 through the end of 2019, and a 0% update for 2020 through 2025.  For 2026 and subsequent years, the update will be either 0.75% or 0.25%, depending on which Alternate Payment Model the physician participates; 

·Delays the Geographic Practice Cost Indices payment adjustment until January 1, 2018;

·Extends the therapy cap exceptions process through December 31, 2017; and

·Imposes a market basket update of 1% for skilled nursing providers for FY 2018.

     Also, on April 6, 2015, CMS announced final 2016 payment rates for Medicare Advantage, with an expected average payment impact of 3.25%.  Changes in Medicare Advantage plan payments may indirectly affect our operators and tenants that contract with Medicare Advantage plans.

     Additionally, the Bipartisan Budget Act of 2015, enacted on November 2, 2015, contains a provision that alters how much Medicare pays for outpatient services furnished by hospitals.  Pursuant to Section 603 of the Act, effective January 1, 2017, an off-campus hospital outpatient department (“HOPD”) will no longer qualify for Medicare payment under the Hospital Outpatient Prospective Payment System, unless the off-campus HOPD was established prior to the date of enactment (November 2, 2015), and Medicare payment  will, instead, be made under the applicable non-hospital payment system (i.e., the Physician Fee Schedule or Ambulatory Surgical Center (“ASC”) system), which typically provides for lower payment rates. This site-neutrality provision is intended to address policymakers’ concerns that Medicare’s current payment policies incentivize hospitals to acquire and label physician practices and ASCs  as HOPDs due to higher rates available for services furnished in hospital outpatient settings.  It is unclear whether this provision will significantly impact Welltower’s operators and tenants.

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     CMS also issued additional rules which could impact our tenants and operators. 

·On November 13, 2015, CMS published a final rule regarding 2016 Medicare payment rates for HOPDs and ASCs.  Under the rule, CMS reduced payments to HOPDs by 0.3% and increased payments to ASCs by 0.3%.  The final rule also included updates to the “Two-Midnight” rule regarding when inpatient admissions are appropriate for payment under Medicare Part A.  Under the final rule, an inpatient admission lasting less than two midnights would be payable under Medicare Part A on a case-by-case basis based on the judgment of the admitting physician, supported by documentation in the medical record.

·On November 16, 2015, CMS published a final rule regarding 2016 Medicare payment rates under the Physician Fee Schedule.  Among other final policies, CMS finalized its plans to initiate implementation of the new payment system for physicians and other practitioners, the Merit-Based Incentive Payment System (“MIPS”), required by the legislation that repealed the SGR.  Under the legislation, the MIPS will be fully implemented in calendar year 2019.

Medicaid Reimbursement and Long-Term/Post-Acute Care Facilities.  For the twelve months ended September 30, 2015, approximately 41% of the revenues of long-term/post-acute care facilities were paid by Medicaid. The federal and state governments share responsibility for financing Medicaid.  The federal matching rate, known as the Federal Medical Assistance Percentage, varies by state based on relative per capita income, but is at least 50% in all states.  According to the National Association of State Budget Officers, Medicaid was the largest component of total state spending, representing approximately 27.4% of total state expenditures in state fiscal year 2015.  The percentage of Medicaid dollars for long-term/post-acute care facilities varies from state to state, due in part to different ratios of elderly population and eligibility requirements.  Within certain federal guidelines, states have a fairly wide range of discretion to determine eligibility and reimbursement methodology.  Many states reimburse SNFs, for example, using fixed daily rates, which are applied prospectively based on patient acuity and the historical costs incurred in providing patient care.  Reasonable costs typically include allowances for staffing, administrative and general expenses, property, and equipment (e.g., real estate taxes, depreciation and fair rental).

     In most states, Medicaid does not fully reimburse the cost of providing services.  Certain states are attempting to slow the rate of Medicaid growth by freezing rates or restricting eligibility and benefits.  Average Medicaid rates for our long-term/post-acute care facilities will likely vary throughout the year as states continue to make interim changes to their budgets and Medicaid funding.  In addition, Medicaid reimbursement rates may decline if revenues in a particular state are not sufficient to fund budgeted expenditures. 

     Health Reform Laws.  On March 23, 2010, the President signed into law the PPACA and the Health Care and Education Reconciliation Act of 2010, which amends the PPACA (collectively, the “Health Reform Laws”).  The Health Reform Laws contain various provisions that may directly impact us or the operators and tenants of our properties.  Some provisions of the Health Reform Laws may have a positive impact on our operators’ or tenants’ revenues, by, for example, increasing coverage of uninsured individuals, while others may have a negative impact on the reimbursement of our operators or tenants by, for example, altering the market basket adjustments for certain types of health care facilities.  The Health Reform Laws also enhance certain fraud and abuse penalty provisions that could apply to our operators and tenants, in the event of one or more violations of the federal health care regulatory laws. In addition, there are provisions that impact the health coverage that we and our operators and tenants provide to our respective employees.  The Health Reform Laws also provide additional Medicaid funding to allow states to carry out the expansion of Medicaid coverage to certain financially−eligible individuals beginning in 2014, and have also permitted states to expand their Medicaid coverage to these individuals since April 1, 2010, if certain conditions are met.  On June 28, 2012, the United States Supreme Court upheld the individual mandate of the Health Reform Laws but partially invalidated the expansion of Medicaid.  The ruling on Medicaid expansion will allow states not to participate in the expansion – and to forego funding for the Medicaid expansion – without losing their existing Medicaid funding.  Given that the federal government substantially funds the Medicaid expansion, it is unclear how many states will ultimately pursue this option.  The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but could also further strain state budgets.  While the federal government will pay for approximately 100% of those additional costs from 2014 to 2016, states will be expected to pay for part of those additional costs beginning in 2017. 

     Challenges to the Health Reform Laws.  Since the enactment of the Health Care Laws, there have been multiple attempts through legislative action and legal challenge to repeal or amend the Health Reform Laws, including the case that was before the U.S. Supreme Court, King v. Burwell.  Although the Supreme Court in Burwell upheld the use of subsidies to individuals in federally-facilitated health care exchanges on June 25, 2015, which ultimately did not disrupt significantly the implementation of the Health Care Reform Laws, we cannot predict whether other current or future efforts to repeal or amend the Health Reform Laws will be successful, nor can we predict the impact that such a repeal or amendment would have on our operators or tenants and their ability to meet their obligations to us.

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

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Other Related Laws, Initiatives, and Considerations

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

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

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

     Other legislative developments, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), have greatly expanded the definition of health care fraud and related offenses and broadened its scope to include private health care plans in addition to government payors.  Congress also has greatly increased funding for the Department of Justice, Federal Bureau of Investigation and the Office of the Inspector General of the Department of Health and Human Services to audit, investigate and prosecute suspected health care fraud.  Moreover, a significant portion of the billions in health care fraud recoveries over the past several years has also been returned to government agencies to further fund their fraud investigation and prosecution efforts.

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

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entities have entered into settlement agreements with HHS for allegedly failing to adopt policies and procedures sufficient to implement the breach notification provisions in the HITECH Act.  Additionally, the final rule adopts certain changes to the HIPAA enforcement regulations to incorporate the increased and tiered civil monetary penalty structure provided by HITECH, and makes business associates of covered entities directly liable under HIPAA for compliance with certain of the HIPAA privacy standards and HIPAA security standards.  HIPAA violations are also potentially subject to criminal penalties.

     There has been increased federal and state HIPAA privacy and security enforcement efforts and we expect this trend to continue. Under HITECH, state attorneys general have the right to prosecute HIPAA violations committed against residents of their states. Several such actions have already been brought against both covered entities and a business associate, and continued enforcement actions are likely to occur in the future.  In addition, HITECH mandates that the Secretary of HHS conduct periodic compliance audits of HIPAA covered entities and business associates. It also tasks HHS with establishing a methodology whereby individuals who are harmed by HIPAA violations may receive a percentage of the civil monetary penalty fine or monetary settlement paid by the violator.

     In addition to HIPAA, numerous other state and federal laws govern the collection, dissemination, use, access to and confidentiality of individually identifiable health information. In addition, some states are considering new laws and regulations that further protect the confidentiality, privacy or security of medical records or other types of medical or personal information.  These laws may be similar to or even more stringent than the federal provisions and are not preempted by HIPAA. Not only may some of these state laws impose fines and penalties upon violators, but some afford private rights of action to individuals who believe their personal information has been misused.

     Most recently with respect to HIPAA, in September, 2015, OIG issued two reports calling for better privacy oversight of covered entities.  The first report, titled “OCR Should Strengthen its Oversight of Covered Entities’ Compliance with the HIPAA Privacy Standards,” found that OCR’s oversight is primarily reactive, as OCR has not fully implemented the required audit program to proactively assess possible noncompliance from covered entities. OIG recommended, among other things, that OCR fully implement a permanent audit program and develop a policy requiring OCR staff to check whether covered entities had previously been investigated for noncompliance.  The second report, titled “OCR Should Strengthen its Follow-up of Breaches of Patient Information Reported by Covered Entities,” found that (1) OCR did not record corrective action information for 23% of closed “large-breach” cases in which it made determinations of noncompliance, and (2) OCR did not record “small-breach” information in its case-tracking system, which limits its ability to track and identify covered entities with multiple small breaches.  OIG recommended, among other things, that OCR enter small-breach information into its case-tracking system and maintain complete documentation of corrective actions taken. OCR agreed with OIG’s recommendations in both reports.  If followed, these reports and recommendations may impact our operators and tenants.

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

     In addition, recent government proposals have resulted in an increased emphasis by the government on the quality of care provided by providers.  For example, on February 27, 2015, CMS announced the establishment of a Health Care Payment Learning and Action Network as part of its plan to shift the Medicare program, and the healthcare system at large, toward paying providers based on quality, rather than the quantity of care they provide to patients.  Through the Learning and Action Network, CMS will work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs.  To the extent this and similar measures impose additional obligations on our operators or tenants, or decrease the reimbursements that they receive, our revenues and operations may be indirectly adversely affected.

     In October 2015, the U.S. Government Accountability Office (“GAO”) released a report recommending that CMS continue to improve data and oversight of nursing home quality measures.  The GAO found that although CMS collects several types of data that give some insight into the quality of nursing homes, the data could provide a clearer picture of nursing home quality if some underlying problems with the data (i.e., the use of self-reported data and non-standardized survey methodologies) are corrected.  The GAO recommends, among other things, that CMS implement a clear plan for ongoing auditing of self-reported data and establish a process for monitoring oversight modifications to better assess their effects.  According to the GAO, timely completion of these actions is particularly important because Medicare payments to nursing homes will be dependent on quality data, through the implementation of the value based purchasing program, starting in fiscal year 2019.  HHS agreed with the GAO’s recommendations, and to the extent such recommendations are implemented, they could impact Welltower’s operators and tenants.

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     According to the U.S. Centers for Disease Control and Prevention, it is not possible to predict the severity of the upcoming flu season or the efficacy of available flu vaccinations.  The U.S. experiences epidemics of seasonal flu each year, which result in increased influenza-related hospitalizations and deaths.  According to HHS, each flu season, nearly 111 million workdays are lost due to the flu, which equals approximately $7 billion per year in sick days and lost productivity.  As such, depending on the severity and duration of the upcoming flu season, the flu could impact Welltower’s operators and tenants.

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

United Kingdom

Registration

     In England, care home services are principally regulated by the Health and Social Care Act 2008 (the “Act”) and associated Regulations. The Act requires all persons carrying out “Regulated Activities” in England, and the managers of such persons, to be registered. Regulated Activities are defined in the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014, as amended (the “2014 Regulations”), and include (among other activities):

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

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

     From April 1, 2015, the 2014 Regulations fully revoked the Health and Social Care Act 2008 (Regulated Activities) Regulations 2010 (the “2010 Regulations”) and while the 2014 Regulations introduce certain modifications with regard to service standards, the registration obligations under the Act remain.

Service Standards and Notification Obligations

     The 2014 Regulations aim to streamline the legal obligations in the 2010 Regulations, and replace them with a set of more broadly-phrased, legally binding “Fundamental Standards”. The 2014 Regulations list the standards that must be met when providing care services. The service providers’ legal obligations include:

·Care and treatment must be appropriate and reflect service user needs and preferences;

·Service users must be treated with dignity and respect;

·Care and treatment must only be provided with consent;

·Care and treatment must be provided in a safe way for service users;

·Service users must be protected from abuse and improper treatment;

·Service users nutritional and hydration needs must be met;

·All premises and equipment must be clean, secure, suitable and used properly;

·Complaints must be investigated and appropriate action taken;

·Systems and processes must be established to ensure compliance with fundamental standards;

·Sufficient numbers of suitably qualified, competent, skilled and experienced staff must be deployed;

·Persons employed must be of good character, having the necessary qualifications, skills and experience, and be able to perform the work for which they are employed; and

·Health service bodies must be open and transparent with service users about their care and treatment. 

     Failure to comply with certain provisions of the 2014 Regulations is an offense, with a person guilty of the offense liable on summary conviction to a fine.  Monetary penalty notices may also be issued.

     The 2014 Regulations also include:

·Requirements around fit and proper persons being employed for the purposes of carrying out a regulated activity. Such persons must be of good character, have the qualifications, competence, skills and experience necessary and be able by reason of their health to perform their tasks. Recruitment procedures must also be established and effectively operated with certain specified information being available in relation to each person employed and registered where required; 

·A new “duty of candour” to notify and apologize to affected persons, in the event of certain incidents having actually or potentially led to the death of the service user, where the death relates directly to the incident rather than to the natural course of the service user's illness or underlying condition, or severe harm, moderate harm or prolonged psychological harm to the service user;

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·A requirement for a service provider to display a performance assessment received as a rating of its performance by the Care Quality Commission (the “CQC”); and

·A requirement that registered persons have regard to guidance issued by the CQC and any code of practice from the Secretary of State in relation to prevention or control of health care associated infections.

     Under the Care Quality Commission (Registration) Regulations 2009 certain matters must be notified to the CQC, the government regulatory body overseeing the provision of nursing and other care services in England.  Failure to comply with notification obligations is an offense and a person guilty of an offense is liable on summary conviction to a fine of up to £2,500. 

Regulatory Oversight and Inspections

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

The Care Act 2014 sets out certain provisions concerning (among others):

·The duty of a local authority to meet the needs of an adult for care and support and a carer’s needs where the registered care provider is unable to carry on a regulated activity because of business failure;

·The duty of the CQC to assess the financial sustainability of providers subject to its regulatory regime with a view to identifying any threats that such providers may face to their financial sustainability. Where the CQC identifies a significant risk to financial sustainability it can require the provider to develop a sustainability plan setting out the provider’s plan to mitigate or eliminate risk or require the provider to organize an independent review of the business with the costs being recovered from the provider;

·The CQC informing local authorities where a registered care provider is likely to become unable to carry on a regulated activity; and

·A new offense where certain registered care providers supply, publish or make available information that is false or misleading in a material respect which can also apply to a director, manager or person purporting to act as such of a company.  

Privacy

     In the European Union (“EU”), data protection is governed by the EU Data Protection Directive 95/46/EC (the “Data Protection Directive”). The Data Protection Directive has been implemented in the UK by the Data Protection Act 1998 (the “Act”) which entered into force on March 2000 and is enforced by the Information Commissioner’s Office (“ICO”).

     The Act applies to a data controller that processes personal data in the context of an establishment in the UK, or where not established in the UK, in any other State of the European Economic Area (“EEA”), processes personal data through equipment located in the UK other than for the purposes of transit through the UK. Under the Act, a data controller is the person who (either alone or jointly or in common with other persons) determines the purposes for which and the manner in which any personal data are, or are to be, processed. Personal data is widely defined as data which relates to a living individual who can be identified from those data, or from those data and other information which is in the possession of, or is likely to come into the possession of, the data controller. Sensitive personal data is personal data consisting of information as to the racial or ethnic origin of the data subject; his/her political opinions, religious beliefs or other beliefs of a similar nature; whether he/she is a member of a trade union; his/her physical or mental health or condition; his/her sexual life; and the commission or alleged commission by him/her of an offense, any proceedings for any offense committed or alleged to have been committed by him/her, the disposal of such proceedings, or the sentence of any court in such proceedings.

     The Act imposes a number of obligations on the data controller contained in eight Data Protection Principles: (i) personal data must be processed fairly and lawfully, (ii) personal data must be processed for specified and lawful purposes, (iii) personal data must be adequate, relevant and not excessive, (iv) personal data must be accurate and up to date, (v) personal data must not be kept for longer than necessary, (vi) personal data must be processed in accordance with the rights of data subjects, (vii) appropriate technical and organizational measures shall be taken against unauthorized or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data; and (viii) there is a prohibition on transfers of personal data to countries outside the EEA that are not deemed by the European Commission to provide an adequate level of protection, which includes the U.S., unless certain exemptions under the Act apply.

     The ICO has a number of enforcement powers available which includes, in certain limited cases, criminal prosecution and non-criminal enforcement and audits.  In case of a breach of the Act, the ICO may: (i) provide practical advice to organizations on how they should handle data protection matters; (ii) issue undertakings committing an organization to a particular course of action in order to improve its compliance; (iii) serve enforcement notices where there has been a breach, requiring organizations to take (or refrain from taking) specified steps in order to ensure they comply with the law; (iv) conduct consensual assessments (audits) to determine if

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organizations are complying; (v) serve assessment notices to conduct compulsory audits to assess whether organizations’ processing of personal data follows good data protection practices; (vi) issue monetary penalty notices requiring organizations to pay up to £500,000 for serious breaches of the Act occurring on or after April 6, 2010 or serious breaches of the Privacy and Electronic Communications Regulations occurring after May 26, 2011; and (vii) prosecute those who commit criminal offenses under the Act.  Under the Act, individuals also have the right to claim compensation from an organization in respect of damage caused by a breach of any of the requirements of the Act.

     There is a proposal for an EU Data Protection Regulation which would replace the Data Protection Directive and impose a significant number of new obligations including, among others, a requirement to appoint data protection officers, having detailed documentation on the processing of personal data, carrying out privacy impact assessments in certain circumstances, providing standardized data protection notices, reporting security breaches without undue delay, and providing certain rights to individuals such as a right of erasure of personal data. The EU Data Protection Regulation is to have significant enforcement powers with fines proposed by the European Commission of up to 2% of annual worldwide turnover or €20 million, whichever is greater. The EU Data Protection Regulation may be adopted sometime in 2016 with EU Member States possibly having two years to implement the Regulation. 

Canada

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

     Licensing and Regulation

     Alberta

     In Alberta, there are three relevant designations for seniors’ living arrangements, ordered below from the most independent to the highest level of care.

     Retirement Homes (also referred to as independent living) are designed for older adults who are able to live on their own. These communities may offer amenities such as fitness centers, gardens, paths, libraries, and beauty salons. Residents may access publicly-funded external care services at the home from funded external suppliers.

     Alberta retirement residences may be rented, privately owned, or life-leased. They may be operated for profit or non-profit. Retirement residences typically do not offer support services but residents may arrange support services separate from their accommodations.

     Retirement homes do not generally receive government funding; residents pay for tenancy and services received at retirement homes.  Rental subsidies may be available to qualified seniors.

     Alberta Independent Living residences are legislated under the Residential Tenancies Act, SA 2004, c R-17.1 and the Alberta Housing Act, RSA 2000, c A-25.

     Supportive Living (also referred to as assisted living) provides accommodation in a home-like setting, where residents can remain as independent as possible while still having access to necessary care, assistance, and services. A provider of designated Supportive Living services provides at least one meal a day or housekeeping services. Supportive living includes many different types of facilities, including seniors lodges, group homes, and mental health and designated supportive living accommodations. These facilities can be operated by private for-profit, private not-for-profit, or public operators.

     Supportive Living services are licensed under the Supportive Living Accommodation Licensing Act, SA 2009, c S-23.5, and the Supportive Living Accommodation Licensing Regulation, Alta Reg 40/2010. They are governed by the Ministry of Health.

     Operators that receive public funds, either directly or indirectly, for health and personal care services must also comply with the Ministry of Health Continuing Care Health Service Standards (March 2007, and revised). They are also subject to the Protection for Persons in Care Act, SA 2009, c P-29.1, under which the province investigates suspected abuse of adults receiving government-funded care services.

     Licenses may be granted for periods of six months to three years, depending on how long the facility has been licensed, and depending on past reports. The Ministry, through a designated director, may conduct inspections of facilities and review records. The

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Director may order a delinquent facility to take specific steps or to stop certain practices or may temporarily stop operations; alternatively, the facility’s license may be suspended.

     There are four levels of supportive living, ordered from basic to more advance care: (1) Residential Living (residents can manage most daily tasks and direct own care and assistance can be scheduled); (2) Lodge Living (residents can manage some daily tasks and direct own care and assistance can be scheduled, although some non-scheduled assistance may be required); (3) Assisted Living (residents require assistance with many daily tasks, with increased scheduled and some non-scheduled assistance required); (4) Enhanced Level (residents require assistance with most or all daily tasks and frequent unscheduled assistance). In addition, there are two specialized designations of Supportive Care: (1) Alberta Enhanced Assisted Living (also referred to as Enhanced Lodges or Alberta Designated Supportive Living Level 4 (SL4) (provides 24-hour scheduled and unscheduled professional, personal care and support services provided by Licensed Practical Nurses and Health Care Aides); and (2) Enhanced Assisted Living Dementia Care Sites (also referred to as Designated Supportive Living Level 4 Dementia (SL4-D)) (provides assisted living for seniors living with cognitive impairments (such as Alzheimer’s disease or other types of dementia) who require safe and secure living accommodation in a therapeutic environment).

     Residents pay a fee to cover the costs of providing accommodations and services like meals, housekeeping and building maintenance. The accommodation fee varies by accommodation type and the services or amenities that are available to the resident. Alberta Health regulates the maximum accommodation fee in publicly-funded designated supportive living. In other types of supportive living settings, the operator sets the cost of accommodation. Health services are publicly-funded and provided through Alberta Health Services. Private sector operators of Supportive Living facilities are eligible to apply for funding under the Affordable Supportive Living Initiative (“ASLI”), an Alberta government capital grant program that provides funding to develop long-term care and affordable supportive living spaces in the province.

     Nursing Homes (also referred to as long-term care) are for residents who have complex, unpredictable medical needs and who require 24-hour on-site registered nurse assessment or treatment.

     Nursing homes are subject to the Nursing Homes Act, RSA 2000, c N-7, and the Nursing Home General Regulation, Alta Reg 232/1985, and Long-term Care Accommodation Standards. They are governed by the Ministry of Health.

     Nursing home operators are not licensed, but enter into agreements with the Ministry for the operation of nursing homes. These facilities can be operated by private for-profit, private not-for-profit, or public operators.

     All operators must comply with the Ministry of Health Long-term Care Accommodation Standards (March 2007, and revised). Operators that receive public funds, either directly or indirectly, for health and personal care services must also comply with the Continuing Care Health Service Standards and are subject to the Protection for Persons in Care Act.

     The Ministry may conduct inspections of facilities and review records. Deficient facilities may be ordered to submit a correction plan.

     Residents pay an accommodation fee to cover the costs of providing accommodations and services like meals, housekeeping and building maintenance. Alberta Health regulates the maximum accommodation fee in publicly-funded long-term care facilities. In other types of supportive living settings, the accommodation fee is set by the operator. Health services in long-term care are publicly-funded and provided through Alberta Health Services. Private sector operators of nursing homes are eligible to apply for funding under the ASLI. The Minister may make grants to an operator in respect of its operating or capital costs as prescribed by the regulations.

     Ontario

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

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

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

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

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

     The Act requires a report to the RHRA when any person has reasonable grounds to suspect abuse of a resident by anyone, or neglect of a resident by staff.  Following a report to the RHRA, there is a mandatory inspection carried out by the RHRA, which results in a report that is posted on the RHRA’s public website. The most recent report must also be posted in the subject home, and be readily available for review if requested thereafter.  The Registrar of the RHRA can receive complaints about a retirement home contravening a provision of the Act, and if such a complaint is received, it must be reviewed promptly.  The Registrar may ask the retirement home that is the subject of the complaint to provide information relevant to the complaint, and has the power to conduct an inspection, issue a written warning or take other action as prescribed in the regulations.

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

     British Columbia

     The Community Care and Assisted Living Act, the Residential Care Regulation, and the Community Care and Assisted Living Regulation(together, the “B.C. Act”) regulate “community care facilities” (long-term care facilities) in substantially the same manner as retirement homes are regulated under the Ontario Act. The B.C. Act defines such a facility as premises used for the purpose of supervising vulnerable persons who require three or more prescribed services (from a list that includes regular assistance with activities of daily living; distribution of medication; management of cash resources; monitoring of food intake; structured behavior management and intervention; and psychosocial or physical rehabilitative therapy).

     The B.C. Act also creates a separate regime for regulating “assisted living residences,” which are facilities providing at least one but not more than two prescribed care services. Assisted living residences are designed for those who can live independently, but who require assistance with certain activities. Unlike community care facilities, assisted living residences must be registered with the registrar of assisted living residences, but do not require a license. Nevertheless, assisted living residences must be operated in a manner that does not jeopardize the health or safety of its residents. If the registrar has reason to believe a residence is not being operated in accordance with this standard, the registrar may inspect the assisted living residence and may suspend or cancel a registration.  Most of the residences in which we have an interest in B.C. are assisted living residences, with one being an independent living residence.

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

     Québec

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

     A certificate of compliance is issued for a period of three years, is renewable and can only be validly transferred to another person with the written permission of the regional licensing agency. An agency may revoke a temporary certificate, or revoke or refuse to issue or renew a certificate of compliance if, among other things, the operator fails to comply with the Act and the Regulation, although the decision of the applicable agency can be contested before the Administrative Tribunal of Québec. The agency may also

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order the residence to take corrective measures, further to an inspection, complaint and/or investigation. The agency is authorized to inspect a residence, at any reasonable time of day, in order to ascertain whether it complies with the Act and the Regulation.

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

     Other Related Laws

     Privacy

     The services provided in our facilities are generally subject to privacy legislation in Canada, including, in certain provinces, privacy laws specifically related to personal health information.  Although the obligations of custodians of personal health information in the various provinces differ to some extent, they all include the obligation to protect the information.  The organizations with which we have management agreements may be the custodian of personal health information/personal information collected in connection with the operation of our facilities.

     Privacy laws in Canada are consent-based and require the implementation of a privacy program involving policies, procedures and the designation of an individual or team with primary responsibility for a custodian’s privacy law compliance.  Mandatory breach notification to the affected individuals is a requirement under some laws.  Mandatory breach notification to the applicable regulator is a requirement under some laws, although not yet in effect in some provinces.  Some laws require notification where personal health information/personal information is processed or stored outside of Canada.  One provincial law (in Quebec) provides for fines where an organization fails to perform required due diligence before outsourcing activities involving personal information to a service provider outside of the province.

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

     The powers of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to the courts.  To date, penalties have generally not been monetary, although that is changing with civil actions for breach of privacy and may change further as a result of class action activity.  Regulators have the authority to make public the identity of a custodian that has been found to have committed a breach, so that there is a reputational risk associated with privacy law violations even where no monetary damages are incurred. The notification of patients (mandatory under some privacy laws) and other activities required to manage a privacy breach can give rise to significant costs.

Other Legislation

     Retirement homes may be subject to residential tenancy laws, such that there can be restrictions on rent increases and termination of tenancies, for instance.  Other provincial legislation applicable to occupational health and safety, public health, and the provision of community health care and funded long-term/post-acute care may also apply to retirement homes.  In addition, municipal laws with respect to matters such as fire safety, food services and zoning would also apply.  In this connection in Ontario, the Building Code and Fire Code have been amended to include various safety measures such as mandatory sprinklers, self-closing doors and increased voice communication system requirements, with grace periods for compliance with some of the requirements.

     In Quebec, the Safety Code was amended in December 2015 to require that private seniors’ residences be equipped with a fire alarm and detection system, as well as the installation of a sprinkler system in certain private seniors’ residences. The amendments come into force March 18, 2016, except regarding the installation of the sprinkler system, which has a five year grace period, and comes into force December 2, 2020.

Taxation

Federal Income Tax Considerations

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

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

General

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

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

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

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

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

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

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

•     If we fail to satisfy either the 75% or 95% gross income tests (as discussed below), but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a 100% tax on an amount equal to (1) the gross income attributable to the greater of (i) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% gross income test (discussed below) or (ii) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% gross income test (discussed below) multiplied by (2) a fraction intended to reflect our profitability;

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

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

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

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

Qualification as a REIT

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

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

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

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

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

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

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

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

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

Based on publicly available information, we believe we have satisfied the share ownership requirements set forth in (5) and (6) above. In addition, Article VI of our by-laws provides for restrictions regarding ownership and transfer of shares. These restrictions are intended to assist us in continuing to satisfy the share ownership requirements described in (5) and (6) above. These restrictions, however, may not ensure that we will, in all cases, be able to satisfy the share ownership requirements described in (5) and (6) above.

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

We may own a number of properties through wholly owned subsidiaries. A corporation will qualify as a “qualified REIT subsidiary” if 100% of its stock is owned by a REIT, and the REIT does not elect to treat the subsidiary as a taxable REIT subsidiary. A “qualified REIT subsidiary” will not be treated as a separate corporation, and all assets, liabilities and items of income, deductions and credits of a “qualified REIT subsidiary” will be treated as assets, liabilities and items (as the case may be) of the REIT. A

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“qualified REIT subsidiary” is not subject to federal income tax, and our ownership of the voting stock of a qualified REIT subsidiary will not violate the restrictions against ownership of securities of any one issuer which constitute more than 10% of the value or total voting power of such issuer or more than 5% of the value of our total assets, as described below under “— Asset Tests.”

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

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

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

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

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

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

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

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

As to gains and items of income recognized after July 30, 2008, “passive foreign exchange gain” for any taxable year will not constitute gross income for purposes of the 95% gross income test and “real estate foreign exchange gain” for any taxable year will not constitute gross income for purposes of the 75% gross income test. Real estate foreign exchange gain is foreign currency gain (as defined in Internal Revenue Code Section 988(b)(1)) which is attributable to: (i) any qualifying item of income or gain for purposes of the 75% gross income test; (ii) the acquisition or ownership of obligations secured by mortgages on real property or interests in real property; or (iii) becoming or being the obligor under obligations secured by mortgages on real property or on interests in real property. Real estate foreign exchange gain also includes Internal Revenue Code Section 987 gain attributable to a qualified business unit (a “QBU”) of a REIT if the QBU itself meets the 75% gross income test for the taxable year and the 75% asset test at the close of each quarter that the REIT has directly or indirectly held the QBU. Real estate foreign exchange gain also includes any other foreign currency gain as determined by the Secretary of the Treasury. Passive foreign exchange gain includes all real estate foreign exchange gain and foreign currency gain which is attributable to: (i) any qualifying item of income or gain for purposes of the 95% gross income test; (ii) the acquisition or ownership of obligations; (iii) becoming or being the obligor under obligations; and (iv) any other foreign currency gain as determined by the Secretary of the Treasury.

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

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

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

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

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

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

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

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

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

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

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

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

Asset Tests.  Within 30 days after the close of each quarter of our taxable year, we must also satisfy several tests relating to the nature and diversification of our assets determined in accordance with generally accepted accounting principles. At least 75% of the value of our total assets must be represented by real estate assets, cash, cash items (including receivables arising in the ordinary course of our operation), government securities and qualified temporary investments. Although the remaining 25% of our assets generally may be invested without restriction, we are prohibited from owning securities representing more than 10% of either the vote (the “10% vote test”) or value (the “10% value test”) of the outstanding securities of any issuer other than a qualified REIT subsidiary,

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another REIT or a taxable REIT subsidiary. Further, no more than 25% (20% for tax years beginning after 2017) of the total assets may be represented by securities of one or more taxable REIT subsidiaries (the “25% asset test”) and no more than 5% of the value of our total assets may be represented by securities of any non-governmental issuer other than a qualified REIT subsidiary (the “5% asset test”), another REIT or a taxable REIT subsidiary. Each of the 10% vote test, the 10% value test and the 25% and 5% asset tests must be satisfied at the end of each quarter. There are special rules which provide relief if the value related tests are not satisfied due to changes in the value of the assets of a REIT.

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

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

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

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

Investments in Taxable REIT Subsidiaries.   REITs may own more than 10% of the voting power and value of securities in taxable REIT subsidiaries. Unlike a qualified REIT subsidiary, other disregarded entity or partnership, the income and assets of a taxable REIT subsidiary are not attributable to the REIT for purposes of satisfying the income and asset ownership requirements applicable to REIT qualification.  We and any taxable corporate entity in which we own an interest are allowed to jointly elect to treat such entity as a “taxable REIT subsidiary.”

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

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

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

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     Annual Distribution Requirements.  In order to avoid being taxed as a regular corporation, we are required to make distributions (other than capital gain distributions) to our stockholders which qualify for the dividends paid deduction in an amount at least equal to (1) the sum of (i) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction and our net capital gain) and (ii) 90% of the after-tax net income, if any, from foreclosure property, minus (2) a portion of certain items of non-cash income. These distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for that year and if paid on or before the first regular distribution payment after such declaration.  Prior to recently enacted legislation, with respect to all REITs the amount distributed could not be preferential. This means that every stockholder of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and no class of stock may be treated otherwise than in accordance with its dividend rights as a class (the “preferential dividend rule”).  Beginning in tax years after 2014, the preferential dividend rule no longer applies to publicly offered REITs, however, the rule is still applicable to other entities taxed as REITs, which would include several of our subsidiaries.  To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates.  As discussed above, we may be subject to an excise tax if we fail to meet certain other distribution requirements. We believe we have satisfied the annual distribution requirements for the year of our initial REIT election and each year thereafter through the year ended December 31, 2015. Although we intend to make timely distributions sufficient to satisfy these annual distribution requirements for subsequent years, economic, market, legal, tax or other factors could limit our ability to meet those requirements. See “Item 1A — Risk Factors.”

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

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

     Failure to Qualify as a REIT

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

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

Federal Income Taxation of Holders of Our Stock

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

•     a citizen or resident of the United States;

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

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

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

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

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

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

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

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

We will be treated as having sufficient earnings and profits to treat as a dividend any distribution up to the amount required to be distributed in order to avoid imposition of the 4% excise tax discussed under “— General” and “— Qualification as a REIT — Annual Distribution Requirements” above. As a result, you may be required to treat as taxable dividends certain distributions that would otherwise result in a tax-free return of capital. Moreover, any “deficiency dividend” will be treated as a dividend (an ordinary dividend or a capital gain dividend, as the case may be), regardless of our earnings and profits. Any other distributions in excess of current or accumulated earnings and profits will not be taxable to you to the extent these distributions do not exceed the adjusted tax basis of your shares of our stock. You will be required to reduce the tax basis of your shares of our stock by the amount of these distributions until the basis has been reduced to zero, after which these distributions will be taxable as capital gain, if the shares of our stock are held as capital assets. The tax basis as so reduced will be used in computing the capital gain or loss, if any, realized upon sale of the shares of our stock. Any loss upon a sale or exchange of shares of our stock which were held for six months or less (after application of certain holding period rules) will generally be treated as a long-term capital loss to the extent you previously received capital gain distributions with respect to these shares of our stock.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Any capital gain dividend with respect to any class of stock that is “regularly traded” on an established securities market will be treated as an ordinary dividend if the foreign stockholder did not own more than 10% of such class of stock at any time during the taxable year. Foreign stockholders generally will not be required to report distributions received from us on U.S. federal income tax returns and all distributions treated as dividends for U.S. federal income tax purposes (including any such capital gain dividends) will be subject to a 30% U.S. withholding tax (unless reduced under an applicable income tax treaty) as discussed above. In addition, the branch profits tax will not apply to such distributions.

Unless our shares constitute a “United States real property interest” within the meaning of FIRPTA or are effectively connected with a U.S. trade or business, a sale of our shares by you generally will not be subject to United States taxation. Though, under the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”), enacted on December 18, 2015, even if our shares were to constitute a “United States real property interest,” non-U.S. stockholders that are “qualified foreign pension funds” (or are owned by a qualified foreign pension) meeting certain requirements may be exempt from FIRPTA withholding on the sale or disposition of our shares. Our shares will not constitute a United States real property interest if we qualify as a “domestically controlled REIT.” We believe that we, and expect to continue to, qualify as a domestically controlled REIT. A domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in value of its shares is held directly or indirectly by foreign stockholders. Generally, under the PATH Act, we are permitted to assume that holders of less than 5% of our shares at all times during a specified testing period are U.S. persons.  However, if you are a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions apply, you will be subject to a 30% tax on such capital gains. In any event, a purchaser of our shares from you will not be required under FIRPTA to withhold on the purchase price if the purchased shares are “regularly traded” on an established securities market or if we are a domestically controlled REIT. Otherwise, under FIRPTA, the purchaser may be required to withhold 10% (increased to 15% under the PATH Act for distributions occurring after February 16, 2016) of the purchase price and remit such amount to the Internal Revenue Service.

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

     Withholding tax at a rate of 30% will be imposed on certain payments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, including distributions in respect of shares of our

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stock and gross proceeds from the sale of shares of our stock, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in recently issued Treasury regulations. Accordingly, the entity through which shares of our stock are held will affect the determination of whether such withholding is required. Withholding currently applies to payments of dividends made after June 30, 2014, and will apply to payments of gross proceeds from a sale of shares of our stock made after December 31, 2018.  Stockholders that are otherwise eligible for an exemption from, or reduction of, U.S. withholding taxes with respect to such dividends and proceeds will be required to seek a refund from the Internal Revenue Service to obtain the benefit of such exemption or reduction.  Additional requirements and conditions may be imposed pursuant to an intergovernmental agreement, if and when entered into, between the United States and such institution’s home jurisdiction. We will not pay any additional amounts to any stockholders in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the recently issued Treasury regulations in light of your particular circumstances.

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

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

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

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

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

U.S. Holders

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

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

•     a citizen or resident of the United States;

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

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

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

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

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

•     the amount realized on the sale or other disposition, less any amount attributable to any accrued interest, which will be taxable

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in the manner described under “— Payments of Interest” above; and

•     your adjusted tax basis in the notes.

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

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

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

Non-U.S. Holders

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

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

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

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

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

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

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

•     us or our paying agent; or

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

Treasury regulations provide that:

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

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

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

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

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

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

     Withholding tax at a rate of 30% will be imposed on payments of interest (including original issue discount) and gross proceeds of sale in respect of debt instruments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in recently issued Treasury regulations. However, the Treasury regulations generally exempt from such withholding requirement obligations, such as debt instruments, issued before July 1, 2014, provided that any material modification of such an obligation made after such date will result in such obligation being considered newly issued as of the effective date of such modification. These withholding rules are generally effective with respect to payments of interest made after June 30, 2014, and with respect to proceeds of sales received after December 31, 2018. We will not pay any additional amounts to any holders or our debt instruments in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the recently issued Treasury regulations in light of your particular circumstances.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Potential Legislation or Other Actions Affecting Tax Consequences

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

State, Local and Foreign Taxes

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

     Changes in applicable tax regulations could negatively affect our financial results.

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The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. Because the U.S. maintains a worldwide corporate tax system, the foreign and U.S. tax systems are somewhat interdependent. Longstanding international tax norms that determine each country’s jurisdiction to tax cross-border international trade are evolving, such as the Base Erosion and Profit Shifting project (“BEPS") currently being undertaken by the G8, G20, and Organization for Economic Cooperation and Development.  Tax changes pursuant to BEPS could reduce the ability of our foreign subsidiaries to deduct for foreign tax purposes the interest they pay on loans from the Company, thereby increasing the foreign tax liability of the subsidiaries; it is also possible that foreign countries could increase their withholding taxes on dividends and interest. Given the unpredictability of these possible changes and their potential interdependency, it is very difficult to assess the overall effect of such potential tax changes on our earnings and cash flow, but such changes could adversely impact our financial results.

Internet Access to Our SEC Filings

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as well as our proxy statements and other materials that are filed with, or furnished to, the Securities and Exchange Commission are made available, free of charge, on the Internet at www.welltower.com, as soon as reasonably practicable after they are filed with, or furnished to, the Securities and Exchange Commission. We routinely post important information on our website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information.  We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.”  Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the Securities and Exchange Commission.  The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

Cautionary Statement Regarding Forward-Looking Statements

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

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

•the status of the economy;

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

•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;

•our ability to transition or sell properties with profitable results;

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

•natural disasters and other acts of God affecting our properties;

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

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

•operator/tenant or joint venture partner bankruptcies or insolvencies;

•the cooperation of joint venture partners;

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

•liability or contract claims by or against operators/tenants;

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

•environmental laws affecting our properties;

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•changes in rules or practices governing our financial reporting;

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

•our ability to maintain our qualification as a REIT;

•key management personnel recruitment and retention; and

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

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

Item 1A. Risk Factors

     This section discusses the most significant factors that affect our business, operations and financial condition. It does not describe all risks and uncertainties applicable to us, our industry or ownership of our securities. If any of the following risks, as well as other risks and uncertainties that are not yet identified or that we currently think are not material, actually occur, we could be materially adversely affected. In that event, the value of our securities could decline.

     We group these risk factors into three categories:

•Risks arising from our business;

•Risks arising from our capital structure; and

•Risks arising from our status as a REIT.

Risks Arising from Our Business

Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or fail to meet our expectations

     We are exposed to the risk that some of our acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. If we agree to provide construction funding to an operator/tenant and the project is not completed, we may need to take steps to ensure completion of the project. Such expenditures may negatively affect our results of operations. Furthermore, there can be no assurance that our anticipated acquisitions and investments, the completion of which is subject to various conditions, will be consummated in accordance with anticipated timing, on anticipated terms, or at all.  We also may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition.

Our investments in joint ventures could be adversely affected by our lack of exclusive control over these investments, our partners’ insolvency or failure to meet their obligations and disputes between us and our partners

     We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that may not be present with other methods of ownership, including the possibility that our partner might become insolvent, refuse to make capital contributions when due or otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and other commitments; that our partner might at any time have economic or other business interests or goals that are or become inconsistent with our interests or goals; that we could become engaged in a dispute with our partner, which could require us to expend additional resources to resolve such dispute and could have an adverse impact on the operations and profitability of the joint venture; and that our partner may be in a position to take action or withhold consent contrary to our instructions or requests. In addition, our ability to transfer our interest in a joint venture to a third party may be restricted. In some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction. Our ability to acquire our partner’s interest may be limited if we do not have sufficient cash, available borrowing capacity or other capital resources. In such event, we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. Joint ventures may require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition or financing of a property.

We are exposed to operational risks with respect to our seniors housing operating properties that could adversely affect our revenue and operations

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     We are exposed to various operational risks with respect to our seniors housing operating properties that may increase our costs or adversely affect our ability to generate revenues. These risks include fluctuations in occupancy, Medicare and Medicaid reimbursement, if applicable, and private pay rates; economic conditions; competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor (as a result of unionization or otherwise). Any one or a combination of these factors may adversely affect our revenue and operations.

Decreases in our operators’ revenues or increases in our operators’ expenses could affect our operators’ ability to make payments to us

     Our operators’ revenues are primarily driven by occupancy, private pay rates, and Medicare and Medicaid reimbursement, if applicable. Expenses for these facilities are primarily driven by the costs of labor, food, utilities, taxes, insurance and rent or debt service. Revenues from government reimbursement have, and may continue to, come under pressure due to reimbursement cuts and state budget shortfalls. Operating costs continue to increase for our operators. To the extent that any decrease in revenues and/or any increase in operating expenses result in a property not generating enough cash to make payments to us, the credit of our operator and the value of other collateral would have to be relied upon. To the extent the value of such property is reduced, we may need to record an impairment for such asset. Furthermore, if we determine to dispose of an underperforming property, such sale may result in a loss. Any such impairment or loss on sale would negatively affect our financial results.

Increased competition may affect our operators’ ability to meet their obligations tous  

     The operators of our properties compete on a local and regional basis with operators of properties and other health care providers that provide comparable services. We cannot be certain that the operators of all of our facilities will be able to achieve and maintain occupancy and rate levels that will enable them to meet all of their obligations to us. Our operators are expected to encounter increased competition in the future that could limit their ability to attract residents or expand their businesses.

A severe cold and flu season, epidemics or any other widespread illnesses could adversely affect the occupancy of our seniors housing operating and triple-net properties

     Our and our operators’ revenues are dependent on occupancy.  It is impossible to predict the severity of the cold and flu season or the occurrence of epidemics or any other widespread illnesses.  The occupancy of our seniors housing operating and triple-net properties could significantly decrease in the event of a severe cold and flu season, an epidemic or any other widespread illness.  Such a decrease could affect the operating income of our seniors housing operating properties and the ability of our triple-net operators to make payments to us.

The insolvency or bankruptcy of our obligors may adversely affect our business, results of operations and financial condition

     We are exposed to the risk that our obligors may not be able to meet the rent, principal and interest or other payments due us, which may result in an obligor bankruptcy or insolvency, or that an obligor might become subject to bankruptcy or insolvency proceedings for other reasons. Although our operating lease agreements provide us with the right to evict a tenant, demand immediate payment of rent and exercise other remedies, and our loans provide us with the right to terminate any funding obligation, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, the bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization. An obligor in bankruptcy or subject to insolvency proceedings may be able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and interest in the case of a loan, and to exercise other rights and remedies.

     We may be required to fund certain expenses (e.g., real estate taxes and maintenance) to preserve the value of an investment property, avoid the imposition of liens on a property and/or transition a property to a new tenant. In some instances, we have terminated our lease with a tenant and relet the property to another tenant. In some of those situations, we have provided working capital loans to and limited indemnification of the new obligor. If we cannot transition a leased property to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities. Should such events occur, our revenue and operating cash flow may be adversely affected.

We may not be able to timely reinvest our sale proceeds on terms acceptable to us

     From time to time, we will have cash available from (1) the proceeds of sales of our securities, (2) principal payments on our loans receivable and (3) the sale of properties, including non-elective dispositions, under the terms of master leases or similar financial support arrangements. In order to maintain current revenues and continue generating attractive returns, we expect to re-invest these

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proceeds in a timely manner. We compete for real estate investments with a broad variety of potential investors. This competition for attractive investments may negatively affect our ability to make timely investments on terms acceptable to us.

Failure to properly manage our rapid growth could distract our management or increaseour expenses

     We have experienced rapid growth and development in a relatively short period of time and expect to continue this rapid growth in the future. This growth has resulted in increased levels of responsibility for our management. Future property acquisitions could place significant additional demands on, and require us to expand, our management, resources and personnel. Our failure to manage any such rapid growth effectively could harm our business and, in particular, our financial condition, results of operations and cash flows, which could negatively affect our ability to make distributions to stockholders. Our growth could also increase our capital requirements, which may require us to issue potentially dilutive equity securities and incur additional debt.

We depend on Genesis Healthcare, LLC (“Genesis”) for a significant portion of our revenues and any inability or unwillingness by Genesis to satisfy its obligations under its agreements with us could adversely affect us

     The properties we lease to Genesis account for a significant portion of our revenues, and because our leases with Genesis are triple-net leases, we also depend on Genesis to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that Genesis will have sufficient assets, income and access to financing to enable it to make rental payments to us or to otherwise satisfy its obligations under our leases, and any inability or unwillingness by Genesis to do so could have an adverse effect on us. Genesis has also agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with its business, and we cannot assure you that Genesis will have sufficient assets, income, access to financing and insurance coverage to enable it to satisfy its indemnification obligations.

The properties managed by Sunrise Senior Living, LLC account for a significant portion of our revenues and operating income and any adverse developments in its business or financial condition could adversely affect us

     Sunrise Senior Living, LLC manages our entire Sunrise property portfolio, which as of December 31, 2015, consisted of 152 seniors housing properties.  These properties account for a significant portion of our revenues, and we rely on Sunrise Senior Living, LLC to manage these properties efficiently and effectively.  Any adverse developments in Sunrise Senior Living, LLC’s business or financial condition could impair its ability to manage our properties efficiently and effectively, which could adversely affect us.

Ownership of property outside the United States may subject us to different or greater risks than those associated with our domestic operations

     We have operations in Canada and the United Kingdom. International development, ownership, and operating activities involve risks that are different from those we face with respect to our domestic properties and operations. These risks include, but are not limited to, any international currency gain recognized with respect to changes in exchange rates may not qualify under the 75% gross income test or the 95% gross income test that we must satisfy annually in order to qualify and maintain our status as a REIT; challenges with respect to the repatriation of foreign earnings and cash; changes in foreign political, regulatory, and economic conditions, including regionally, nationally, and locally; challenges in managing international operations; challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment and legal proceedings; foreign ownership restrictions with respect to operations in countries; differences in lending practices and the willingness of domestic or foreign lenders to provide financing; regional or country-specific business cycles and economic instability; and failure to comply with applicable laws and regulations in the United States that affect foreign operations, including, but not limited to, the U.S. Foreign Corrupt Practices Act. If we are unable to successfully manage the risks associated with international expansion and operations, our results of operations and financial condition may be adversely affected.

We do not know if our tenants will renew their existing leases, and if they do not,we may be unable to lease the properties on as favorable terms, or at all

     We cannot predict whether our tenants will renew existing leases at the end of their lease terms, which expire at various times. If these leases are not renewed, we would be required to find other tenants to occupy those properties or sell them. There can be no assurance that we would be able to identify suitable replacement tenants or enter into leases with new tenants on terms as favorable to us as the current leases or that we would be able to lease those properties at all.

Our operators’ may not have the necessary insurance coverage to insure adequately against losses

     In recent years, long-term/post-acute care and seniors housing operators have experienced substantial increases in both the number and size of patient care liability claims. As a result, general and professional liability costs have increased in some markets. General and professional liability insurance coverage may be restricted or very costly, which may adversely affect the property operators’

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future operations, cash flows and financial condition, and may have a material adverse effect on the property operators’ ability to meet their obligations to us. 

Our ownership of properties through ground leases exposes us to the loss of suchproperties upon breach or termination of the ground leases

     We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on which the building is located, and we may acquire additional properties in the future through the purchase of interests in ground leases. As the lessee under a ground lease, we are exposed to the possibility of losing the property upon termination of the ground lease or an earlier breach of the ground lease by us.

The requirements of, or changes to, governmental reimbursement programs, such as Medicare or Medicaid, could have a material adverse effect on our obligors’ liquidity, financial condition and results of operations, which could adversely affect our obligors’ ability to meet their obligations to us

     Some of our obligors’ businesses are affected by government reimbursement. To the extent that an operator/tenant receives a significant portion of its revenues from government payors, primarily Medicare and Medicaid, such revenues may be subject to statutory and regulatory changes, retroactive rate adjustments, recovery of program overpayments or set-offs, court decisions, administrative rulings, policy interpretations, payment or other delays by fiscal intermediaries or carriers, government funding restrictions (at a program level or with respect to specific facilities) and interruption or delays in payments due to any ongoing government investigations and audits at such property. In recent years, government payors have frozen or reduced payments to health care providers due to budgetary pressures. Health care reimbursement will likely continue to be of paramount importance to federal and state authorities. We cannot make any assessment as to the ultimate timing or effect any future legislative reforms may have on the financial condition of our obligors and properties. There can be no assurance that adequate reimbursement levels will be available for services provided by any property operator, whether the property receives reimbursement from Medicare, Medicaid or private payors. Significant limits on the scope of services reimbursed and on reimbursement rates and fees could have a material adverse effect on an obligor’s liquidity, financial condition and results of operations, which could adversely affect the ability of an obligor to meet its obligations to us. See “Item 1 — Business — Certain Government Regulations — United States — Reimbursement” above.

     The Patient Protection and Affordable Care Act of 2010, as modified by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Reform Laws”), provides those states that expand their Medicaid coverage to otherwise eligible state residents with incomes at or below 138% of the federal poverty level with an increased federal medical assistance percentage, effective January 1, 2014, when certain conditions are met. On June 28, 2012, the United States Supreme Court upheld the individual mandate of the Health Reform Laws but partially invalidated the expansion of Medicaid. The ruling on Medicaid expansion allows states to elect not to participate in the expansion—and to forego funding for the Medicaid expansion—without losing their existing Medicaid funding. Given that the federal government substantially funds the Medicaid expansion, it is unclear how many states will ultimately pursue this option, although, as of early February 2016, roughly half of the states have expanded Medicaid coverage. The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but further straining state budgets and their ability to pay our tenants. While the federal government will pay for approximately 100% of those additional costs from 2014 through 2016, states will be expected to pay for part of those additional costs beginning in 2017. In light of this, at least one state that has passed legislation to allow the state to expand its Medicaid coverage has included sunset provisions in the legislation that require that the expanded benefits be reduced or eliminated if the federal government’s funding for the program is decreased or eliminated, permitting the state to re-visit the issue once it begins to share financial responsibility for the expansion. With increasingly strained budgets, it is unclear how states that do not include such sunset provisions will pay their share of these additional Medicaid costs and what other health care expenditures could be reduced as a result. A significant reduction in other health care related spending by states to pay for increased Medicaid costs could affect our tenants’ revenue streams. See “Item 1 — Business — Certain Government Regulations — United States — Reimbursement” above.

     More generally, and because of the dynamic nature of the legislative and regulatory environment for health care products and services, and in light of existing federal deficit and budgetary concerns, we cannot predict the impact that broad-based, far-reaching legislative or regulatory changes could have on the U.S. economy, our business or that of our operators and tenants.

Our operators’ or tenants’ failure to comply with federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet their obligations to us

     Our operators and tenants generally are subject to varying levels of federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards. Our operators’ or tenants’ failure to comply with any of these laws, regulations, or standards could result in loss of accreditation, denial of reimbursement, imposition of fines, suspension, decertification or exclusion from federal and state health care programs, loss of license or closure of the facility. Such actions may have an effect on

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our operators’ or tenants’ ability to make lease payments to us and, therefore, adversely impact us. See “Item 1 — Business — Certain Government Regulations — United States — Other Related Laws, Initiatives, and Considerations” above.

     Many of our properties may require a license, registration, and/or certificate of need (“CON”) to operate. Failure to obtain a license, registration, or CON, or loss of a required license, registration, or CON would prevent a facility from operating in the manner intended by the operators or tenants. These events could materially adversely affect our operators’ or tenants’ ability to make rent payments to us. State and local laws also may regulate the expansion, including the addition of new beds or services or acquisition of medical equipment, and the construction or renovation of health care facilities, by requiring a CON or other similar approval from a state agency. See “Item 1 — Business — Certain Government Regulations — United States — Licensing and Certification” above.

Illiquidity of real estate investments could significantly impede our ability torespond to adverse changes in the performance of our properties

     Real estate investments are relatively illiquid. Our ability to quickly sell or exchange any of our properties in response to changes in economic and other conditions will be limited. No assurances can be given that we will recognize full value for any property that we are required to sell for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations. In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.

Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse effect on our financial condition

     From time to time, we may be directly involved in a number of legal proceedings, lawsuits and other claims. We may also be named as defendants in lawsuits allegedly arising out of our actions or the actions of our operators/tenants or managers in which such operators/tenants or managers have agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses. An unfavorable resolution of pending or future litigation may have a material adverse effect on our business, results of operations and financial condition. Regardless of its outcome, litigation may result in substantial costs and expenses and significantly divert the attention of management. There can be no assurance that we will be able to prevail in, or achieve a favorable settlement of, pending or future litigation. In addition, pending litigation or future litigation, government proceedings or environmental matters could lead to increased costs or interruption of our normal business operations.

Development, redevelopment and construction risks could affect our profitability

     At any given time, we may be in the process of constructing one or more new facilities that ultimately will require a CON and license before they can be utilized by the operator for their intended use. The operator also may need to obtain Medicare and Medicaid certification and enter into Medicare and Medicaid provider agreements and/or third party payor contracts. In the event that the operator is unable to obtain the necessary CON, licensure, certification, provider agreements or contracts after the completion of construction, there is a risk that we will not be able to earn any revenues on the facility until either the initial operator obtains a license or certification to operate the new facility and the necessary provider agreements or contracts or we find and contract with a new operator that is able to obtain a license to operate the facility for its intended use and the necessary provider agreements or contracts.

     In connection with our renovation, redevelopment, development and related construction activities, we may be unable to obtain, or suffer delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations. These factors could result in increased costs or our abandonment of these projects. In addition, we may not be able to obtain financing on favorable terms, which may render us unable to proceed with our development activities, and we may not be able to complete construction and lease-up of a property on schedule, which could result in increased debt service expense or construction costs.

     Additionally, the time frame required for development, construction and lease-up of these properties means that we may have to wait years for significant cash returns. Because we are required to make cash distributions to our stockholders, if the cash flow from operations or refinancing is not sufficient, we may be forced to borrow additional money to fund such distributions. Newly developed and acquired properties may not produce the cash flow that we expect, which could adversely affect our overall financial performance.

     In deciding whether to acquire or develop a particular property, we make assumptions regarding the expected future performance of that property. In particular, we estimate the return on our investment based on expected occupancy, rental rates and capital costs. If our financial projections with respect to a new property are inaccurate as a result of increases in capital costs or other factors, the property may fail to perform as we expected in analyzing our investment. Our estimate of the costs of repositioning or redeveloping an acquired property may prove to be inaccurate, which may result in our failure to meet our profitability goals. Additionally, we may

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acquire new properties that are not fully leased, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property.

We may experience losses caused by severe weather conditions or natural disasters, which could result in an increase of our or our tenants’ cost of insurance, a decrease in our anticipated revenues or a significant loss of the capital we have invested in a property

     We maintain or require our tenants to maintain comprehensive insurance coverage on our properties with terms, conditions, limits and deductibles that we believe are appropriate given the relative risk and costs of such coverage, and we continually review our insurance programs and requirements. However, a large number of our properties are located in areas particularly susceptible to revenue loss, cost increase or damage caused by severe weather conditions or natural disasters such as hurricanes, earthquakes, tornadoes and floods. We believe, given current industry practice and analysis prepared by outside consultants, that our and our tenants’ insurance coverage is appropriate to cover reasonably anticipated losses that may be caused by hurricanes, earthquakes, tornadoes, floods and other severe weather conditions and natural disasters. Nevertheless, we are always subject to the risk that such insurance will not fully cover all losses and, depending on the severity of the event and the impact on our properties, such insurance may not cover a significant portion of the losses. These losses may lead to an increase of our and our tenants’ cost of insurance, a decrease in our anticipated revenues from an affected property and a loss of all or a portion of the capital we have invested in an affected property.  In addition, we or our tenants may not purchase insurance under certain circumstances if the cost of insurance exceeds, in our or our tenants’ judgment, the value of the coverage relative to the risk of loss.

We may incur costs to remediate environmental contamination at our properties, which could have an adverse effect on our or our obligors’ business or financial condition

     Under various federal and state laws, owners or operators of real estate may be required to respond to the presence or release of hazardous substances on the property and may be held liable for property damage, personal injuries or penalties that result from environmental contamination or exposure to hazardous substances. We may become liable to reimburse the government for damages and costs it incurs in connection with the contamination. Generally, such liability attaches to a person based on the person’s relationship to the property. Our tenants or borrowers are primarily responsible for the condition of the property. Moreover, we review environmental site assessments of the properties that we own or encumber prior to taking an interest in them. Those assessments are designed to meet the “all appropriate inquiry” standard, which we believe qualifies us for the innocent purchaser defense if environmental liabilities arise. Based upon such assessments, we do not believe that any of our properties are subject to material environmental contamination. However, environmental liabilities may be present in our properties and we may incur costs to remediate contamination, which could have a material adverse effect on our business or financial condition or the business or financial condition of our obligors.

Cybersecurity incidents could disrupt our business and result in the loss of confidential information

     Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data, and other electronic security breaches. Such cyber attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber attack. Cybersecurity incidents could disrupt our business and compromise the confidential information of our employees, operators and tenants.

Our certificate of incorporation and by-laws contain anti-takeover provisions

     Our certificate of incorporation and by-laws contain anti-takeover provisions (restrictions on share ownership and transfer and super majority stockholder approval requirements for business combinations) that could make it more difficult for or even prevent a third party from acquiring us without the approval of our incumbent Board of Directors. Provisions and agreements that inhibit or discourage takeover attempts could reduce the market value of our common stock.

Our success depends on key personnel whose continued service is not guaranteed

     We are dependent on key personnel. Although we have entered into employment agreements with our executive officers, losing any one of them could, at least temporarily, have an adverse impact on our operations. We believe that losing more than one could have a material adverse impact on our business.

Risks Arising from Our Capital Structure

We may become more leveraged

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     Permanent financing for our investments is typically provided through a combination of public offerings of debt and equity securities and the incurrence or assumption of secured debt. The incurrence or assumption of indebtedness may cause us to become more leveraged, which could (1) require us to dedicate a greater portion of our cash flow to the payment of debt service, (2) make us more vulnerable to a downturn in the economy, (3) limit our ability to obtain additional financing, or (4) negatively affect our credit ratings or outlook by one or more of the rating agencies.

We are subject to covenants in our debt agreements that may restrict or limit our operations and acquisitions and our failure to comply with the covenants in our debt agreements could have a material adverse impact on our business, results of operations and financial condition

     Our debt agreements contain various covenants, restrictions and events of default. Among other things, these provisions require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. Breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. These defaults could have a material adverse impact on our business, results of operations and financial condition.

Limitations on our ability to access capital could have an adverse effect on our ability to make future investments or to meet our obligations and commitments

     We cannot assure you that we will be able to raise the capital necessary to make future investments or to meet our obligations and commitments as they mature.  Our access to capital depends upon a number of factors over which we have little or no control, including rising interest rates, inflation and other general market conditions; the market’s perception of our growth potential and our current and potential future earnings and cash distributions; the market price of the shares of our capital stock and the credit ratings of our debt securities; the financial stability of our lenders, which might impair their ability to meet their commitments to us or their willingness to make additional loans to us; changes in the credit ratings on U.S. government debt securities; or default or delay in payment by the United States of its obligations. If our access to capital is limited by these factors or other factors, it could negatively impact our ability to acquire properties, repay or refinance our indebtedness, fund operations or make distributions to our stockholders.

Downgrades in our credit ratings could have a material adverse impact on our cost and availability of capital

     We plan to manage the Company to maintain a capital structure consistent with our current profile, but there can be no assurance that we will be able to maintain our current credit ratings. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

Fluctuations in the value of foreign currencies could adversely affect our results of operations and financial position

     As we expand our operations internationally, currency exchange rate fluctuations could affect our results of operations and financial position. We expect to generate an increasing portion of our revenue and expenses in such foreign currencies as the Canadian dollar and the British pound. Although we may enter into foreign exchange agreements with financial institutions and/or obtain local currency mortgage debt in order to reduce our exposure to fluctuations in the value of foreign currencies, we cannot assure you that foreign currency fluctuations will not have a material adverse effect on us.

Our entry into swap agreements may not effectively reduce our exposure to changes in interest rates or foreign currency exchange rates

     We enter into swap agreements from time to time to manage some of our exposure to interest rate and foreign currency exchange rate volatility. These swap agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. In addition, these arrangements may not be effective in reducing our exposure to changes in interest rates or foreign currency exchange rates. When we use forward-starting interest rate swaps, there is a risk that we will not complete the long-term borrowing against which the swap is intended to hedge. If such events occur, our results of operations may be adversely affected.

Risks Arising from Our Status as a REIT

We might fail to qualify or remain qualified as a REIT

     We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and believe we have and will continue to operate in such a manner. If we lose our status as a REIT, we will face serious income tax consequences that will substantially reduce the funds available for satisfying our obligations and for distribution to our stockholders because:

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•we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;

•we could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and

•unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.

     Since REIT qualification requires us to meet a number of complex requirements, it is possible that we may fail to fulfill them, and if we do, our earnings will be reduced by the amount of U.S. federal and other income taxes owed. A reduction in our earnings would affect the amount we could distribute to our stockholders. If we do not qualify as a REIT, we would not be required to make distributions to stockholders since a non-REIT is not required to pay dividends to stockholders in order to maintain REIT status or avoid an excise tax. See “Item 1 — Business — Taxation — Federal Income Tax Considerations” above for a discussion of the provisions of the Code that apply to us and the effects of failure to qualify as a REIT.

     In addition, if we fail to qualify as a REIT, all distributions to stockholders would continue to be treated as dividends to the extent of our current and accumulated earnings and profits, although corporate stockholders may be eligible for the dividends received deduction, and individual stockholders may be eligible for taxation at the rates generally applicable to long-term capital gains (currently at a maximum rate of 20%) with respect to distributions.

     As a result of all these factors, our failure to qualify as a REIT also could impair our ability to implement our business strategy and would adversely affect the value of our common stock.

     Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to remain qualified as a REIT. Although we believe that we qualify as a REIT, we cannot assure you that we will continue to qualify or remain qualified as a REIT for U.S. federal income tax purposes. See “Item 1 — Business — Taxation — Federal Income Tax Considerations” above.

Certain subsidiaries might fail to qualify or remain qualified as a REIT

     We own interests in a number of entities which have elected to be taxed as REITs for federal income tax purposes, some of which we consolidate for financial reporting purposes but each of which is treated as a separate REIT for federal income tax purposes (each a “Subsidiary REIT”).  To qualify as a REIT, each Subsidiary REIT must independently satisfy all of the REIT qualification requirements under the Code, together with all other rules applicable to REITs.  Provided that each Subsidiary REIT qualifies as a REIT, our interests in the Subsidiary REITs will be treated as qualifying real estate assets for purposes of the REIT asset tests.  See “Item 1 – Business – Taxation – Federal Income Tax Considerations – Qualification as a REIT – Asset Tests” above.  If a Subsidiary REIT fails to qualify as a REIT in any taxable year, such Subsidiary REIT will be subject to federal and state income taxes and may not be able to qualify as a REIT for the four subsequent taxable years.  Any such failure could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT, unless we are able to avail ourselves of certain relief provisions.

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

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

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

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

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

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

Item 1B.  Unresolved Staff Comments

None.

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Item 2.  Properties 

We own our corporate headquarters located at 4500 Dorr Street, Toledo, Ohio 43615. We also lease corporate offices in California, Canada and the United Kingdom and have ground leases relating to certain of our properties. The following table sets forth certain information regarding the properties that comprise our consolidated real property and real estate loan investments as of December 31, 2015 (dollars in thousands and annualized revenues adjusted for timing of investment):

		Triple-Net					Seniors Housing Operating
Property Location		Number of Properties	Total Investment		Annualized Revenues		Number of Properties	Total Investment		Annualized Revenues
	Alabama	4	$	36,064	$	3,777	-	$	-	$	-
	Arizona	2		26,229		2,129	4		61,590		21,643
	California	28		521,032		53,635	49		1,401,544		406,568
	Colorado	6		220,438		19,019	5		145,554		39,599
	Connecticut	14		181,567		21,292	15		400,887		127,418
	District Of Columbia	-		-		-	1		64,807		13,893
	Delaware	11		161,880		19,660	1		21,586		6,210
	Florida	43		593,363		55,001	6		576,254		77,420
	Georgia	8		102,828		9,414	7		124,942		36,295
	Iowa	3		46,916		4,324	1		33,276		8,960
	Idaho	2		33,326		3,551	-		-		-
	Illinois	13		276,616		25,876	13		447,407		104,156
	Indiana	36		535,615		53,270	-		-		-
	Kansas	27		228,905		16,427	3		71,771		17,657
	Kentucky	12		98,976		14,957	2		39,434		12,595
	Louisiana	3		21,451		3,349	2		52,156		11,718
	Massachusetts	31		372,189		53,489	33		941,674		211,109
	Maryland	26		401,734		41,357	3		84,221		32,512
	Maine	-		-		-	2		50,666		17,820
	Michigan	6		102,612		9,968	5		113,041		25,867
	Minnesota	9		210,533		14,026	4		115,688		23,698
	Missouri	2		28,320		1,171	4		137,698		20,141
	Mississippi	3		30,147		2,444	-		-		-
	Montana	1		6,266		948	-		-		-
	North Carolina	56		391,386		38,795	1		41,460		7,134
	Nebraska	4		34,033		15,342	-		-		-
	New Hampshire	12		172,718		23,410	4		119,954		29,723
	New Jersey	67		1,420,271		144,374	8		244,350		65,915
	New Mexico	-		-		-	1		19,038		1,593
	Nevada	5		86,164		12,217	2		37,350		9,946
	New York	9		201,410		18,051	10		349,716		77,276
	Ohio	28		229,031		38,171	4		198,222		29,215
	Oklahoma	19		150,460		12,968	2		38,922		4,179
	Oregon	10		75,671		6,337	-		-		-
	Pennsylvania	53		1,331,667		158,356	6		83,081		37,106
	Rhode Island	3		43,802		6,031	3		69,010		21,156
	South Carolina	5		34,602		5,550	-		-		-
	Tennessee	24		165,388		24,367	2		50,805		14,790
	Texas	45		594,463		61,905	15		510,222		98,671
	Utah	2		31,724		2,461	1		17,545		8,817
	Virginia	14		202,859		20,033	2		38,493		15,715
	Vermont	2		25,393		3,511	1		28,080		6,864
	Washington	24		455,323		44,724	11		331,280		62,173
	Wisconsin	8		134,120		14,474	-		-		-
	West Virginia	25		376,283		50,902	-		-		-
	Total domestic	705		10,393,775		1,131,063	233		7,061,726		1,705,550
	Canada	14		277,977		15,763	103		2,058,121		406,614
	United Kingdom	60		1,123,413		118,428	52		1,457,237		303,158
	Total international	74		1,401,390		134,191	155		3,515,358		709,772
	Grand total	779	$	11,795,165	$	1,265,253	388	$	10,577,084	$	2,415,322

43

		Outpatient Medical
Property Location		Number of Properties	Total Investment		Annualized Revenues
	Alaska	1	$	22,667	$	2,809
	Alabama	3		31,637		5,308
	Arkansas	1		24,382		1,027
	Arizona	4		68,885		8,213
	California	30		880,782		67,173
	Colorado	1		12,642		1,804
	Connecticut	1		9,886		-
	Florida	37		465,472		61,459
	Georgia	10		162,880		20,585
	Iowa	1		6,974		2,193
	Illinois	5		53,688		7,971
	Indiana	8		152,126		17,326
	Kansas	7		78,474		12,059
	Kentucky	1		8,153		772
	Maryland	5		80,535		5,396
	Maine	1		21,649		2,805
	Michigan	1		15,983		2,280
	Minnesota	8		179,786		23,689
	Missouri	7		149,053		17,610
	North Carolina	3		58,086		6,506
	Nebraska	2		36,815		5,794
	New Hampshire	1		14,673		1,511
	New Jersey	7		215,048		37,389
	New Mexico	3		34,665		3,498
	Nevada	5		46,748		3,802
	New York	8		84,330		7,768
	Ohio	8		76,546		13,386
	Oklahoma	2		25,843		3,279
	Oregon	1		9,763		1,267
	South Carolina	1		26,910		2,282
	Tennessee	7		78,906		9,968
	Texas	51		891,594		87,667
	Virginia	3		51,645		7,800
	Washington	6		188,369		20,317
	Wisconsin	19		250,839		28,243
	Total	259	$	4,516,434	$	500,954

The following table sets forth occupancy, coverages and average annualized revenues for certain property types (excluding investments in unconsolidated entities):

	Occupancy(1)		Coverages(1,2)		Average Annualized Revenues(3)
	2015	2014	2015	2014	2015		2014
Triple-net(4)	87.2%	87.7%	1.49x	1.54x	$	16,047	$	14,562	per bed/unit
Seniors housing operating(5)	91.0%	90.3%	n/a	n/a		60,260		67,376	per unit
Outpatient medical(6)	95.1%	94.4%	n/a	n/a		33		33	per sq. ft.
(1) We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy and coverages for properties other than medical office buildings and have not independently verified the information.
(2) Represents the ratio of our triple-net customers' earnings before interest, taxes, depreciation, amortization, rent and management fees to contractual rent or interest due us. Data reflects the 12 months ended September 30 for the periods presented.
(3) Represents annualized revenues divided by total beds, units or square feet as presented in the tables above.
(4) Occupancy represents average quarterly operating occupancy based on the quarters ended September 30 and excludes properties that are unstabilized, closed or for which data is not available or meaningful.
(5) Occupancy for seniors housing operating represents average occupancy for the three months ended December 31.
(6) Outpatient medical facilities occupancy represents the percentage of total rentable square feet leased and occupied (including month-to-month and holdover leases and excluding terminations) as of December 31.

44

The following table sets forth information regarding lease expirations for certain portions of our portfolio as of December 31, 2015 (dollars in thousands):

			Expiration Year
			2016		2017		2018		2019		2020		2021		2022		2023		2024		2025		Thereafter
Triple-net:
	Properties		0		30		56		1		12		24		37		1		6		57		517
	Base rent(1)	$	0	$	12,846	$	41,162	$	1,368	$	14,571	$	35,797	$	32,959	$	692	$	12,130	$	66,118	$	948,129
	% of base rent		0.0%		1.1%		3.5%		0.1%		1.2%		3.1%		2.8%		0.1%		1.0%		5.7%		81.3%
	Units		0		1,165		3,686		123		1,076		3,625		4,731		60		831		4,189		56,319
	% of units		0.0%		1.5%		4.9%		0.2%		1.4%		4.8%		6.2%		0.1%		1.1%		5.5%		74.3%
Outpatient medical:
	Square feet		792,914		1,092,946		933,888		1,085,684		1,251,256		1,182,630		2,178,650		1,103,893		1,411,610		585,459		3,691,978
	Base rent(1)	$	21,884	$	27,369	$	24,225	$	27,762	$	32,365	$	29,630	$	45,348	$	26,609	$	37,890	$	17,156	$	69,591
	% of base rent		6.1%		7.6%		6.7%		7.7%		9.0%		8.2%		12.6%		7.4%		10.5%		4.8%		19.4%
	Leases		283		283		255		259		243		187		186		152		101		75		164
	% of leases		12.9%		12.9%		11.7%		11.8%		11.1%		8.5%		8.5%		6.9%		4.6%		3.4%		7.7%
(1) The most recent monthly base rent including straight line for leases with fixed escalators or annual cash rents with contingent escalators.  Base rent does not include tenant recoveries or amortization of above and below market lease intangibles.

Item 3.  Legal Proceedings

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

Item 4.  Mine Safety Disclosures

None.

PART II

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

There were 4,965 stockholders of record as of January 31, 2016. The following table sets forth, for the periods indicated, the high and low prices of our common stock on the New York Stock Exchange (NYSE:HCN), and common dividends paid per share:

		Sales Price				Dividends Paid
		High		Low		Per Share
2015
	First Quarter	$	84.88	$	73.20	$	0.825
	Second Quarter		79.60		65.48		0.825
	Third Quarter		70.22		61.00		0.825
	Fourth Quarter		71.25		58.21		0.825
2014
	First Quarter	$	59.93	$	52.90	$	0.795
	Second Quarter		65.25		58.91		0.795
	Third Quarter		68.36		61.42		0.795
	Fourth Quarter		78.17		62.05		0.795

Our Board of Directors has approved a new quarterly cash dividend rate of $0.86 per share of common stock per quarter, commencing with the February 2016 dividend. The declaration and payment of quarterly dividends remains subject to the review and approval of the Board of Directors.

Stockholder Return Performance Presentation

Set forth below is a line graph comparing the yearly percentage change and the cumulative total stockholder return on our shares of common stock against the cumulative total return of the S & P Composite-500 Stock Index and the FTSE NAREIT Equity Index. As of December 31, 2015, 160 companies comprised the FTSE NAREIT Equity Index. The Index consists of REITs identified by NAREIT as equity (those REITs which have at least 75% of their investments in real property). The data are based on the closing prices as of December 31 for each of the five years. 2010 equals $100 and dividends are assumed to be reinvested.

45

 

	12/31/10	12/31/11	12/31/12	12/31/13	12/31/14	12/31/15
S & P 500	100.00	102.11	118.45	156.82	178.28	180.75
Welltower Inc.	100.00	121.27	143.36	131.29	194.98	183.82
FTSE NAREIT Equity	100.00	108.29	127.85	131.01	170.49	175.94

Except to the extent that we specifically incorporate this information by reference, the foregoing Stockholder Return Performance Presentation shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended. This information shall not otherwise be deemed filed under such Acts.

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1, 2015 through October 31, 2015	-	$	-
November 1, 2015 through November 30, 2015	68		59.01
December 1, 2015 through December 31, 2015	-		-
Totals	68	$	59.01
(1) During the three months ended December 31, 2015, the Company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
(2) No shares were purchased as part of publicly announced plans or programs.

46

Item 6.  Selected Financial Data

The following selected financial data for the five years ended December 31, 2015 are derived from our audited consolidated financial statements (in thousands, except per share data):

		Year Ended December 31,
		2011		2012		2013		2014		2015
Operating Data
Revenues		$	1,313,182	$	1,805,044	$	2,880,608	$	3,343,546	$	3,859,826
Expenses			1,200,979		1,619,132		2,778,363		2,959,333		3,223,709
Income from continuing operations before income taxes and income (loss) from unconsolidated entities			112,203		185,912		102,245		384,213		636,117
Income tax (expense) benefit			(1,388)		(7,612)		(7,491)		1,267		(6,451)
Income (loss) from unconsolidated entities			5,772		2,482		(8,187)		(27,426)		(21,504)
Income from continuing operations			116,587		180,782		86,567		358,054		608,162
Income from discontinued operations, net			96,129		114,058		51,713		7,135		-
Gain (loss) on real estate dispositions, net			-		-		-		147,111		280,387
Net income			212,716		294,840		138,280		512,300		888,549
Preferred stock dividends			60,502		69,129		66,336		65,408		65,406
Preferred stock redemption charge			-		6,242		-		-		-
Net income (loss) attributable to noncontrolling interests			(4,894)		(2,415)		(6,770)		147		4,799
Net income attributable to common stockholders		$	157,108	$	221,884	$	78,714	$	446,745	$	818,344
Other Data
Average number of common shares outstanding:
	Basic		173,741		224,343		276,929		306,272		348,240
	Diluted		174,401		225,953		278,761		307,747		349,424
Per Share Data
Basic:
	Income from continuing operations attributable to common stockholders	$	0.35	$	0.48	$	0.10	$	1.44	$	2.35
	Discontinued operations, net		0.55		0.51		0.19		0.02		-
	Net income attributable to common stockholders *	$	0.90	$	0.99	$	0.28	$	1.46	$	2.35
Diluted:
	Income from continuing operations attributable to common stockholders	$	0.35	$	0.48	$	0.10	$	1.43	$	2.34
	Discontinued operations, net		0.55		0.50		0.19		0.02		-
	Net income attributable to common stockholders *	$	0.90	$	0.98	$	0.28	$	1.45	$	2.34
Cash distributions per common share		$	2.835	$	2.96	$	3.06	$	3.18	$	3.30
			December 31,
Balance Sheet Data			2011		2012		2013		2014		2015
	Net real estate investments	$	13,942,350	$	17,423,009	$	21,680,221	$	22,851,196	$	26,888,685
	Total assets(1)		14,878,245		19,491,552		23,026,666		24,962,923		29,023,845
	Total long-term obligations(1)		7,194,391		8,474,342		10,594,723		10,776,640		12,967,686
	Total liabilities(1)		7,565,948		8,936,441		11,235,296		11,403,465		13,664,877
	Total preferred stock		1,010,417		1,022,917		1,017,361		1,006,250		1,006,250
	Total equity		7,278,647		10,520,519		11,756,331		13,473,049		15,175,885
	* Amounts may not sum due to rounding
	(1) In 2015, we adopted new guidance on the presentation of debt issuance costs.  This guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability.  Adopting this guidance resulted in a reduction to total assets, total long-term obligations and total liabilities, which are presented for all periods above in accordance with this new guidance. See Note 2 to our consolidated financial statements for additional information.

47

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

EXECUTIVE SUMMARY
Company Overview      Business Strategy      Capital Market Outlook      Key Transactions in 2015      Key Performance Indicators, Trends and Uncertainties      Corporate Governance	49 49 50 50 51 52
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash      Off-Balance Sheet Arrangements      Contractual Obligations      Capital Structure	52 53 53 54
RESULTS OF OPERATIONS
Summary      Triple-net      Seniors Housing Operating      Outpatient Medical      Non-Segment/Corporate	56 57 60 62 64
OTHER
Non-GAAP Financial Measures	65
Critical Accounting Policies	69

48

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

     The following discussion and analysis is based primarily on the consolidated financial statements of Welltower Inc. for the periods presented and should be read together with the notes thereto contained in this Annual Report on Form 10-K. Other important factors are identified in “Item 1 — Business” and “Item 1A — Risk Factors” above.

Executive Summary

Company Overview

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

     The following table summarizes our consolidated portfolio for the year ended December 31, 2015 (dollars in thousands):

	Net Operating		Percentage of	Number of
Type of Property	Income (NOI)(1)		NOI	Properties
Triple-net	$	1,200,301	53.6%	779
Seniors housing operating		701,262	31.4%	388
Outpatient medical		334,915	15.0%	259
Totals	$	2,236,478	100.0%	1,426
(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI.  Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.

Business Strategy

     Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.

     Substantially all of our revenues are derived from operating lease rentals, resident fees and services, and interest earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our customers/partners experience operating difficulties and become unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends.  We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility.  When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.

     In addition to our asset management and research efforts, we also structure our investments to help mitigate payment risk. Operating leases and loans are normally credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

     For the year ended December 31, 2015, rental income and resident fees represented 41% and 56%, respectively, of total revenues.  Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our

49

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

yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.

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

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

     Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also possible that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our primary unsecured credit facility. At December 31, 2015, we had $360,908,000 of cash and cash equivalents, $61,782,000 of restricted cash and $1,610,075,000 of available borrowing capacity under our primary unsecured credit facility.

Capital Market Outlook

     We believe the capital markets remain supportive of our investment strategy. For the year ended December 31, 2015, we raised $3,272,283,000 in aggregate gross proceeds through the issuance of common stock and unsecured debt. The capital raised, in combination with available cash and borrowing capacity under our primary unsecured credit facility, supported pro rata gross new investments of $4,819,684,000 for the year. We expect attractive investment opportunities to remain available in the future as we continue to leverage the benefits of our relationship investment strategy.

Key Transactions in 2015

Capital.  In February 2015, we completed the public issuance of 19,550,000 shares of common stock at a price of $75.50 per share for approximate gross proceeds of $1,476,025,000.  This was the largest overnight common stock offering and the highest offering price in our history.  In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025, generating approximately $743,407,000 of net proceeds.  This was the largest single tranche U.S. debt offering in our history.  In October 2015, we re-opened this tranche and issued an additional $500,000,000 of these notes, generating net proceeds of approximately $484,660,000. Also during October 2015, we raised approximately $47,463,000 under our Equity Shelf Program (as defined below).  In November 2015, we issued $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020, generating net proceeds of $223,367,000. Also, for the year ended December 31, 2015, we raised $272,531,000 through our dividend reinvestment program.

Investments. The following summarizes our acquisitions and joint venture investments made during the year ended December 31, 2015 (dollars in thousands):

	Properties		Investment Amount(1)	Capitalization Rates(2)		Book Amount(3)
Triple-net	76	$	1,501,537	6.8%	$	1,506,179
Seniors housing operating	77		2,093,482	6.2%		2,814,878
Outpatient medical	11		170,499	6.0%		540,338
Total acquisitions/JVs	164	$	3,765,518	6.4%	$	4,861,395
(1) Represents stated purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
(2) Represents annualized contractual or projected income to be received in cash divided by investment amounts.
(3) Represents amounts recorded on our books including fair value adjustments pursuant to U.S. GAAP.  See Note 3 to our consolidated financial statements for additional information.

Dispositions. The following summarizes property dispositions made during the year ended December 31, 2015 (dollars in thousands):

50

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

	Properties		Proceeds(1)	Capitalization Rates(2)		Book Amount(3)
Triple-net	26	$	440,576	7.7%	$	362,024
Outpatient medical	11		608,101	5.2%		181,553
Total property sales	37	$	1,048,677	6.2%	$	543,577
(1) Represents pro rata proceeds received upon disposition including any seller financing.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
(3) Represents carrying value of assets at time of disposition.  See Note 5 to our audited consolidated financial statements for additional information.

Dividends. Our Board of Directors increased the annual cash dividend to $3.44 per common share ($0.86 per share quarterly), as compared to $3.30 per common share for 2015, beginning in February 2016.  The dividend declared for the quarter ended December 31, 2015 represents the 179^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, credit strength and concentration risk.  Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes.

Operating Performance. We believe that net income attributable to common stockholders (“NICS”) is the most appropriate earnings measure. Other useful supplemental measures of our operating performance include funds from operations (“FFO”), net operating income from continuing operations (“NOI”) and same store cash NOI (“SSCNOI”); however, these supplemental measures are not defined by U.S. generally accepted accounting principles (“U.S. GAAP”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations of FFO, NOI and SSCNOI. These earnings measures are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):

	Year Ended December 31,
	2013		2014		2015
Net income attributable to common stockholders	$	78,714	$	446,745	$	818,344
Funds from operations		924,884		1,174,081		1,409,640
Net operating income from continuing operations		1,673,795		1,940,188		2,237,569
Same store cash net operating income		1,145,629		1,192,245		1,213,752

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

	Year Ended December 31,
	2013	2014	2015
Debt to book capitalization ratio	48%	45%	46%
Debt to undepreciated book capitalization ratio	43%	40%	41%
Debt to market capitalization ratio	39%	29%	33%
Adjusted interest coverage ratio	3.23x	3.86x	4.57x
Adjusted fixed charge coverage ratio	2.56x	3.06x	3.61x

Concentration Risk. We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be at risk if certain sectors were to

51

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

experience downturns. Property mix measures the portion of our NOI that relates to our various property types. Relationship mix measures the portion of our NOI that relates to our top five relationships.  Geographic mix measures the portion of our NOI that relates to our top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by NOI for the periods indicated below:

		December 31,
		2013	2014	2015
Property mix:(1)
	Triple-net	53%	53%	54%
	Seniors housing operating	32%	33%	31%
	Outpatient medical	15%	14%	15%
Relationship mix:(1)
	Genesis Healthcare	17%	16%	17%
	Sunrise Senior Living(2)	13%	15%	13%
	Brookdale Senior Living	7%	9%	7%
	Revera(2)	3%	4%	5%
	Benchmark Senior Living	4%	4%	4%
	Remaining customers	56%	52%	54%
Geographic mix:(1)
	California	10%	10%	10%
	United Kingdom	6%	7%	9%
	New Jersey	9%	8%	8%
	Texas	7%	7%	7%
	Pennsylvania	6%	5%	6%
	Remaining	62%	63%	60%
(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.
(2) Revera owns a controlling interest in Sunrise Senior Living.

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

Corporate Governance

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

Liquidity and Capital Resources

Sources and Uses of Cash

     Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances,

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

property operating expenses, and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below.  The following is a summary of our sources and uses of cash flows (dollars in thousands):

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December, 31		December, 31					December, 31
	2013		2014		$		%	2015		$		%	$		%
Beginning cash and cash equivalents	$	1,033,764	$	158,780	$	(874,984)	-85%	$	473,726	$	314,946	198%	$	(560,038)	-54%
Cash provided from (used in):
Operating activities		988,497		1,138,670		150,173	15%		1,373,468		234,798	21%		384,971	39%
Investing activities		(3,531,593)		(2,126,206)		1,405,387	-40%		(3,484,160)		(1,357,954)	64%		47,433	-1%
Financing activities		1,667,670		1,303,172		(364,498)	-22%		2,006,449		703,277	54%		338,779	20%
Effect of foreign currency translation on cash and cash equivalents		442		(690)		(1,132)	n/a		(8,575)		(7,885)	1,143%		(9,017)	n/a
Ending cash and cash equivalents	$	158,780	$	473,726	$	314,946	198%	$	360,908	$	(112,818)	-24%	$	202,128	127%

Operating Activities. The change in net cash provided from operating activities is primarily attributable to increases in NOI which is primarily due to acquisitions.  Please see “Results of Operations” for further discussion.  For the years ended December 31, 2013, 2014 and 2015, cash flows from operations exceeded cash distributions to stockholders.

Investing Activities.  The changes in net cash used in investing activities are primarily attributable to acquisitions, real estate loans receivable and investments in unconsolidated entities which are summarized above in “Key Transactions in 2015.”  Please refer to Notes 3 and 6 of our consolidated financial statements for additional information.  The following is a summary of non-acquisition capital improvements (dollars in thousands):

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2013		2014		$		%	2015		$		%	$		%
New development	$	247,560	$	197,881	$	(49,679)	-20%	$	244,561	$	46,680	24%	$	(2,999)	-1%
Recurring capital expenditures, tenant improvements and lease commissions		60,984		59,134		(1,850)	-3%		64,458		5,324	9%		3,474	6%
Renovations, redevelopments and other capital improvements		74,848		73,646		(1,202)	-2%		123,294		49,648	67%		48,446	65%
Total	$	383,392	$	330,661	$	(52,731)	-14%	$	432,313	$	101,652	31%	$	48,921	13%

     The change in new development is primarily due to the number and size of construction projects on-going during the relevant periods.  Renovations, redevelopments and other capital improvements include expenditures to maximize property value, increase net operating income, maintain a market-competitive position and/or achieve property stabilization. 

     Financing Activities. The changes in net cash provided from financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock, and dividend payments which are summarized above in “Key Transactions in 2015.”  Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.

Off-Balance Sheet Arrangements

     At December 31, 2015, we had investments in unconsolidated entities with our ownership ranging from 10% to 50%. Please see Note 7 to our consolidated financial statements for additional information.  We use financial derivative instruments to hedge interest rate exposure. Please see Note 11 to our consolidated financial statements for additional information.  At December 31, 2015, we had nine outstanding letter of credit obligations. Please see Note 12 to our consolidated financial statements for additional information.

Contractual Obligations

     The following table summarizes our payment requirements under contractual obligations as of December 31, 2015 (in thousands):

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

	Payments Due by Period
Contractual Obligations	Total		2016		2017-2018		2019-2020		Thereafter
Unsecured revolving credit facility(1)	$	835,000	$	-	$	-	$	835,000	$	-
Senior unsecured notes and term credit facilities:(2)
U.S. Dollar senior unsecured notes		6,200,000		400,000		900,000		1,050,000		3,850,000
Pounds Sterling senior unsecured notes(3)		1,548,330		-		-		-		1,548,330
Canadian Dollar senior unsecured notes(3)		216,779		-		-		216,779		-
U.S. Dollar term credit facility		500,000		-		-		500,000		-
Canadian Dollar term credit facility(3)		180,649		-		-		180,649		-
Secured debt:(2,3)
Consolidated		3,478,207		547,325		1,127,424		554,421		1,249,037
Unconsolidated		474,772		25,984		34,583		21,757		392,448
Contractual interest obligations:(4)
Unsecured revolving credit facility		33,642		5,624		22,495		5,523		-
Senior unsecured notes and term loans(3)		3,592,177		353,830		675,744		572,354		1,990,249
Consolidated secured debt(3)		720,472		147,884		213,257		130,951		228,380
Unconsolidated secured debt(3)		136,870		16,897		31,273		29,171		59,529
Capital lease obligations(5)		98,569		4,732		9,411		8,506		75,920
Operating lease obligations(5)		990,027		15,543		31,315		30,593		912,576
Purchase obligations(5)		549,676		211,635		332,024		6,017		-
Other long-term liabilities(6)		5,654		1,475		2,950		1,229		-
Total contractual obligations	$	19,560,824	$	1,730,929	$	3,380,476	$	4,142,950	$	10,306,468
(1) Relates to our unsecured revolving credit facility with an aggregate commitment of $2,500,000,000. See Note 9 to our consolidated financial statements.
(2) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(3) Based on foreign currency exchange rates in effect as of balance sheet date.
(4) Based on variable interest rates in effect as of balance sheet date.
(5) See Note 12 to our consolidated financial statements.
(6) Primarily relates to payments to be made under our Supplemental Executive Retirement Plan, which is discussed in Note 19 to the consolidated financial statements.

Capital Structure

     Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends.  Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2015, we were in compliance with all of the covenants under our debt agreements. Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our senior unsecured notes are used to determine the fees and interest charged. A summary of certain covenants and our results as of and for the year ended December 31, 2015 is as follows:

	Per Agreement
Covenant	Primary Unsecured Credit Facility	Senior Unsecured Notes	Actual At December 31, 2015
Total Indebtedness to Book Capitalization Ratio maximum	60%	n/a	46%
Secured Indebtedness to Total Assets Ratio maximum	30%	40%	12%
Total Indebtedness to Total Assets maximum	n/a	60%	45%
Unsecured Debt to Unencumbered Assets maximum	60%	n/a	39%
Adjusted Interest Coverage Ratio minimum	n/a	1.50x	4.57x
Adjusted Fixed Charge Coverage minimum	1.50x	n/a	3.61x

     We plan to manage the Company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

     On May 1, 2015, we filed with the Securities and Exchange Commission (1) an open-ended automatic or “universal” shelf

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

registration statement covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement in connection with our enhanced dividend reinvestment plan under which we may issue up to 15,000,000 shares of common stock. As of January 31, 2016, 11,743,723  shares of common stock remained available for issuance under this registration statement. We have entered into separate Equity Distribution Agreements with each of UBS Securities LLC, KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. relating to the offer and sale from time to time of up to $630,015,000 aggregate amount of our common stock (“Equity Shelf Program”). As of January 31, 2016, we had $392,617,000 of remaining capacity under the Equity Shelf Program. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our primary unsecured credit facility.

55

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

Results of Operations

Summary

     Our primary sources of revenue include rent, resident fees and services, and interest income. Our primary expenses include interest expense, depreciation and amortization, property operating expenses, transaction costs and general and administrative expenses.  We evaluate our business and make resource allocations on our three business segments: triple-net, seniors housing operating and outpatient medical.  The primary performance measures for our properties are NOI and SSCNOI, which are discussed below.  Please see Note 17 to our consolidated financial statements for additional information.  The following is a summary of our results of operations (dollars in thousands, except per share amounts):

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2013		2014		Amount		%	2015		Amount		%	Amount		%
Net income attributable to common stockholders		$	78,714	$	446,745	$	368,031	468%	$	818,344	$	371,599	83%	$	739,630	940%
Funds from operations			924,884		1,174,081		249,197	27%		1,409,640		235,559	20%		484,756	52%
Adjusted EBITDA			1,503,715		1,877,992		374,277	25%		2,278,930		400,938	21%		775,215	52%
Net operating income from continuing operations			1,673,795		1,940,188		266,393	16%		2,237,569		297,381	15%		563,774	34%
Same store cash NOI			1,145,629		1,192,245		46,616	4%		1,213,752		21,507	2%		68,123	6%
Per share data (fully diluted):
	Net income attributable to common stockholders	$	0.28	$	1.45	$	1.17	418%	$	2.34	$	0.89	61%	$	2.06	736%
	Funds from operations		3.32		3.82		0.50	15%		4.03		0.21	5%		0.71	21%
Adjusted interest coverage ratio			3.23x		3.86x		0.63x	20%		4.57x		0.71x	18%		1.34x	41%
Adjusted fixed charge coverage ratio			2.56x		3.06x		0.50x	20%		3.61x		0.55x	18%		1.05x	41%

     The following table represents the changes in outstanding common stock for the period from January 1, 2013 to December 31, 2015 (in thousands):

		Year Ended
		December 31, 2013	December 31, 2014	December 31, 2015	Totals
Beginning balance		260,374	289,564	328,790	260,374
Public offerings		23,000	33,925	19,550	76,475
Dividend reinvestment plan issuances		3,430	4,123	4,024	11,577
Senior note conversions		988	259	1,330	2,577
Preferred stock conversions		117	233	-	350
Issuances in acquisitions of noncontrolling interests		1,109	-	-	1,109
Option exercises		214	498	249	961
Equity Shelf Program issuances		-	-	696	696
Other, net		332	188	139	659
Ending balance		289,564	328,790	354,778	354,778
Average number of shares outstanding:
	Basic	276,929	306,272	348,240
	Diluted	278,761	307,747	349,424

     During the past three years, inflation has not significantly affected our earnings because of the moderate inflation rate. Additionally, a large portion of our earnings are derived primarily from long-term investments with predictable rates of return. These investments are mainly financed with a combination of equity, senior unsecured notes, secured debt and borrowings under our primary unsecured credit facility. During inflationary periods, which generally are accompanied by rising interest rates, our ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs. Presuming the current inflation rate remains moderate and long-term interest rates do not increase significantly, we believe that inflation will not impact the availability of equity and debt financing for us.

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

Triple-net

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

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2013		2014		$		%	2015		$		%	$		%
SSCNOI(1)	$	671,609	$	690,941	$	19,332	3%	$	712,806	$	21,865	3%	$	41,197	6%
Non-cash NOI attributable to same store properties(1)		37,153		55,531		18,378	49%		72,666		17,135	31%		35,513	96%
NOI attributable to non same store properties(2)		185,859		280,662		94,803	51%		414,829		134,167	48%		228,970	123%
NOI	$	894,621	$	1,027,134	$	132,513	15%	$	1,200,301	$	173,167	17%	$	305,680	34%
(1) Change is due to increases in cash and non-cash NOI (described below) related to 496 same store properties.
(2) Change is primarily due to the acquisition of 211 properties, the conversion of 23 construction projects into revenue-generating properties subsequent to January 1, 2013 and the transition of 38 properties from our seniors housing operating segment on September 1, 2013.

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

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2013		2014		$		%	2015		$		%	$		%
Revenues:
	Rental income	$	866,138	$	992,638	$	126,500	15%	$	1,119,322	$	126,684	13%	$	253,184	29%
	Interest income		28,214		32,255		4,041	14%		74,108		41,853	130%		45,894	163%
	Other income		1,504		2,973		1,469	98%		6,871		3,898	131%		5,367	357%
			895,856		1,027,866		132,010	15%		1,200,301		172,435	17%		304,445	34%
Property operating expenses			1,235		732		(503)	-41%		-		(732)	-100%		(1,235)	-100%
	Net operating income from continuing operations (NOI)		894,621		1,027,134		132,513	15%		1,200,301		171,703	17%		305,680	34%
Other expenses:
	Interest expense		23,322		38,460		15,138	65%		30,288		(8,172)	-21%		6,966	30%
	Loss (gain) on derivatives, net		4,877		(1,770)		(6,647)	n/a		(58,427)		(56,657)	3201%		(63,304)	-1298%
	Depreciation and amortization		249,913		273,296		23,383	9%		294,484		21,188	8%		44,571	18%
	Transaction costs		24,426		45,146		20,720	85%		53,254		8,108	18%		28,828	118%
	Loss (gain) on extinguishment of debt, net		40		98		58	145%		10,095		9,997	10201%		10,055	25138%
	Provision for loan losses		2,110		-		(2,110)	-100%		-		-	n/a		(2,110)	-100%
	Impairment of assets		-		-		-	n/a		2,220		2,220	n/a		2,220	n/a
	Other expenses		-		8,825		8,825	n/a		35,648		26,823	304%		35,648	n/a
			304,688		364,055		59,367	19%		367,562		3,507	1%		62,874	21%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities			589,933		663,079		73,146	12%		832,739		169,660	26%		242,806	41%
Income tax benefit (expense)			(1,817)		6,141		7,958	n/a		(4,244)		(10,385)	-169%		(2,427)	134%
Income (loss) from unconsolidated entities			5,035		5,423		388	8%		8,260		2,837	52%		3,225	64%
Income from continuing operations			593,151		674,643		81,492	14%		836,755		162,112	24%		243,604	41%
Discontinued operations, net			57,742		7,135		(50,607)	-88%		-		(7,135)	-100%		(57,742)	-100%
Gain (loss) on real estate dispositions, net			-		146,205		146,205	n/a		86,261		(59,944)	-41%		86,261	n/a
Net income			650,893		827,983		177,090	27%		923,016		95,033	11%		272,123	42%
Less: Net income attributable to noncontrolling interests			1,558		1,874		316	20%		6,348		4,474	239%		4,790	307%
Net income attributable to common stockholders		$	649,335	$	826,109	$	176,774	27%	$	916,668	$	90,559	11%	$	267,333	41%

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

The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed triple-net properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties.  These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period.  If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase.  Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues.  Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the three months ended December 31, 2015, we had no lease renewals but we had 16 leases with rental rate increasers ranging from 0.01% to 0.32% in our triple-net portfolio. 

The increase in interest income is attributable to investments in new loans and draws on existing loans in the current year, which includes a first mortgage loan to Genesis Healthcare to facilitate their merger with Skilled Healthcare Group.  The increase in other income year-to-date over the prior year includes the receipt of an early prepayment fee related to a real estate loan receivable. 

During the year ended December 31, 2015, we completed five triple-net construction projects representing $104,844,000 or $234,027 per bed/unit plus expansion projects totaling $38,808,000. The following is a summary of triple-net construction projects pending as of December 31, 2015 (dollars in thousands):

Location	Units/Beds		Commitment		Balance	Est. Completion
Edmond, OK	142	$	24,500	$	11,667	3Q16
London, England	79		29,492		16,240	3Q16
Carrollton, TX	104		18,900		7,681	3Q16
Piscataway, NJ	124		30,600		19,386	4Q16
Raleigh, NC	225		93,000		42,707	4Q16
Tulsa, OK	145		25,800		6,290	4Q16
Livingston, NJ	120		51,440		19,453	1Q17
Bracknell, England	64		16,293		7,080	1Q17
Lancaster, PA	80		15,875		2,725	1Q17
Lititz, PA	80		15,200		2,763	1Q17
Total	1,163	$	321,100	$	135,992

     Total interest expense represents secured debt interest expense and interest expense on capital lease obligations.  The change in secured debt interest expense is due to the net effect and timing of assumptions, segment transitions, extinguishments and principal amortizations. The following is a summary of our triple-net secured debt principal activity (dollars in thousands):

	Year Ended			Year Ended			Year Ended
	December 31, 2013			December 31, 2014			December 31, 2015
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	218,741	5.393%	$	587,136	5.394%	$	670,769	5.337%
Debt transitioned		367,997	5.298%		-	0.000%		-	0.000%
Debt issued		13,800	5.480%		-	0.000%		-	0.000%
Debt assumed		9,578	5.582%		120,352	5.404%		44,142	5.046%
Debt extinguished		(16,482)	3.304%		(22,970)	6.235%		(132,545)	4.695%
Foreign currency		-	0.000%		(2,180)	5.317%		(15,633)	5.315%
Principal payments		(6,498)	5.698%		(11,569)	5.564%		(12,719)	5.450%
Ending balance	$	587,136	5.394%	$	670,769	5.337%	$	554,014	5.488%
Monthly averages	$	339,129	5.394%	$	596,941	5.381%	$	551,803	5.518%

In April 2011, we completed the acquisition of substantially all of the real estate assets of privately-owned Genesis Healthcare Corporation.  In conjunction with this transaction, we received the option to acquire an ownership interest in Genesis Healthcare.  In February 2015, Genesis Healthcare closed on a transaction to merge with Skilled Healthcare Group to become a publicly traded company which required us to record the value of the derivative asset due to the net settlement feature.  This event resulted in $58,427,000 gain. During the fourth quarter of 2015, the cost basis of this investment exceeded the fair value.  Management

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

performed an assessment to determine whether the decline in fair value was other than temporary and concluded that it was.  As a result, we recognized an other than temporary impairment charge of $35,648,000 which is recorded in other expense. 

Depreciation and amortization increased primarily as a result of new property acquisitions and the conversions of newly constructed properties. To the extent that we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

Transaction costs represent costs incurred with property acquisitions including due diligence costs, fees for legal and valuation services, the termination of pre-existing relationships, lease termination expenses and other similar costs.  The change in transaction costs from year to year is primarily a function of investment volume.  The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt. 

Changes in gains on sales of properties are related to the volume of property sales and the sales prices.  We recognized impairment losses on certain held-for-sale properties as the fair value less estimated costs to sell exceeded our carrying values. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at December 31, 2013, as discontinued operations for the periods presented (dollars in thousands):

		Year Ended December 31,
		2013		2014		2015
Rental income		$	8,987	$	881	$	-
Expenses:
	Interest expense		2,566		157		-
	Provision for depreciation		5,304		-		-
Income (loss) from discontinued operations, net		$	1,117	$	724	$	-

     During the year ended December 31, 2013, we wrote off one loan related to an active adult community.  During the years ended December 31, 2014 and 2015, we did not record a provision for loan loss or have any loan write-offs.  The provision for loan losses is related to our critical accounting estimate for the allowance for loan losses and is discussed in “Critical Accounting Policies” and Note 6 to our consolidated financial statements.

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

59

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

Seniors Housing Operating

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

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2013		2014		$		%	2015		$		%	$		%
SSCNOI(1)	$	252,802	$	274,377	$	21,575	9%	$	267,431	$	(6,946)	-3%	$	14,629	6%
NOI attributable to non same store properties(2)		275,361		356,886		81,525	30%		433,831		76,945	22%		158,470	58%
NOI	$	528,163	$	631,263	$	103,100	20%	$	701,262	$	69,999	11%	$	173,099	33%
(1) Due to increases in cash revenues (described below) related to 116 same store properties.
(2) Primarily due to the acquisition of 271 properties subsequent to January 1, 2013 and the transition of 38 properties to our triple-net segment on September 1, 2013.

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

		Year Ended					One Year Change			Year Ended		One Year Change			Two Year Change
			December 31,		December 31,					December 31,
			2013		2014		$		%	2015		$		%	$		%
Revenues:
	Resident fees and services		$	1,616,290	$	1,892,237	$	275,947	17%	$	2,158,031	$	265,794	14%	$	541,741	34%
	Interest income			757		2,119		1,362	180%		4,180		2,061	97%		3,423	452%
	Other income			355		3,215		2,860	806%		6,060		2,845	88%		5,705	1607%
				1,617,402		1,897,571		280,169	17%		2,168,271		270,700	14%		550,869	34%
Property operating expenses				1,089,239		1,266,308		177,069	16%		1,467,009		200,701	16%		377,770	35%
	Net operating income from continuing operations (NOI)			528,163		631,263		103,100	20%		701,262		69,999	11%		173,099	33%
Other expenses:
	Interest expense			92,148		113,099		20,951	23%		147,832		34,733	31%		55,684	60%
	Loss (gain) on derivatives, net			(407)		275		682	-168%		-		(275)	-100%		407	-100%
	Depreciation and amortization			478,007		418,199		(59,808)	-13%		351,733		(66,466)	-16%		(126,274)	-26%
	Transaction costs			107,066		16,880		(90,186)	-84%		54,966		38,086	226%		(52,100)	-49%
	Loss (gain) on extinguishment of debt, net			(3,372)		383		3,755	-111%		(195)		(578)	-151%		3,177	-94%
	Other expenses			-		1,437		1,437	n/a		-		(1,437)	-100%		-	n/a
				673,442		550,273		(123,169)	-18%		554,336		4,063	1%		(119,106)	-18%
(Loss) income from continuing operations before income from unconsolidated entities				(145,279)		80,990		226,269	-156%		146,926		65,936	81%		292,205	-201%
Income tax expense				(5,337)		(3,047)		2,290	-43%		986		4,033	-132%		6,323	-118%
(Loss) income from unconsolidated entities				(22,695)		(38,204)		(15,509)	68%		(32,672)		5,532	-14%		(9,977)	44%
Net income (loss)				(173,311)		39,739		213,050	-123%		115,240		75,501	190%		288,551	-166%
Less: Net income (loss) attributable to noncontrolling interests				(8,639)		(2,335)		6,304	-73%		(1,438)		897	-38%		7,201	-83%
Net income (loss) attributable to common stockholders			$	(164,672)	$	42,074	$	206,746	-126%	$	116,678	$	74,604	177%	$	281,350	-171%

Fluctuations in revenues and property operating expenses are primarily a result of acquisitions subsequent to January 1, 2013, partially offset by the transition of 38 properties to triple-net on September 1, 2013.  The increase in other income for the year ended December 31, 2015 is primarily a result of insurance proceeds received relating to a property.  The fluctuations in depreciation and amortization are due to the net impact of acquisitions and variations in amortization of short-lived intangible assets.  To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly.  Losses from unconsolidated

60

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

entities are primarily attributable to depreciation and amortization of short-lived intangible assets related to our investments in unconsolidated joint ventures with Chartwell in 2012, Sunrise in 2013 and Senior Resource Group in 2014.

     During the year ended December 31, 2015, we completed one seniors housing operating construction project representing $19,869,000 or $283,843 per unit.  The following is a summary of our seniors housing operating construction projects, excluding expansions, pending as of December 31, 2015 (dollars in thousands):

Location	Units/Beds		Commitment		Balance	Est. Completion
Camberley, England	102	$	20,459	$	18,755	4Q16
Bushey, England	95		58,403		14,070	2Q18
Chertsey, England	93		45,612		12,446	3Q18
Total	290	$	124,474	$	45,271

      Interest expense represents secured debt interest expense as well as interest expense related to all foreign senior unsecured debt.  Please refer to Note 10 to our consolidated financial statements for additional information. The increases in interest expense are attributed primarily to the £550,000,000 Sterling-dominated senior unsecured notes issued in November 2013, the £500,000,000 Sterling-dominated senior unsecured notes issued in November 2014, and the $300,000,000 Canadian-denominated senior unsecured notes issued in November 2015. The following is a summary of our seniors housing operating property secured debt principal activity (dollars in thousands):

	Year Ended			Year Ended			Year Ended
	December 31, 2013			December 31, 2014			December 31, 2015
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	1,369,526	4.874%	$	1,714,714	4.622%	$	1,654,531	4.422%
Debt issued		75,408	4.891%		109,503	3.374%		228,685	2.776%
Debt assumed		1,228,706	4.063%		18,484	4.359%		842,316	3.420%
Debt extinguished		(548,876)	3.597%		(114,793)	3.626%		(285,599)	4.188%
Debt transitioned		(367,997)	5.298%		-	0.000%		-	0.000%
Foreign currency		(10,361)	4.013%		(39,379)	3.727%		(110,691)	3.625%
Principal payments		(31,692)	4.643%		(33,998)	4.296%		(38,690)	4.126%
Ending balance	$	1,714,714	4.622%	$	1,654,531	4.422%	$	2,290,552	3.958%
Monthly averages	$	1,723,122	4.820%	$	1,657,416	4.515%	$	1,894,609	4.261%

     The fluctuations in gains/losses on debt extinguishments is primarily attributable the volume of extinguishments and terms of the related secured debt.  Transaction costs represent costs incurred with property acquisitions (including due diligence costs, fees for legal and valuation services, and termination of pre-existing relationships computed based on the fair value of the assets acquired), lease termination fees and other similar costs.  The change in transaction costs from year to year is primarily a function of investment volume.  The majority of our seniors housing operating properties are formed through partnership interests.  Net income attributable to noncontrolling interests represents our partners’ share of net income or loss related to those partnerships where we are the controlling partner.

61

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

Outpatient Medical

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

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2013		2014		$		%	2015		$		%	$		%
SSCNOI(1)	$	221,218	$	226,927	$	5,709	3%	$	233,515	$	6,588	3%	$	12,297	6%
Non-cash NOI attributable to same store properties(1)		8,436		7,494		(942)	-11%		6,097		(1,397)	-19%		(2,339)	-28%
NOI attributable to non same store properties(2)		21,061		46,693		25,632	122%		95,303		48,610	104%		74,242	353%
NOI	$	250,715	$	281,114	$	30,399	12%	$	334,915	$	53,801	19%	$	84,200	34%
(1) Due to increases in cash and non-cash NOI (described below) related to 164 same store properties.
(2) Primarily due to the acquisition of 50 properties and conversions of construction projects into 14 revenue-generating properties subsequent to January 1, 2013.

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

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2013		2014		$		%	2015		$		%	$		%
Revenues:
	Rental income	$	361,451	$	413,129	$	51,678	14%	$	479,626	$	66,497	16%	$	118,175	33%
	Interest income		3,692		3,293		(399)	-11%		5,853		2,560	78%		2,161	59%
	Other income		1,911		1,010		(901)	-47%		4,684		3,674	364%		2,773	145%
			367,054		417,432		50,378	14%		490,163		72,731	17%		123,109	34%
Property operating expenses			116,339		136,318		19,979	17%		155,248		18,930	14%		38,909	33%
	Net operating income from continuing operations (NOI)		250,715		281,114		30,399	12%		334,915		53,801	19%		84,200	34%
Other expenses:
	Interest expense		36,823		32,904		(3,919)	-11%		28,822		(4,082)	-12%		(8,001)	-22%
	Depreciation and amortization		137,880		152,635		14,755	11%		180,023		27,388	18%		42,143	31%
	Transaction costs		1,909		7,512		5,603	294%		2,706		(4,806)	-64%		797	42%
	Loss (gain) on extinguishment of debt, net		-		405		405	n/a		-		(405)	-100%		-	n/a
			176,612		193,456		16,844	10%		211,551		18,095	9%		34,939	20%
Income from continuing operations before income taxes and income (loss)  from unconsolidated entities			74,103		87,658		13,555	18%		123,364		35,706	41%		49,261	66%
Income tax expense			(270)		(1,827)		(1,557)	577%		245		2,072	n/a		515	n/a
Income (loss) from unconsolidated entities			9,473		5,355		(4,118)	-43%		2,908		(2,447)	-46%		(6,565)	-69%
Income from continuing operations			83,306		91,186		7,880	9%		126,517		35,331	39%		43,211	52%
Discontinued operations, net			(6,029)		-		6,029	-100%		-		-	n/a		6,029	-100%
Gain (loss) on real estate dispositions, net			-		906		906	n/a		194,126		193,220	21327%		194,126	n/a
Net income (loss)			77,277		92,092		14,815	19%		320,643		228,551	248%		243,366	315%
Less: Net income (loss) attributable to noncontrolling interests			310		608		298	96%		(110)		(718)	n/a		(420)	n/a
Net income (loss) attributable to common stockholders		$	76,967	$	91,484	$	14,517	19%	$	320,753	$	229,269	251%	$	243,786	317%

The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed outpatient medical properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index.  These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period.  If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase.  Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues.  Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the three months ended December 31, 2015, our consolidated

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

outpatient medical portfolio signed 75,573 square feet of new leases and 145,892 square feet of renewals.  The weighted-average term of these leases was six years, with a rate of $33.28 per square foot and tenant improvement and lease commission costs of $24.87 per square foot.  Substantially all of these leases during the referenced quarter contain an annual fixed or contingent escalation rent structure ranging from the change in CPI to 4%.

During the year ended December 31, 2015, we completed one outpatient medical construction project representing $16,592,000 or $325 per square foot. The following is a summary of outpatient medical construction projects pending as of December 31, 2015 (dollars in thousands):

Location	Square Feet		Commitment		Balance	Est. Completion
Bel Air, MD	99,184	$	26,386	$	18,153	1Q16
Richmond, TX	36,475		11,670		7,277	1Q16
Stamford, CT	92,345		41,735		9,886	3Q16
Missouri, TX	23,863		9,180		2,252	3Q16
Wausau, WI	43,883		14,100		3,183	1Q17
Brooklyn, NY	140,955		103,624		19,808	1Q17
Timmonium, MD	46,000		20,996		8,601	2Q17
Total	482,705	$	227,691	$	69,160

     Total interest expense represents secured debt interest expense offset by interest. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The following is a summary of our outpatient medical secured debt principal activity (dollars in thousands):

	Year Ended			Year Ended			Year Ended
	December 31, 2013			December 31, 2014			December 31, 2015
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	713,720	5.950%	$	700,427	5.999%	$	609,268	5.838%
Debt assumed		52,574	6.126%		66,113	3.670%		120,959	2.113%
Debt extinguished		(49,017)	5.357%		(141,796)	5.567%		(88,182)	5.257%
Principal payments		(16,850)	6.193%		(15,476)	5.797%		(14,356)	5.975%
Ending balance	$	700,427	5.999%	$	609,268	5.838%	$	627,689	5.177%
Monthly averages	$	708,107	5.956%	$	626,797	5.928%	$	613,155	5.434%

The increase in other income is primarily attributable to the acquisition of a controlling interest in a portfolio of properties that were historically reported as unconsolidated property investments. The increases in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions of new outpatient medical facilities for which we incur certain property operating expenses. Transaction costs represent costs incurred with property acquisitions including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships, a lease termination expense and other similar costs.  The fluctuations in transaction costs are primarily due to acquisition volumes in the relevant years. Income from unconsolidated entities represents our share of net income or losses related to the periods for which we held a joint venture investment with Forest City Enterprises and certain unconsolidated property investments. Changes in gains/losses on sales of properties are related to volume of property sales and the sales prices. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at December 31, 2013 as discontinued operations for the periods presented (dollars in thousands):

		Year Ended December 31,
		2013		2014		2015
Rental income		$	9,390	$	-	$	-
Expenses:
	Interest expense		1,681		-		-
	Property operating expenses		3,396		-		-
	Provision for depreciation		2,855		-		-
Income (loss) from discontinued operations, net		$	1,458	$	-	$	-

     A portion of our outpatient medical properties were formed through partnerships. Net income attributable to noncontrolling interests represents our partners’ share of net income or loss relating to those partnerships where we are the controlling partner.

63

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

 Non-Segment/Corporate

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

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2013		2014		$		%	2015		$		%	$		%
Revenues:
	Other income	$	296	$	677	$	381	129%	$	1,091	$	414	61%	$	795	269%
Expenses:
	Interest expense		306,067		296,576		(9,491)	-3%		285,227		(11,349)	-4%		(20,840)	-7%
	General and administrative		108,318		142,943		34,625	32%		147,416		4,473	3%		39,098	36%
	Loss (gain) on extinguishments of debt, net		2,423		8,672		6,249	258%		24,777		16,105	186%		22,354	923%
	Other expenses		-		-		-	n/a		10,583		10,583	n/a		10,583	n/a
			416,808		448,191		31,383	8%		468,003		19,812	4%		51,195	12%
Loss from continuing operations before income taxes			(416,512)		(447,514)		(31,002)	7%		(466,912)		(19,398)	4%		(50,400)	12%
Income tax expense			(67)		-		67	-100%		(3,438)		(3,438)	n/a		(3,371)	5031%
Net loss			(416,579)		(447,514)		(30,935)	7%		(470,350)		(22,836)	5%		(53,771)	13%
Preferred stock dividends			66,336		65,408		(928)	-1%		65,406		(2)	0%		(930)	-1%
Net loss attributable to common stockholders		$	(482,915)	$	(512,922)	$	(30,007)	6%	$	(535,756)	$	(22,834)	4%	$	(52,841)	11%

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

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2013		2014		$		%	2015		$		%	$		%
Senior unsecured notes	$	279,617	$	280,037	$	420	0%	$	267,609	$	(12,428)	-4%	$	(12,008)	-4%
Secured debt		495		460		(35)	-7%		357		(103)	-22%		(138)	-28%
Primary unsecured credit facility		15,498		8,914		(6,584)	-42%		10,812		1,898	21%		(4,686)	-30%
Capitalized interest		(6,700)		(7,150)		(450)	7%		(6,379)		771	-11%		321	-5%
Interest SWAP savings		(14)		(14)		-	0%		(28)		(14)	100%		(14)	100%
Loan expense		17,171		14,329		(2,842)	-17%		12,856		(1,473)	-10%		(4,315)	-25%
Totals	$	306,067	$	296,576	$	(9,491)	-3%	$	285,227	$	(11,349)	-4%	$	(20,840)	-7%

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, excluding our foreign unsecured debt, which is in our seniors housing operating segment.  Please refer to Note 10 to our consolidated financial statements for additional information.  We capitalize certain interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balances outstanding during the construction period using the rate of interest that approximates our cost of financing. Our interest expense is reduced by the amount capitalized.  The change in capitalized interest is due to both changes in construction fundings and in our weighted-average cost of financing.  Loan expense represents the amortization of deferred loan costs incurred in connection with the issuance and amendments of debt. Loan expense changes are due to amortization of charges for costs incurred in connection with senior unsecured note issuances.  The change in interest expense on our primary unsecured credit facility is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes.  Please refer to Note 9 of our consolidated financial statements for additional information regarding our primary unsecured credit facility.

     General and administrative expenses for 2014 included $19,688,000 of CEO transition costs.  Excluding these costs, general and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2015, 2014 and 2013 were 3.82%, 3.69% and 3.74%, respectively.  The increases in general and administrative expenses, excluding the CEO transition costs, are primarily related to costs associated with our initiatives to attract and retain appropriate personnel to achieve our business objectives. The loss on extinguishment of debt in the current year is primarily due to the early extinguishment of the 2016 senior unsecured notes.  Other expenses in the current year are due to costs associated with the retirement of an executive officer and the termination of our investment in a strategic outpatient medical partnership.

64

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

Other

Non-GAAP Financial Measures

     We believe that net income attributable to common stockholders, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider FFO to be a useful supplemental measure of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests.

     Net operating income from continuing operations (“NOI”) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses.  Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our seniors housing operating and outpatient medical properties.  These expenses include, but are not limited to, property-related payroll and benefits, property management fees, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance.  General and administrative expenses represent costs unrelated to property operations or transaction costs.  These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets.  Same store cash NOI (“SSCNOI”) is used to evaluate the cash-based operating performance of our properties under a consistent population which eliminates changes in the composition of our portfolio.  As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the full three year reporting period.  Any properties acquired, developed, transitioned or classified in discontinued operations during that period are excluded from the same store amounts.  We believe NOI and SSCNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSCNOI to make decisions about resource allocations and to assess the property level performance of our properties.

     EBITDA stands for earnings before interest, taxes, depreciation and amortization. We believe that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of our operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred dividends. 

     A covenant in our primary unsecured credit facility contains a financial ratio based on a definition of EBITDA that is specific to that agreement. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted EBITDA, which represents EBITDA as defined above and adjusted for stock-based compensation expense, provision for loan losses and gain/loss on extinguishment of debt. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge coverage ratio of at least 1.50 times.

     Other than Adjusted EBITDA, our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. Adjusted EBITDA is used solely to determine our compliance with a financial covenant in our primary unsecured credit facility and is not being presented for use by investors for any other purpose. None of our supplemental measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.

65

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

     The table below reflects the reconciliation of FFO to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented. The provisions for depreciation and amortization include provisions for depreciation and amortization from discontinued operations. Noncontrolling interest and unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization.  Amounts are in thousands except for per share data.

		Year Ended December 31,
FFO Reconciliation:		2013		2014		2015
Net income attributable to common stockholders		$	78,714	$	446,745	$	818,344
Depreciation and amortization			873,960		844,130		826,240
Impairment of assets			-		-		2,220
Loss (gain) on sales of properties			(49,138)		(153,522)		(280,387)
Noncontrolling interests			(36,304)		(37,852)		(39,271)
Unconsolidated entities			57,652		74,580		82,494
Funds from operations		$	924,884	$	1,174,081	$	1,409,640
Average common shares outstanding:
	Basic		276,929		306,272		348,240
	Diluted		278,761		307,747		349,424
Per share data:
Net income attributable to common stockholders
	Basic	$	0.28	$	1.46	$	2.35
	Diluted		0.28		1.45		2.34
Funds from operations
	Basic	$	3.34	$	3.83	$	4.05
	Diluted		3.32		3.82		4.03

     The table below reflects the reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented. Interest expense and the provisions for depreciation and amortization include discontinued operations. Dollars are in thousands.

		Year Ended December 31,
Adjusted EBITDA Reconciliation:		2013		2014		2015
Net income		$	138,280	$	512,300	$	888,549
Interest expense			462,606		481,196		492,169
Income tax expense (benefit), net			7,491		(1,267)		6,451
Depreciation and amortization			873,960		844,130		826,240
Stock-based compensation expense			20,177		32,075		30,844
Provision for loan losses			2,110		-		-
Loss (gain) on extinguishment of debt, net			(909)		9,558		34,677
Adjusted EBITDA		$	1,503,715	$	1,877,992	$	2,278,930
Adjusted Interest Coverage Ratio:
Interest expense		$	462,606	$	481,196	$	492,169
Capitalized interest			6,700		7,150		8,670
Non-cash interest expense			(4,044)		(2,427)		(2,586)
	Total interest		465,262		485,919		498,253
Adjusted EBITDA		$	1,503,715	$	1,877,992	$	2,278,930
	Adjusted interest coverage ratio		3.23x		3.86x		4.57x
Adjusted Fixed Charge Coverage Ratio:
Interest expense		$	462,606	$	481,196	$	492,169
Capitalized interest			6,700		7,150		8,670
Non-cash interest expense			(4,044)		(2,427)		(2,586)
Secured debt principal payments			56,205		62,280		67,064
Preferred dividends			66,336		65,408		65,406
	Total fixed charges		587,803		613,607		630,723
Adjusted EBITDA		$	1,503,715	$	1,877,992	$	2,278,930
	Adjusted fixed charge coverage ratio		2.56x		3.06x		3.61x

66

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

     The following tables reflect the reconciliation of NOI and SSCNOI to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented.  Amounts are in thousands.

			Year Ended December 31,
NOI Reconciliation:			2013		2014		2015
Total revenues:
	Triple-net		$	895,856	$	1,027,866	$	1,200,301
	Seniors housing operating			1,617,402		1,897,571		2,168,271
	Outpatient medical			367,054		417,432		490,163
	Non-segment/corporate			296		677		1,091
		Total revenues		2,880,608		3,343,546		3,859,826
Property operating expenses:
	Triple-net			1,235		732		-
	Seniors housing operating			1,089,239		1,266,308		1,467,009
	Outpatient medical			116,339		136,318		155,248
		Total property operating expenses		1,206,813		1,403,358		1,622,257
Net operating income:
	Triple-net			894,621		1,027,134		1,200,301
	Seniors housing operating			528,163		631,263		701,262
	Outpatient medical			250,715		281,114		334,915
	Non-segment/corporate			296		677		1,091
		Net operating income from continuing operations		1,673,795		1,940,188		2,237,569
Reconciling items:
	Interest expense			(458,360)		(481,039)		(492,169)
	Loss (gain) on derivatives, net			(4,470)		1,495		58,427
	Depreciation and amortization			(865,800)		(844,130)		(826,240)
	General and administrative			(108,318)		(142,943)		(147,416)
	Transaction costs			(133,401)		(69,538)		(110,926)
	Loss (gain) on extinguishment of debt, net			909		(9,558)		(34,677)
	Impairment of assets			-		-		(2,220)
	Other expenses			-		(10,262)		(46,231)
	Provision for loan losses			(2,110)		-		-
	Income tax benefit (expense)			(7,491)		1,267		(6,451)
	Income (loss) from unconsolidated entities			(8,187)		(27,426)		(21,504)
	Income (loss) from discontinued operations, net			51,713		7,135		-
	Gain (loss) on real estate dispositions, net			-		147,111		280,387
	Preferred dividends			(66,336)		(65,408)		(65,406)
	Loss (income) attributable to noncontrolling interests			6,770		(147)		(4,799)
				(1,595,081)		(1,493,443)		(1,419,225)
Net income (loss) attributable to common stockholders			$	78,714	$	446,745	$	818,344

67

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

				Year Ended December 31,
Same Store Cash NOI Reconciliation:				2013		2014		2015
Net operating income from continuing operations:
	Triple-net			$	894,621	$	1,027,134	$	1,200,301
	Seniors housing operating				528,163		631,263		701,262
	Outpatient medical				250,715		281,114		334,915
			Total		1,673,499		1,939,511		2,236,478
Adjustments:
	Triple-net:
		Non-cash NOI on same store properties			(37,153)		(55,531)		(72,666)
		NOI attributable to non same store properties			(185,859)		(280,662)		(414,829)
			Subtotal		(223,012)		(336,193)		(487,495)
	Seniors housing operating:
		NOI attributable to non same store properties			(275,361)		(356,886)		(433,831)
			Subtotal		(275,361)		(356,886)		(433,831)
	Outpatient medical:
		Non-cash NOI on same store properties			(8,436)		(7,494)		(6,097)
		NOI attributable to non same store properties			(21,061)		(46,693)		(95,303)
			Subtotal		(29,497)		(54,187)		(101,400)
			Total		(527,870)		(747,266)		(1,022,726)
Same store cash net operating income:
	Triple-net				671,609		690,941		712,806
	Seniors housing operating				252,802		274,377		267,431
	Outpatient medical				221,218		226,927		233,515
			Total	$	1,145,629	$	1,192,245	$	1,213,752
Same Store Cash NOI Property Reconciliation:
	Total properties				1,426
	Acquisitions				(532)
	Developments				(44)
	Disposals/Held-for-sale				(17)
	Segment transitions				(39)
	Other(1)				(18)
		Same store properties			776
(1) Includes eleven land parcels, three loans and four previously unconsolidated properties in which we purchased the majority interest during the year.

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

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions.  Management considers accounting estimates or assumptions critical if:

·the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

·the impact of the estimates and assumptions on financial condition or operating performance is material.

Management has discussed the development and selection of its critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the disclosure presented below relating to them.  Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future.  However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change.  If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition.  Please refer to Note 2 to our consolidated financial statements for further information on significant accounting policies that impact us and for the impact of new accounting standards.  There were no accounting pronouncements that were issued, but not yet adopted by us, that we believe will materially impact our consolidated financial statements.

The following table presents information about our critical accounting policies, as well as the material assumptions used to develop each estimate:

Nature of Critical Accounting Estimate		Assumptions/Approach Used
Principles of Consolidation The consolidated financial statements include our accounts, the accounts of our wholly-owned subsidiaries and the accounts of joint venture entities in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests.  In addition, we consolidate those entities deemed to be variable interest entities (VIEs) in which we are determined to be the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation.	We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We make judgments with respect to our level of influence or control of an entity and whether we are (or are not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, our ability to direct the activities that most significantly impact the entity's economic performance, our form of ownership interest, our representation on the entity's governing body, the size and seniority of our investment, our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity, if applicable. Our ability to correctly assess our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. If we perform a primary beneficiary analysis at a date other than at inception of the variable interest entity, our assumptions may be different and may result in the identification of a different primary beneficiary.
Income Taxes As part of the process of preparing our consolidated financial statements, significant management judgment is required to evaluate our compliance with REIT requirements.	Our determinations are based on interpretation of tax laws, and our conclusions may have an impact on the income tax expense recognized. Adjustments to income tax expense may be required as a result of: (i) audits conducted by federal and state tax authorities, (ii) our ability to qualify as a REIT, (iii) the potential for built-in-gain recognized related to prior-tax-free acquisitions of C corporations and (iv) changes in tax laws. Adjustments required in any given period are included in income.

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

Nature of Critical Accounting Estimate	Assumptions/Approach Used
Business Combinations Real property developed by us is recorded at cost, including the capitalization of construction period interest. The cost of real property acquired is allocated to net tangible and identifiable intangible assets based on their respective fair values. Tangible assets primarily consist of land, buildings and improvements. The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value of in-place leases. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.	We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our allocations are typically the allocation of fair value to the buildings as-if-vacant, land and in-place leases. In the case of the fair value of buildings and the allocation of value to land and other intangibles, our estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make our best estimates based on our evaluation of the specific characteristics of each tenant's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. We compute depreciation and amortization on our properties using the straight-line method based on their estimated useful lives which range from 15 to 40 years for buildings and five to 15 years for improvements. Amortization periods for intangibles are based on the remaining life of the lease.
Allowance for Loan Losses We maintain an allowance for loan losses in accordance with U.S. GAAP.  The allowance for loan losses is maintained at a level believed adequate to absorb potential losses in our loans receivable.  The determination of the allowance is based on a quarterly evaluation of all outstanding loans.  If this evaluation indicates that there is a greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required.  A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement.  Consistent with this definition, all loans on non-accrual are deemed impaired.  To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status.		The determination of the allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments and principal. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying property.
Fair Value of Derivative Instruments The valuation of derivative instruments is accounted for in accordance with U.S. GAAP, which requires companies to record derivatives at fair market value on the balance sheet as assets or liabilities.		The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our forward exchange contracts are estimated using pricing models that consider forward currency spot rates, forward trade rates and discount rates.  Fair values of our interest rate swaps are estimated by utilizing pricing models that consider forward yield curves, discount rates and counterparty credit risk. Such amounts and their recognition are subject to significant estimates which may change in the future.

70

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

Nature of Critical Accounting Estimate	Assumptions/Approach Used
Revenue Recognition Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. If the collectability of revenue is determined incorrectly, the amount and timing of our reported revenue could be significantly affected. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain fixed and/or contingent escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.  We recognize resident fees and services, other than move-in fees, monthly as services are provided.  Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.	We evaluate the collectability of our revenues and related receivables on an on-going basis. We evaluate collectability based on assumptions and other considerations including, but not limited to, the certainty of payment, payment history, the financial strength of the investment’s underlying operations as measured by cash flows and payment coverages, the value of the underlying collateral and guaranties and current economic conditions. If our evaluation indicates that collectability is not reasonably assured, we may place an investment on non-accrual or reserve against all or a portion of current income as an offset to revenue.
Impairment of Long-Lived Assets We review our long-lived assets for potential impairment in accordance with U.S. GAAP. An impairment charge must be recognized when the carrying value of a long-lived asset is not recoverable.  The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.  If it is determined that a permanent impairment of a long-lived asset has occurred, the carrying value of the asset is reduced to its fair value and an impairment charge is recognized for the difference between the carrying value and the fair value.	The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if there are indicators of impairment.  These indicators may include anticipated operating losses at the property level, the tenant’s inability to make rent payments, a decision to dispose of an asset before the end of its estimated useful life and changes in the market that may permanently reduce the value of the property.  If indicators of impairment exist, then the undiscounted future cash flows from the most likely use of the property are compared to the current net book value.  This analysis requires us to determine if indicators of impairment exist and to estimate the most likely stream of cash flows to be generated from the property during the period the property is expected to be held.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

     We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures.  We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates. For additional information, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” and Notes 11 and 16 to our consolidated financial statements.

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

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

	December 31, 2015				December 31, 2014
	Principal balance		Fair value change		Principal balance		Fair value change
Senior unsecured notes	$	7,965,107	$	(519,901)	$	7,101,655	$	(547,358)
Secured debt		2,757,123		(91,376)		2,673,480		(93,580)
Totals	$	10,722,230	$	(611,277)	$	9,775,135	$	(640,938)

     Our variable rate debt, including our unsecured line of credit arrangements, is reflected at fair value. At December 31, 2015, we had $2,236,733,000 outstanding related to our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased annual interest expense of $22,367,000. At December 31, 2014, we had $983,783,000 outstanding related to our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have resulted in increased annual interest expense of $9,838,000.

     We are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of the Canadian Dollar or Pounds Sterling relative to the U.S. Dollar impacts the amount of net income we earn from our investments in Canada and the United Kingdom. Based solely on our results for the twelve months ended December 31, 2015, if these exchange rates were to increase or decrease by 100 basis points, our net income from these investments would decrease or increase, as applicable, by less than $1,000,000 for the twelve-month period.  We seek to mitigate these underlying foreign currency exposures with non-U.S. denominated borrowings and gains and losses on derivative contracts hedging these exposures.  If we increase our international presence through investments in, or acquisitions or development of, seniors housing and health care properties outside the United States, we may also decide to transact additional business or borrow funds in currencies other than the U.S. Dollar, Canadian Dollars or Pounds Sterling. To illustrate the impact of changes in foreign currency markets, we performed a sensitivity analysis on our derivative portfolio whereby we modeled the change in net present values arising from a hypothetical 1% increase in foreign currency exchange rates to determine the instruments’ change in fair value.  The following table summarizes the results of the analysis performed, excluding cross currency hedge activity (dollars in thousands):

	December 31, 2015				December 31, 2014
	Carrying value		Fair value change		Carrying value		Fair value change
Foreign currency exchange contracts	$	117,452	$	1,915	$	54,247	$	4,242
Debt designated as hedges		1,728,979		13,000		1,851,189		13,000
Totals	$	1,846,431	$	14,915	$	1,905,436	$	17,242

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Item 8.  Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Welltower Inc.

     We have audited the accompanying consolidated balance sheets of Welltower Inc. as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Welltower Inc. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

     As discussed in Note 2 to the consolidated financial statements, the Company changed its presentation of debt issuance costs as a result of the adoption of the amendments to the FASB Accounting Standards Codification resulting from Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Welltower Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 18, 2016 expressed an unqualified opinion thereon.

                                    /s/  Ernst & Young LLP

Toledo, Ohio

February 18, 2016

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CONSOLIDATED BALANCE SHEETS

WELLTOWER, INC. AND SUBSIDIARIES

				December 31,		December 31,
				2015		2014
Assets				(In thousands)
Real estate investments:
	Real property owned:
		Land and land improvements		$	2,563,445	$	2,046,541
		Buildings and improvements			25,522,542		21,799,313
		Acquired lease intangibles			1,350,585		1,135,936
		Real property held for sale, net of accumulated depreciation			169,950		323,818
		Construction in progress			258,968		186,327
			Gross real property owned		29,865,490		25,491,935
		Less accumulated depreciation and amortization			(3,796,297)		(3,020,908)
			Net real property owned		26,069,193		22,471,027
		Real estate loans receivable			819,492		380,169
	Net real estate investments				26,888,685		22,851,196
Other assets:
		Investments in unconsolidated entities			542,281		744,151
		Goodwill			68,321		68,321
		Cash and cash equivalents			360,908		473,726
		Restricted cash			61,782		79,697
		Straight-line receivable			395,562		279,806
		Receivables and other assets			706,306		466,026
			Total other assets		2,135,160		2,111,727
Total assets				$	29,023,845	$	24,962,923
Liabilities and equity
Liabilities:
		Borrowings under primary unsecured credit facility		$	835,000	$	-
		Senior unsecured notes			8,548,055		7,729,405
		Secured debt			3,509,142		2,963,186
		Capital lease obligations			75,489		84,049
		Accrued expenses and other liabilities			697,191		626,825
Total liabilities					13,664,877		11,403,465
Redeemable noncontrolling interests					183,083		86,409
Equity:
		Preferred stock			1,006,250		1,006,250
		Common stock			354,811		328,835
		Capital in excess of par value			16,478,300		14,740,712
		Treasury stock			(44,372)		(35,241)
		Cumulative net income			3,725,772		2,842,022
		Cumulative dividends			(6,846,056)		(5,635,923)
		Accumulated other comprehensive income (loss)			(88,243)		(77,009)
		Other equity			4,098		5,507
			Total Welltower Inc. stockholders’ equity		14,590,560		13,175,153
		Noncontrolling interests			585,325		297,896
Total equity					15,175,885		13,473,049
Total liabilities and equity				$	29,023,845	$	24,962,923

See accompanying notes

74

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

WELLTOWER INC. AND SUBSIDIARIES

(In thousands, except per share data)

			Year Ended December 31,
			2015		2014		2013
Revenues:
	Rental income		$	1,598,948	$	1,405,767	$	1,227,589
	Resident fees and services			2,158,031		1,892,237		1,616,290
	Interest income			84,141		37,667		32,663
	Other income			18,706		7,875		4,066
		Total revenues		3,859,826		3,343,546		2,880,608
Expenses:
	Interest expense			492,169		481,039		458,360
	Property operating expenses			1,622,257		1,403,358		1,206,813
	Depreciation and amortization			826,240		844,130		865,800
	General and administrative			147,416		142,943		108,318
	Transaction costs			110,926		69,538		133,401
	Loss (gain) on derivatives, net			(58,427)		(1,495)		4,470
	Loss (gain) on extinguishment of debt, net			34,677		9,558		(909)
	Provision for loan losses			-		-		2,110
	Impairment of assets			2,220		-		-
	Other expenses			46,231		10,262		-
		Total expenses		3,223,709		2,959,333		2,778,363
Income from continuing operations before income taxes
	and income from unconsolidated entities			636,117		384,213		102,245
Income tax (expense) benefit				(6,451)		1,267		(7,491)
Income (loss) from unconsolidated entities				(21,504)		(27,426)		(8,187)
Income from continuing operations				608,162		358,054		86,567
Discontinued operations:
	Gain (loss) on sales of properties, net			-		6,411		49,138
	Income (loss) from discontinued operations, net			-		724		2,575
		Discontinued operations, net		-		7,135		51,713
Gain (loss) on real estate dispositions, net				280,387		147,111		-
Net income				888,549		512,300		138,280
Less:  Preferred stock dividends				65,406		65,408		66,336
Less:  Net income (loss) attributable to noncontrolling interests(1)				4,799		147		(6,770)
Net income attributable to common stockholders			$	818,344	$	446,745	$	78,714
Average number of common shares outstanding:
	Basic			348,240		306,272		276,929
	Diluted			349,424		307,747		278,761
Earnings per share:
	Basic:
	Income from continuing operations attributable to common
		stockholders, including real estate dispositions	$	2.35	$	1.44	$	0.10
	Discontinued operations, net			-		0.02		0.19
	Net income attributable to common stockholders*		$	2.35	$	1.46	$	0.28
	Diluted:
	Income from continuing operations attributable to common
		stockholders, including real estate dispositions	$	2.34	$	1.43	$	0.10
	Discontinued operations, net			-		0.02		0.19
	Net income attributable to common stockholders*		$	2.34	$	1.45	$	0.28

* Amounts may not sum due to rounding

(1) Includes amounts attributable to redeemable noncontrolling interests

See accompanying notes

75

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

		Year Ended December 31,
		2015		2014		2013
Net income		$	888,549	$	512,300	$	138,280
Other comprehensive income (loss):
	Unrecognized gain/(loss) on equity investments		-		389		(173)
	Unrecognized gain/(loss) on cash flow hedges		(766)		4,409		1,898
	Unrecognized actuarial gain/(loss)		246		(137)		1,522
	Foreign currency translation gain/(loss)		(46,679)		(71,964)		(23,247)
Total other comprehensive income (loss)			(47,199)		(67,303)		(20,000)
Total comprehensive income			841,350		444,997		118,280
Total comprehensive income attributable to noncontrolling interests(1)			(31,166)		(14,678)		(13,267)
Total comprehensive income attributable to stockholders		$	810,184	$	430,319	$	105,013
(1) Includes amounts attributable to redeemable noncontrolling interests.

See accompanying notes

76

CONSOLIDATED STATEMENTS OF EQUITY

WELLTOWER INC. AND SUBSIDIARIES

(in thousands)														Accumulated
						Capital in								Other
		Preferred		Common		Excess of		Treasury		Cumulative		Cumulative		Comprehensive		Other		Noncontrolling
		Stock		Stock		Par Value		Stock		Net Income		Dividends		Income		Equity		Interests		Total
Balances at December 31, 2012		$	1,022,917	$	260,396	$	10,543,690	$	(17,875)	$	2,184,819	$	(3,694,579)	$	(11,028)	$	6,461	$	225,718	$	10,520,519
Comprehensive income:
	Net income										145,050								(5,487)		139,563
	Other comprehensive income:														(13,503)				(6,497)		(20,000)
Total comprehensive income																					119,563
Net change in noncontrolling interests					1,109		23,815												128,014		152,938
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				3,852		239,837		(3,388)								(1,555)				238,746
Net proceeds from sale of common stock					23,000		1,607,281														1,630,281
Net proceeds from sale of preferred stock
Equity component of convertible debt					988		(1,543)														(555)
Equity consideration in business combinations
Proceeds from issuance of preferred shares
Redemption of preferred stock
Conversion of preferred stock			(5,556)		116		5,440														-
Option compensation expense																	1,114				1,114
Cash dividends paid:
	Common stock cash dividends												(839,939)								(839,939)
	Preferred stock cash dividends												(66,336)								(66,336)
Balances at December 31, 2013			1,017,361		289,461		12,418,520		(21,263)		2,329,869		(4,600,854)		(24,531)		6,020		341,748		11,756,331
Comprehensive income:
	Net income										512,153								(342)		511,811
	Other comprehensive income:														(52,478)				(14,825)		(67,303)
Total comprehensive income																					444,508
Net change in noncontrolling interests							(17,653)												(28,685)		(46,338)
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				4,958		297,975		(13,978)								(1,425)				287,530
Net proceeds from sale of common stock					33,925		2,030,057														2,063,982
Equity component of convertible debt					258		935														1,193
Equity consideration in business combinations
Proceeds from issuance of preferred shares
Redemption of preferred stock
Conversion of preferred stock			(11,111)		233		10,878														-
Option compensation expense																	912				912
Cash dividends paid:
	Common stock cash dividends												(969,661)								(969,661)
	Preferred stock cash dividends												(65,408)								(65,408)
Balances at December 31, 2014			1,006,250		328,835		14,740,712		(35,241)		2,842,022		(5,635,923)		(77,009)		5,507		297,896		13,473,049
Comprehensive income:
	Net income										883,750								4,878		888,628
	Other comprehensive income:														(11,234)				(35,965)		(47,199)
Total comprehensive income																					841,429
Net change in noncontrolling interests							(23,077)												318,516		295,439
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				4,400		305,022		(9,131)								(2,107)				298,184
Net proceeds from sale of common stock					20,246		1,450,212														1,470,458
Equity component of convertible debt					1,330		5,431														6,761
Option compensation expense																	698				698
Cash dividends paid:
	Common stock cash dividends												(1,144,727)								(1,144,727)
	Preferred stock cash dividends												(65,406)								(65,406)
Balances at December 31, 2015		$	1,006,250	$	354,811	$	16,478,300	$	(44,372)	$	3,725,772	$	(6,846,056)	$	(88,243)	$	4,098	$	585,325	$	15,175,885

See accompanying notes

77

CONSOLIDATED STATEMENTS OF CASH FLOWS

WELLTOWER INC. AND SUBSIDIARIES

			Year Ended December 31,
(In thousands)			2015		2014		2013
Operating activities
Net income			$	888,549	$	512,300	$	138,280
Adjustments to reconcile net income to
	net cash provided from (used in) operating activities:
		Depreciation and amortization		826,240		844,130		873,960
		Other amortization expenses		4,991		6,971		8,097
		Provision for loan losses		-		-		2,110
		Impairment of assets		2,220		-		-
		Stock-based compensation expense		30,844		32,075		20,177
		Loss (gain) on derivatives, net		(58,427)		(1,495)		4,470
		Loss (gain) on extinguishment of debt, net		34,677		9,558		(909)
		Loss (income) from unconsolidated entities		21,504		27,426		8,187
		Rental income in excess of cash received		(115,756)		(74,552)		(46,068)
		Amortization related to above (below) market leases, net		4,018		739		460
		Loss (gain) on sales of properties, net		(280,387)		(153,522)		(49,138)
		Other (income) expense, net		31,979		-		-
		Distributions by unconsolidated entities		637		9,060		8,885
		Increase (decrease) in accrued expenses and other liabilities		(18,099)		(48,381)		67,557
		Decrease (increase) in receivables and other assets		478		(25,639)		(47,571)
Net cash provided from (used in) operating activities				1,373,468		1,138,670		988,497
Investing activities
	Cash disbursed for acquisitions			(3,364,891)		(2,210,600)		(3,597,955)
	Cash disbursed for capital improvements to existing properties			(187,752)		(132,780)		(135,832)
	Cash disbursed for construction in progress			(244,561)		(197,881)		(247,560)
	Capitalized interest			(8,670)		(7,150)		(6,700)
	Investment in real estate loans receivable			(598,722)		(202,207)		(117,059)
	Other investments, net of payments			(141,994)		(100,033)		(15,634)
	Principal collected on real estate loans receivable			131,830		105,496		102,886
	Contributions to unconsolidated entities			(160,323)		(353,496)		(99,769)
	Distributions by unconsolidated entities			130,880		57,183		30,853
	Proceeds from (payments on) derivatives			106,360		10,269		(6,803)
	Decrease (increase) in restricted cash			29,719		(6,072)		79,957
	Proceeds from sales of real property			823,964		911,065		482,023
Net cash provided from (used in) investing activities				(3,484,160)		(2,126,206)		(3,531,593)
Financing activities
	Net increase (decrease) under unsecured lines of credit arrangements			835,000		(130,000)		130,000
	Proceeds from issuance of senior unsecured notes			1,451,434		773,992		1,756,192
	Payments to extinguish senior unsecured notes			(558,830)		(365,188)		(517,625)
	Net proceeds from the issuance of secured debt			228,685		109,503		89,208
	Payments on secured debt			(573,390)		(341,839)		(674,103)
	Net proceeds from the issuance of common stock			1,755,722		2,343,868		1,854,637
	Decrease (increase) in deferred loan expenses			(11,513)		(16,782)		(13,503)
	Contributions by noncontrolling interests(1)			173,018		9,962		5,072
	Distributions to noncontrolling interests(1)			(50,877)		(43,691)		(35,592)
	Acquisitions of noncontrolling interests			(5,663)		(1,175)		(23,247)
	Cash distributions to stockholders			(1,210,133)		(1,035,069)		(906,275)
	Other financing activities			(27,004)		(409)		2,906
Net cash provided from (used in) financing activities				2,006,449		1,303,172		1,667,670
Effect of foreign currency translation on cash and cash equivalents				(8,575)		(690)		442
Increase (decrease) in cash and cash equivalents				(112,818)		314,946		(874,984)
Cash and cash equivalents at beginning of period				473,726		158,780		1,033,764
Cash and cash equivalents at end of period			$	360,908	$	473,726	$	158,780
Supplemental cash flow information:
	Interest paid		$	492,771	$	504,165	$	447,108
	Income taxes paid			12,214		18,548		12,110

(1)Includes amounts attributable to redeemable noncontrolling interests.

See accompanying notes.

78

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business

     Welltower Inc. (formerly Health Care REIT, Inc.), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure.  The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  Welltower^TM, a real estate investment trust (“REIT”), owns 1,482 properties in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.  Founded in 1970, we were the first REIT to invest exclusively in health care facilities.

2. Accounting Policies and Related Matters

Principles of Consolidation

     The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture (“JV”) entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation. At inception of JV transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary.  Accounting Standards Codification Topic 810, Consolidations (“ASC 810”), requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance. For investments in JVs, we evaluate the type of rights held by the limited partner(s), which may preclude consolidation in circumstances in which the sole general partner would otherwise consolidate the limited partnership. The assessment of limited partners’ rights and their impact on the presumption of control over a limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership in the limited partnership, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.

Use of Estimates

     The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

     Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.  Leases in our outpatient medical portfolio typically include some form of operating expense reimbursement by the tenant.  Certain payments made to operators are treated as lease incentives and amortized as a reduction of revenue over the lease term.  We recognize resident fees and services, other than move-in fees, monthly as services are provided.  Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.

Cash and Cash Equivalents

     Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months or less.

Restricted Cash

     Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate taxes, insurance, tenant and capital improvements and amounts held in escrow relating to acquisitions we are entitled to receive over a period of time as outlined in the escrow agreement.

Deferred Loan Expenses

     Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt

79

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

arrangements. We amortize these costs over the term of the debt using the straight-line method, which approximates the effective interest method.

Investments in Unconsolidated Entities

     Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting.  Under the equity method, our share of the investee’s earnings or losses is included in our consolidated results of operations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity.  The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.

Marketable Securities

     We classify marketable securities as available-for-sale.  These securities are carried at their fair value with unrealized gains and losses recognized in stockholders’ equity as a component of accumulated other comprehensive income (loss).  When we determine declines in fair value of marketable securities are other-than-temporary, a loss is recognized in earnings.

Redeemable Noncontrolling Interests

     Certain noncontrolling interests are redeemable at fair value.  Accordingly, we record the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss and dividends or (ii) the redemption value.  If it is probable that the interests will be redeemed in the future, we accrete the carrying value to the redemption value over the period until expected redemption, currently a weighted-average period of approximately four years.  In accordance with ASC 810, the redeemable noncontrolling interests are classified outside of permanent equity, as a mezzanine item, in the balance sheet.  At December 31, 2015, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $183,083,000 by $116,000,000.

     During 2014 and 2015, we entered into DownREIT partnerships which give a real estate seller the ability to exchange its property on a tax deferred basis for equity membership interests (“OP units”).  The OP units may be redeemed any time following the first anniversary of the date of issuance at the election of the holders for one share of our common stock per unit or, at our option, cash.

Real Property Owned

     Real property developed by us is recorded at cost, including the capitalization of construction period interest. Expenditures for repairs and maintenance are expensed as incurred.  Property acquisitions are accounted for as business combinations where we measure the assets acquired, liabilities (including assumed debt and contingencies) and any noncontrolling interests at their fair values on the acquisition date.  The cost of real property acquired, which represents substantially all of the purchase price, is allocated to net tangible and identifiable intangible assets based on their respective fair values. These properties are depreciated on a straight-line basis over their estimated useful lives which range from 15 to 40 years for buildings and 5 to 15 years for improvements. Tangible assets primarily consist of land, buildings and improvements, including those related to capital leases.  We consider costs incurred in conjunction with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of productive assets and, accordingly, such costs are reflected as investment activities in our statement of cash flows.

     The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value associated with the presence of in-place tenants or residents.  The value allocable to the above or below market component of the acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in acquired lease intangibles and below market leases are included in other liabilities in the balance sheet and are amortized to rental income over the remaining terms of the respective leases.

     The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values for in-place tenants based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors.  The total amount of other intangible assets acquired is further allocated to in-place lease values for in-place residents with such value representing (i) value associated with lost revenue related to

80

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

tenant reimbursable operating costs that would be incurred in an assumed re-leasing period, and (ii) value associated with lost rental revenue from existing leases during an assumed re-leasing period.  This intangible asset will be amortized over the remaining life of the lease.

     The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be changed. We consider external factors relating to each asset and the existence of a master lease which may link the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and the projected undiscounted cash flows of the asset over the remaining depreciation period indicate that the asset will not be recoverable, the carrying value is reduced to the estimated fair market value.  In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.

Capitalization of Construction Period Interest

     We capitalize interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balance outstanding during the construction period using the rate of interest which approximates our cost of financing. We capitalize interest costs related to construction of real property owned by us. Our interest expense reflected in the consolidated statements of comprehensive income has been reduced by the amounts capitalized.

Gain on Sale of Assets

     We recognize sales of assets only upon the closing of the transaction with the purchaser. Payments received from purchasers prior to closing are recorded as deposits and classified as other assets on our consolidated balance sheets. Gains on assets sold are recognized using the full accrual method upon closing when (i) the collectability of the sales price is reasonably assured, (ii) we are not obligated to perform significant activities after the sale to earn the profit, (iii) we have received adequate initial investment from the purchaser and (iv) other profit recognition criteria have been satisfied. Gains may be deferred in whole or in part until the sales satisfy the requirements of gain recognition on sales of real estate.

Real Estate Loans Receivable

     Real estate loans receivable consist of mortgage loans and other real estate loans. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risks. The loans are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guaranties and/or personal guaranties.

Allowance for Losses on Loans Receivable

     The allowance for losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of these loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying collateral. If such factors indicate that there is greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.

Goodwill

    We account for goodwill in accordance with U.S. GAAP. Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.  We have not had any goodwill impairments.

Fair Value of Derivative Instruments

     Derivatives are recorded at fair value on the balance sheet as assets or liabilities.  The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments.  Fair values of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates.  The fair value of our forward exchange contracts are estimated by pricing models that consider foreign currency spot rates, forward trade rates and discount rates.  Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. See Note 11 for additional information.

81

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Federal Income Tax

    We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our first taxable year, and made no provision for federal income tax purposes prior to our acquisition of our “taxable REIT subsidiaries.” As a result of these as well as subsequent acquisitions, we now record income tax expense or benefit with respect to certain of our entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions. We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.  See Note 18 for additional information.

Foreign Currency

    Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our consolidated balance sheets. We record transaction gains and losses in our consolidated statements of comprehensive income.

Earnings Per Share

     Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding for the period adjusted for non-vested shares of restricted stock. The computation of diluted earnings per share is similar to basic earnings per share, except that the number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

New Accounting Standards

     In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”).  The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted beginning after December 15, 2016.  We are currently evaluating the impact that the standard will have on our consolidated financial statements and have not yet determined the method by which we will adopt the standard.

     In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”), which makes certain changes to both the variable interest model and the voting interest model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination.  ASU 2015-02 is effective beginning January 1, 2016.  We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

     In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability.  The recognition and measurement guidance for debt issuance costs are not affected.  Also in August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”), which clarifies the SEC staff’s position not objecting to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing such costs, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.  We adopted ASU 2015-03 and 2015-15 for the year ended December 31, 2015.  There were deferred financing costs of $56,696,000 and $51,373,000 as of December 31, 2015 and 2014, respectively, that are now classified within senior unsecured notes and secured debt on our Consolidated Balance Sheets.

     In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”).  This guidance eliminated the requirement that an acquirer in a business combination account for adjustments it makes to the provisional amounts retrospectively.  Instead, an acquirer recognizes these measurement-period adjustments during the

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period in which they are determined, including the effect on earnings of any amounts the acquirer would have recorded in previous periods if the accounting had been completed at the acquisition date.  ASU 2015-16 is effective beginning January 1, 2016.  We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

Reclassifications

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

3. Real Property Acquisitions and Development

    The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments.  Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs.  Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries.  See Note 2 for information regarding our foreign currency policies.  During the year ended December 31, 2015, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.

     Triple-Net Activity

     The following provides our purchase price allocations and other triple-net real property investment activity for the periods presented (in thousands):

		Year Ended December 31,
			2015(1)		2014		2013
Land and land improvements		$	142,854	$	141,387	$	54,596
Buildings and improvements			1,358,717		1,365,638		360,594
Acquired lease intangibles			4,408		19,196		-
Restricted cash			6		-		189
Receivables and other assets			194		4,895		1,020
	Total assets acquired(2)		1,506,179		1,531,116		416,399
Secured debt			(47,741)		(130,638)		(9,810)
Senior unsecured notes			-		(48,567)		-
Accrued expenses and other liabilities			(2,905)		(9,067)		(540)
	Total liabilities assumed		(50,646)		(188,272)		(10,350)
Noncontrolling interests			(13,465)		-		-
Non-cash acquisition related activity(3)			(38,355)		(3,453)		(12,207)
	Cash disbursed for acquisitions		1,403,713		1,339,391		393,842
Construction in progress additions			143,140		135,349		145,624
Less:  Capitalized interest			(5,699)		(4,582)		(4,828)
Accruals	Foreign currency translation		(167)		421		-
	Non-cash related activity		-		(14,459)		-
Cash disbursed for construction in progress			137,274		116,729		140,796
Capital improvements to existing properties			45,293		18,901		35,912
	Total cash invested in real property, net of cash acquired	$	1,586,280	$	1,475,021	$	570,550
	(1) Includes acquisitions with an aggregate purchase price of $910,433,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
	(2) Excludes $16,572,000, $1,382,000, and $0 of cash acquired during the year ended December 31, 2015, 2014 and 2013, respectively.
	(3) For the year ended December 31, 2015, $23,288,000 relates to the acquisition of assets previously financed as real estate loans receivable and $6,743,000 previously financed as equity investments.  For the year ended December 31, 2013, $12,204,000 relates to an asset swap transaction.  Please refer to Notes 5 and 6.

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Seniors Housing Operating Activity

     Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18.  This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income. 

     The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):

		Year Ended December 31,
			2015(1)		2014		2013
Land and land improvements		$	218,581	$	57,534	$	445,152
Buildings and improvements			2,367,486		297,314		4,275,046
Acquired lease intangibles			187,512		12,983		396,444
Construction in progress			-		27,957		-
Restricted cash			11,798		804		44,427
Receivables and other assets			29,501		9,327		79,564
	Total assets acquired(2)		2,814,878		405,919		5,240,633
Secured debt			(871,471)		(19,834)		(1,275,245)
Senior unsecured notes			(24,621)		-		-
Accrued expenses and other liabilities			(81,778)		(17,802)		(96,709)
	Total liabilities assumed		(977,870)		(37,636)		(1,371,954)
Noncontrolling interests			(183,854)		(482)		(232,575)
Non-cash acquisition related activity(3)			-		-		(555,563)
Cash disbursed for acquisitions			1,653,154		367,801		3,080,541
Construction in progress additions			44,173		12,291		3,894
Less:  Capitalized interest			(1,740)		(714)		(57)
Less:  Foreign currency translation			(2,499)		(2,012)		-
Cash disbursed for construction in progress			39,934		9,565		3,837
Capital improvements to existing properties			104,308		86,803		72,258
	Total cash invested in real property, net of cash acquired	$	1,797,396	$	464,169	$	3,156,636
	(1) Includes an aggregate purchase price of $2,002,698,000 relating to acquisitions for which the allocation of the purchase price consideration is preliminary and subject to change.
	(2) Excludes $30,930,000, $9,060,000 and $92,148,000 of cash acquired during the years ended December 31, 2015, 2014 and 2013, respectively.
	(3) Represents Sunrise Senior Living loan and noncontrolling interest acquisitions during the first quarter of 2013.

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     Outpatient Medical Activity

          Accrued contingent consideration related to certain outpatient medical acquisitions was $0, $27,374,000 and $26,187,000 as of December 31, 2015, 2014 and 2013, respectively.  The following is a summary of our outpatient medical real property investment activity for the periods presented (in thousands):

		Year Ended December 31,
			2015(1)		2014		2013
Land and land improvements		$	176,689	$	63,129	$	14,515
Buildings and improvements			317,484		567,847		156,087
Acquired lease intangibles			45,226		46,661		9,432
Restricted cash			-		-		505
Receivables and other assets			939		-		344
	Total assets acquired(2)		540,338		677,637		180,883
Secured debt			(120,977)		(66,113)		(55,884)
Accrued expenses and other liabilities			(7,777)		(22,293)		(1,041)
	Total liabilities assumed		(128,754)		(88,406)		(56,925)
Noncontrolling interests			(76,535)		(39,987)		(386)
Non-cash acquisition related activity(3)			(27,025)		(45,836)		-
Cash disbursed for acquisitions			308,024		503,408		123,572
Construction in progress additions			70,560		99,878		123,494
Less:  Capitalized interest			(1,286)		(1,854)		(1,815)
Accruals(4)			(1,921)		(26,437)		(18,752)
Cash disbursed for construction in progress			67,353		71,587		102,927
Capital improvements to existing properties			38,151		27,076		27,662
	Total cash invested in real property, net of cash acquired	$	413,528	$	602,071	$	254,161
	(1) Includes acquisitions with an aggregate purchase price of $91,829,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
	(2) Excludes $5,522,000, $0 and $0 of cash acquired during the years ended December 31, 2015, 2014 and 2013, respectively.
	(3) Non-cash activity relates to the acquisition of a controlling interest in a portfolio of properties that was historically reported as an unconsolidated property investment for the year ended December 31, 2015. For the year ended December 31, 2014, the non-cash activity relates to an acquisition of assets previously financed as real estate loans.  Please refer to Note 6 for additional information.
	(4) Represents non-cash consideration accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.

     Construction Activity

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

			Year Ended
			December 31, 2015		December 31, 2014		December 31, 2013
	Development projects:
		Triple-net	$	104,844	$	71,569	$	133,181
		Seniors housing operating		19,869		-		-
		Outpatient medical		16,592		127,290		127,363
		Total development projects		141,305		198,859		260,544
	Expansion projects			38,808		24,804		26,395
Total construction in progress conversions			$	180,113	$	223,663	$	286,939

At December 31, 2015, future minimum lease payments receivable under operating leases (excluding properties in our seniors housing operating partnerships and excluding any operating expense reimbursements) are as follows (in thousands):

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2016	$	1,403,745
2017		1,402,087
2018		1,392,188
2019		1,350,736
2020		1,338,549
Thereafter		11,353,245
Totals	$	18,240,550

4. Real Estate Intangibles

     The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of the dates indicated (dollars in thousands):

		December 31, 2015		December 31, 2014
Assets:
	In place lease intangibles	$	1,179,537	$	988,290
	Above market tenant leases		67,529		65,684
	Below market ground leases		80,224		62,426
	Lease commissions		23,295		19,536
	Gross historical cost		1,350,585		1,135,936
	Accumulated amortization		(881,096)		(776,501)
	Net book value	$	469,489	$	359,435
	Weighted-average amortization period in years		13.4		17.7
Liabilities:
	Below market tenant leases	$	93,089	$	91,168
	Above market ground leases		7,907		7,859
	Gross historical cost		100,996		99,027
	Accumulated amortization		(46,048)		(40,891)
	Net book value	$	54,948	$	58,136
	Weighted-average amortization period in years		14.5		14.4

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

	Year Ended December 31,
	2015		2014		2013
Rental income related to above/below market tenant leases, net	$	(2,746)	$	509	$	748
Property operating expenses related to above/below market ground leases, net		(1,272)		(1,248)		(1,208)
Depreciation and amortization related to in place lease intangibles and lease commissions		(115,855)		(214,966)		(246,938)

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

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		Assets		Liabilities
2016	$	137,635	$	7,523
2017		81,166		6,812
2018		47,283		6,185
2019		25,582		5,775
2020		22,163		5,294
Thereafter		155,660		23,359
Totals	$	469,489	$	54,948

5. Dispositions, Assets Held for Sale and Discontinued Operations

We periodically sell properties for various reasons, including favorable market conditions or the exercise of tenant purchase options.  Impairment of assets as reflected in our consolidated statements of comprehensive income relate to properties designated as held for sale and represent the charges necessary to adjust the carrying values to estimated fair values less costs to sell based on current sales price expectations.  The following is a summary of our real property disposition activity for the periods presented (in thousands):

		Year Ended
		December 31, 2015		December 31, 2014		December 31, 2013
Real property dispositions:
	Triple-net	$	356,300	$	747,720	$	189,572
	Outpatient medical(1)		181,553		45,695		259,367
	Land parcels		5,724		-		-
	Total dispositions		543,577		793,415		448,939
Gain (loss) on sales of real property, net			280,387		153,522		49,138
Seller financing on sales of real property			-		-		(3,850)
Non-cash disposition activity			-		(35,872)		(12,204)
Proceeds from real property sales		$	823,964	$	911,065	$	482,023
	(1) Dispositions occurring in the year ended December 31, 2015 primarily relate to the disposition of an unconsolidated equity investment with Forest City Enterprises.

Dispositions and Assets Held for Sale

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

		Year Ended
		December 31,
		2015		2014		2013
Revenues:
	Rental income	$	35,241	$	115,759	$	132,797
Expenses:
	Interest expense		5,503		24,046		26,660
	Property operating expenses		6,102		7,669		8,970
	Provision for depreciation		6,342		35,239		41,494
	Total expenses		17,947		66,954		77,124
Income (loss) from real estate dispositions, net		$	17,294	$	48,805	$	55,673

Discontinued Operations

We have reclassified the income and expenses attributable to all properties sold prior to or held for sale at January 1, 2014 to discontinued operations in accordance with ASU 2014-08.  The following illustrates the reclassification impact as reported in our Consolidated Statements of Comprehensive Income as a result of classifying these properties as discontinued operations for the years presented (in thousands):

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			Year Ended December 31,
		2015		2014		2013
Revenues:
	Rental income	$	-	$	881	$	18,377
Expenses:
	Interest expense		-		157		4,246
	Property operating expenses		-		-		3,396
	Provision for depreciation		-		-		8,160
Income (loss) from discontinued operations, net		$	-	$	724	$	2,575

6. Real Estate Loans Receivable

     The following is a summary of our real estate loans receivable (in thousands):

		December 31,
	2015		2014
Mortgage loans	$	635,492	$	188,651
Other real estate loans		184,000		191,518
Totals	$	819,492	$	380,169

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

		Year Ended
		December 31, 2015						December 31, 2014						December 31, 2013
				Outpatient						Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	530,497	$	-	$	530,497	$	61,730	$	60,902	$	122,632	$	41,180	$	4,095	$	45,275
	Draws on existing loans		65,614		2,611		68,225		59,420		20,155		79,575		71,315		4,319		75,634
	Sub-total		596,111		2,611		598,722		121,150		81,057		202,207		112,495		8,414		120,909
	Less: Seller financing on property sales		-		-		-		-		-		-		(3,850)		-		(3,850)
	Net cash advances on real estate loans		596,111		2,611		598,722		121,150		81,057		202,207		108,645		8,414		117,059
Receipts on real estate loans receivable:
	Loan payoffs		121,778		-		121,778		71,004		48,258		119,262		69,596		-		69,596
	Principal payments on loans		33,340		-		33,340		31,998		72		32,070		33,216		74		33,290
	Sub-total		155,118		-		155,118		103,002		48,330		151,332		102,812		74		102,886
	Less: Non-cash activity(1)		(23,288)		-		(23,288)		-		(45,836)		(45,836)		-		-		-
	Net cash receipts on real estate loans		131,830		-		131,830		103,002		2,494		105,496		102,812		74		102,886
Net cash advances (receipts) on real estate loans			464,281		2,611		466,892		18,148		78,563		96,711		5,833		8,340		14,173
Change in balance due to foreign currency translation			(4,281)		-		(4,281)		(2,852)		-		(2,852)		1,402		-		1,402
Net change in real estate loans receivable		$	436,712	$	2,611	$	439,323	$	15,296	$	32,727	$	48,023	$	7,235	$	8,340	$	15,575
(1) Represents an acquisition of assets previously financed as a real estate loan.  Please see Note 3 for additional information.

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

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		Year Ended December 31,
	2015		2014		2013
Balance at beginning of  year	$	-	$	-	$	-
Provision for loan losses		-		-		2,110
Charge-offs		-		-		(2,110)
Balance at end of  year	$	-	$	-	$	-

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

		Year Ended December 31,
	2015		2014		2013
Balance of impaired loans at end of  year	$	-	$	21,000	$	500
Allowance for loan losses		-		-		-
Balance of impaired loans not reserved	$	-	$	21,000	$	500
Average impaired loans for the year	$	10,500	$	10,750	$	2,365
Interest recognized on impaired loans(1)		-		757		206
(1) Represents interest recognized prior to placement on non-accrual status.

7. Investments in Unconsolidated Entities

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

	Percentage Ownership(1)	December 31, 2015		December 31, 2014
Triple-net	10% to 49%	$	36,351	$	31,511
Seniors housing operating	10% to 50%		499,537		539,147
Outpatient medical	36% to 49%		6,393		173,493
Total		$	542,281	$	744,151
(1) Excludes ownership of in-substance real estate.

     At December 31, 2015, the aggregate unamortized basis difference of our joint venture investments of $158,204,000 is primarily attributable to appreciation of the underlying properties and transaction costs.  This difference will be amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities. Summary combined financial information for our investments in unconsolidated entities held as of December 31, 2015 is as follows (dollars in thousands):

		December 31, 2015		December 31, 2014
Net real estate investments	$	1,359,034	$	2,107,201
Other assets		2,241,084		992,637
Total assets		3,600,118		3,099,838
Total liabilities		2,769,093		1,769,457
Redeemable noncontrolling interests		14,024		40,525
Total equity	$	817,001	$	1,289,856

	Year Ended December 31,
		2015		2014		2013
Total revenues	$	2,947,993	$	1,879,240	$	1,739,381
Net income (loss)		(40,116)		5,002		(15,265)

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8. Credit Concentration

     We use net operating income from continuing operations (“NOI”) as our credit concentration metric.  See Note 17 for additional information and reconciliation.  The following table summarizes certain information about our credit concentration for the year ended December 31, 2015, excluding our share of NOI in unconsolidated entities (dollars in thousands):

		Number of	Total		Percent of
Concentration by relationship:(1)		Properties	NOI		NOI(2)
	Genesis Healthcare	187	$	371,170	17%
	Sunrise Senior Living(3)	148		299,697	13%
	Brookdale Senior Living	148		166,792	7%
	Revera	97		109,778	5%
	Benchmark Senior Living	50		98,887	4%
	Remaining portfolio	796		1,191,245	54%
	Totals	1,426	$	2,237,569	100%
	(1) Genesis Healthcare is in our triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment. Brookdale Senior Living and Benchmark Senior Living are in both our triple-net and seniors housing operating segments.
	(2) Investments with our top five relationships comprised 49% of NOI in 2014.
	(3) For the year ended December 31, 2015, we recognized $948,347,000 of revenue from Sunrise Senior Living.

9. Borrowings Under Credit Facilities and Related Items

     At December 31, 2015, we had a primary unsecured credit facility with a consortium of 28 banks that includes a $2,500,000,000 unsecured revolving credit facility, a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility.  We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000 and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000.  The primary unsecured credit facility also allows us to borrow up to $500,000,000 in alternate currencies (none outstanding at December 31, 2015).  Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (1.347% at December 31, 2015).  The applicable margin is based on certain of our debt ratings and was 0.925% at December 31, 2015.  In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount.  The facility fee depends on certain of our debt ratings and was 0.15% at December 31, 2015.  The primary unsecured credit facility is scheduled to expire October 31, 2018 and can be extended for an additional year at our option.

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

		Year Ended December 31,
		2015		2014		2013
Balance outstanding at year end(1)		$	835,000	$	-	$	130,000
Maximum amount outstanding at any month end		$	835,000	$	637,000	$	1,019,050
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	452,644	$	207,452	$	488,842
Weighted-average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.17%		1.50%		1.45%
(1) As of December 31, 2015, letters of credit in the aggregate amount of $54,925,000 have been issued which reduce the available borrowing capacity on the primary unsecured credit facility.

10. Senior Unsecured Notes and Secured Debt

We may repurchase, redeem or refinance convertible and non-convertible senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms.   The non-convertible senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions.   Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.  At December 31, 2015, the annual principal payments due on these

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debt obligations were as follows (in thousands):

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2016	$	400,000	$	547,325	$	947,325
2017		450,000		476,661		926,661
2018		450,000		650,763		1,100,763
2019(4,5)		1,280,649		380,588		1,661,237
2020(6)		666,779		173,833		840,612
Thereafter(7,8,9)		5,398,330		1,249,037		6,647,367
Totals	$	8,645,758	$	3,478,207	$	12,123,965
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the consolidated balance sheet.
(2) Annual interest rates range from 1.4% to 6.5%.
(3) Annual interest rates range from 1.0% to 7.98%.  Carrying value of the properties securing the debt totaled $6,285,511,000 at December 31, 2015.
(4) On July 25, 2014, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $180,649,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2015). The loan matures on October 31, 2018 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 97.5 basis points (1.8% at December 31, 2015).
(5) On July 25, 2014, we refinanced the funding on a $500,000,000 unsecured term credit facility.  The loan matures on October 31, 2018 (with an option to extend for one additional year at our discretion) and bears interest at LIBOR plus 97.5 basis points (1.4% at December 31, 2015).
(6) In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $216,779,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2015).
(7) On November 20, 2013, we completed funding on £550,000,000 (approximately $811,030,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2015) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed funding on £500,000,000 (approximately $737,300,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2015) of 4.5% senior unsecured notes due 2034.
(9) In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025.  In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.

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

	Year Ended
	December 31, 2015			December 31, 2014			December 31, 2013
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	7,817,154	4.385%	$	7,421,707	4.395%	$	5,894,403	4.675%
Debt issued		1,475,540	3.901%		838,804	4.572%		2,036,930	3.824%
Debt assumed		24,621	6.000%		-	0.000%		-	0.000%
Debt extinguished		(300,000)	6.200%		(298,567)	5.855%		(300,000)	6.000%
Debt redeemed		(240,249)	3.303%		(59,143)	3.000%		(219,295)	3.000%
Foreign currency		(131,308)	3.966%		(85,647)	4.222%		9,669	3.993%
Ending balance	$	8,645,758	4.237%	$	7,817,154	4.385%	$	7,421,707	4.395%

     During the twelve months ended December 31, 2010, we issued $494,403,000 of 3.00% senior unsecured convertible notes due December 2029. The notes are convertible, in certain circumstances, into cash and, if applicable, shares of common stock at an initial conversion rate of 19.5064 shares per $1,000 principal amount of notes, which represents an initial conversion price of $51.27 per share. In general, upon conversion, the holder of each note would receive, in respect of the conversion value of such note, cash up to the principal amount of such note and common stock for the note’s conversion value in excess of such principal amount. In addition, on each of December 1, 2019 and December 1, 2024, holders may require us to purchase all or a portion of their notes at a purchase price in cash equal to 100% of the principal amount of the notes to be purchased, plus any accrued and unpaid interest. The notes are bifurcated into a debt component and an equity component since they may be settled in cash upon conversion. The value of the debt component is based upon the estimated fair value of a similar debt instrument without the conversion feature at the time of issuance. The difference between the contractual principal on the debt and the value allocated to the debt of $29,925,000 was recorded as an equity component and represents the conversion feature of the instrument. The excess of the contractual principal amount of the debt over its estimated fair value is amortized to interest expense using the effective interest method over the period used to estimate the fair value.  During the year ended December 31, 2015, we received notice of conversion from holders of $215,965,000 of the senior unsecured convertible notes, representing the remaining balance.  These notes were converted into 366,211 shares of common stock and we recognized a loss on extinguishment of $5,881,000, which is reflected on the consolidated statement of comprehensive income. 

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

	Year Ended
		December 31, 2015		December 31, 2014			December 31, 2013
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,941,765	4.940%	$	3,010,711	5.095%	$	2,311,586	5.140%
Debt issued		228,685	2.776%		109,503	3.374%		89,208	4.982%
Debt assumed		1,007,482	3.334%		204,949	4.750%		1,290,858	4.159%
Debt extinguished		(506,326)	4.506%		(279,559)	4.824%		(614,375)	3.730%
Principal payments		(67,064)	4.801%		(62,280)	4.930%		(56,205)	5.248%
Foreign currency		(126,335)	3.834%		(41,559)	3.811%		(10,361)	4.013%
Ending balance	$	3,478,207	4.440%	$	2,941,765	4.940%	$	3,010,711	5.095%

     Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2015, we were in compliance with all of the covenants under our debt agreements.

11. Derivative Instruments

     We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We may elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to manage the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates.  In addition, non-U.S. investments expose us to the potential losses associated with adverse changes in foreign currency to U.S. Dollar exchange rates.  We have elected to manage these risks through the use of forward exchange contracts and issuing debt in the foreign currency.

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

     For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings.  Approximately $2,942,000 of gains, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

     For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.  During the year ended December 31, 2015, we settled certain net investment hedges generating cash proceeds of $106,360,000.  The balance of the cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or substantially liquidated. 

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

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		December 31, 2015		December 31, 2014
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	1,175,000	$	900,000
Denominated in Pounds Sterling	£	550,000	£	350,000
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars	$	250,000	$	250,000
Denominated in Pounds Sterling	£	1,050,000	£	1,050,000
Derivatives designated as cash flow hedges
Denominated in U.S. Dollars	$	57,000	$	57,000
Denominated in Canadian Dollars	$	72,000	$	58,000
Denominated in Pounds Sterling	£	60,000	£	40,000
Derivative instruments not designated:
Denominated in Canadian Dollars	$	47,000	$	12,000

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

		Year Ended
	Location	December 31, 2015		December 31, 2014		December 31, 2013
Gain (loss) on forward exchange contracts recognized in income	Gain (loss) on derivatives, net	$	-	$	1,495	$	(4,470)
Gain (loss) on forward exchange contracts recognized in income	Interest expense		14,474		-		-
Loss (gain) on option exercise(1)	Gain (loss) on derivatives, net		(58,427)		-		-
Gain (loss) on forward exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		298,116		103,140		(28,244)
(1) In April 2011, we completed the acquisition of substantially all of the real estate assets of privately-owned Genesis Healthcare Corporation.  In conjunction with this transaction, we received the option to acquire an ownership interest in Genesis Healthcare.  In February 2015, Genesis Healthcare closed on a transaction to merge with Skilled Healthcare Group to become a publicly traded company which required us to record the value of the derivative asset due to the net settlement feature.

12. Commitments and Contingencies

     At December 31, 2015, we had nine outstanding letter of credit obligations totaling $96,096,000 and expiring between 2016 and 2018.  At December 31, 2015, we had outstanding construction in process of $258,968,000 for leased properties and were committed to providing additional funds of approximately $525,588,000 to complete construction. At December 31, 2015, we had contingent purchase obligations totaling $24,088,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.

     We evaluate our leases for operating versus capital lease treatment in accordance with ASC Topic 840 “Leases.”  A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases.  At December 31, 2015, we had operating lease obligations of $990,027,000 relating to

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certain ground leases and Company office space. Regarding the ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations. At December 31, 2015, aggregate future minimum rentals to be received under these noncancelable subleases totaled $26,445,000.

     At December 31, 2015, future minimum lease payments due under operating and capital leases are as follows (in thousands):

	Operating Leases		Capital Leases(1)
2016	$	15,543	$	4,732
2017		15,624		4,732
2018		15,691		4,679
2019		15,665		4,333
2020		14,928		4,173
Thereafter		912,576		75,920
Totals	$	990,027	$	98,569
(1) Amounts above represent principal and interest obligations under capital lease arrangements.  Related assets with a gross value of $167,324,000 and accumulated depreciation of $20,555,000 are recorded in real property.

13. Stockholders’ Equity

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

		December 31, 2015	December 31, 2014
Preferred Stock, $1.00 par value:
	Authorized shares	50,000,000	50,000,000
	Issued shares	25,875,000	25,875,000
	Outstanding shares	25,875,000	25,875,000
Common Stock, $1.00 par value:
	Authorized shares	700,000,000	700,000,000
	Issued shares	355,594,373	329,487,615
	Outstanding shares	354,777,670	328,790,066

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

	Year Ended
	December 31, 2015		December 31, 2014		December 31, 2013
		Weighted Avg.		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	25,875,000	6.500%	26,108,236	6.496%	26,224,854	6.493%
Shares converted	-	0.000%	(233,236)	6.000%	(116,618)	6.000%
Ending balance	25,875,000	6.500%	25,875,000	6.500%	26,108,236	6.496%

     During the three months ended December 31, 2010, we issued 349,854 shares of 6.00% Series H Cumulative Convertible and Redeemable Preferred Stock in connection with a business combination.  During the years ended December 31, 2013 and 2014, all shares were converted into common stock, leaving zero shares outstanding.

     During the three months ended March 31, 2011, we issued 14,375,000 of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock.  These shares have a liquidation value of $50.00 per share.  Dividends are payable quarterly in arrears.  The preferred stock is not redeemable by us.  The preferred shares are convertible, at the holder’s option, into 0.8460 shares of common stock (equal to an initial conversion price of approximately $59.10).

     During the three months ended March 31, 2012, we issued 11,500,000 of 6.50% Series J Cumulative Redeemable Preferred Stock.  Dividends are payable quarterly in arrears.  The preferred stock, which has no stated maturity, may be redeemed by us at a redemption price of $25.00 per share, plus accrued and unpaid dividends on such shares to the redemption date, on or after March 7, 2017.

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Common Stock. The following is a summary of our common stock issuances during the periods indicated (dollars in thousands, except per share amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
May 2013 public issuance	23,000,000	$	73.50	$	1,690,500	$	1,630,281
2013 Dividend reinvestment plan issuances	3,429,928		62.78		215,346		215,346
2013 Option exercises	213,724		42.16		9,010		9,010
2013 Senior note conversions	988,007				-		-
2013 Preferred stock conversions	116,618				-		-
2013 Equity issued in acquisition of noncontrolling interest	1,108,917				-		-
2013 Totals	28,857,194			$	1,914,856	$	1,854,637
June 2014 public issuance	16,100,000	$	62.35	$	1,003,835	$	968,517
September 2014 public issuance	17,825,000		63.75		1,136,344		1,095,465
2014 Dividend reinvestment plan issuances	4,122,941		62.35		257,055		257,055
2014 Option exercises	498,549		45.79		22,831		22,831
2014 Preferred stock conversions	233,236				-		-
2014 Stock incentive plans, net of forfeitures	188,147				-		-
2014 Senior note conversions	258,542				-		-
2014 Totals	39,226,415			$	2,420,065	$	2,343,868
February 2015 public issuance	19,550,000	$	75.50	$	1,476,025	$	1,423,935
2015 Dividend reinvestment plan issuances	4,024,169		67.72		272,531		272,531
2015 Option exercises	249,054		47.35		11,793		11,793
2015 Equity Shelf Program issuances	696,070		69.23		48,186		47,463
2015 Stock incentive plans, net of forfeitures	137,837				-		-
2015 Senior note conversions	1,330,474				-		-
2015 Totals	25,987,604			$	1,808,535	$	1,755,722

     During the twelve months ended December 31, 2013, we acquired the remaining 20% noncontrolling interest in an existing partnership for $91,000,000 which consisted of $23,247,000 of cash and 1,108,917 shares of common stock. In connection with the acquisition, we incurred $2,732,000 of transaction costs, which we have included as a reduction to additional paid in capital.

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

	Year Ended
	December 31, 2015				December 31, 2014				December 31, 2013
	Per Share		Amount		Per Share		Amount		Per Share		Amount
Common Stock	$	3.30000	$	1,144,727	$	3.18000	$	969,661	$	3.06000	$	839,939
Series H Preferred Stock		-		-		0.00794		1		2.85840		930
Series I Preferred Stock		3.25000		46,719		3.25000		46,719		3.25000		46,719
Series J Preferred Stock		1.62510		18,687		1.62510		18,688		1.62510		18,687
Totals			$	1,210,133			$	1,035,069			$	906,275

     Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in thousands):

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		Unrecognized gains (losses) related to:
		Foreign Currency Translation		Equity Investments		Actuarial losses		Cash Flow Hedges		Total
Balance at December 31, 2014	$	(74,770)	$	-	$	(1,589)	$	(650)	$	(77,009)
Other comprehensive income before reclassification adjustments		(10,714)		-		246		(2,626)		(13,094)
Reclassification amount to net income		-		-		-		1,860 (1)		1,860
Net current-period other comprehensive income		(10,714)		-		246		(766)		(11,234)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Balance at December 31, 2013	$	(17,631)	$	(389)	$	(1,452)	$	(5,059)	$	(24,531)
Other comprehensive income before reclassification adjustments		(56,611)		389		(137)		2,610		(53,749)
Reclassification amount to net income		(528)		-		-		1,799 (1)		1,271
Net current-period other comprehensive income		(57,139)		389		(137)		4,409		(52,478)
Balance at December 31, 2014	$	(74,770)	$	-	$	(1,589)	$	(650)	$	(77,009)
(1) Please see Note 11 for additional information.

Other Equity.  Other equity consists of accumulated option compensation expense, which represents the amount of amortized compensation costs related to stock options awarded to employees and directors.

14. Stock Incentive Plans

     Our Amended and Restated 2005 Long-Term Incentive Plan (“2005 Plan”) authorizes up to 6,200,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors.  Our non-employee directors, officers and key employees are eligible to participate in the 2005 Plan.  The 2005 Plan allows for the issuance of, among other things, stock options, restricted stock, deferred stock units and dividend equivalent rights.  Vesting periods for options, deferred stock units and restricted shares generally range from three to five years.  Options expire ten years from the date of grant.

     Under our long-term incentive plan, certain restricted stock awards are performance based.  We will grant a target number of restricted stock units, with the ultimate award determined by the total shareholder return and operating performance metrics, measured in each case over a measurement period of three years.  One third of the award will vest immediately at the end of the three year performance period, one third will vest a year after the performance period, and the remaining one third will vest two years after the performance period.  Compensation expense for these performance grants is measured based on the probability of achievement of certain performance goals and is recognized over both the performance period and vesting period.  For the portion of the grant for which the award is determined by the operating performance metrics, the estimated compensation cost was based on the grant date closing price and management’s estimate of corporate achievement for the financial metrics.  If the estimated number of performance based restricted stock to be earned changes, an adjustment will be recorded to recognize the accumulated difference between the revised and previous estimates.  For the portion of the grant determined by the total shareholder return, management used a Monte Carlo model to assess the compensation cost.  The expected term represents the period from the grant date to the end of the three-year performance period.  The estimated compensation cost was derived using the following assumptions: risk free rates over the life of the plan ranging from 0.16% to 1.16%; estimated volatility figures ranging from 13.64% to 42.75% over the life of the plan using 50% historical volatility and 50% implied volatility; and dividend yield of 4.818%.

     The following table summarizes compensation expense recognized for the periods presented (in thousands):

		Year Ended December 31,
	2015		2014		2013
Stock options	$	698	$	912	$	1,113
Restricted stock		30,146		31,163		19,064
	$	30,844	$	32,075	$	20,177

Stock Options

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     We have not granted stock options since the year ended December 31, 2012 but some remain outstanding.  As of December 31, 2015, there was $300,000 of total unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of one year.  Stock options outstanding at December 31, 2015 have an aggregate intrinsic value of $8,476,000.

Restricted Stock

The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant and is amortized over the vesting periods.As of December 31, 2015, there was $24,894,000 of total unrecognized compensation expense related to unvested restricted stock that is expected to be recognized over a weighted-average period of three years.  The following table summarizes information about non-vested restricted stock incentive awards as of and for the year ended December 31, 2015:

	Restricted Stock
	Number of	Weighted-Average
	Shares	Grant Date
	(000's)	Fair Value
Non-vested at December 31, 2014	554	$	56.92
Vested	(306)		61.09
Granted	449		66.93
Terminated	(59)		66.09
Non-vested at December 31, 2015	638	$	62.00

15. Earnings Per Share

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

		Year Ended December 31,
		2015		2014		2013
Numerator for basic and diluted earnings
	per share - net income attributable to
	common stockholders	$	818,344	$	446,745	$	78,714
Denominator for basic earnings per
	share: weighted-average shares		348,240		306,272		276,929
Effect of dilutive securities:
	Employee stock options		143		188		226
	Non-vested restricted shares		535		500		457
	Redeemable shares		310		-		-
	Convertible senior unsecured notes		196		787		1,149
Dilutive potential common shares			1,184		1,475		1,832
Denominator for diluted earnings per
	share: adjusted-weighted average shares		349,424		307,747		278,761
Basic earnings per share		$	2.35	$	1.46	$	0.28
Diluted earnings per share		$	2.34	$	1.45	$	0.28

Stock options outstanding were anti-dilutive for the years ended December 31, 2015, 2014 and 2013.  The Series H Cumulative Convertible and Redeemable Preferred Stock and the Series I Cumulative Convertible Perpetual Preferred Stock were excluded from the calculations as the effect of the conversions also were anti-dilutive.

16. Disclosure about Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Mortgage Loans and Other Real Estate Loans Receivable — The fair value of mortgage loans and other real estate loans receivable is generally estimated by using level two and level three inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. 

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Cash and Cash Equivalents — The carrying amount approximates fair value.

Available-for-sale Equity Investments — Available-for-sale equity investments are recorded at their fair value based on level one publicly available trading prices.

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

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on level one publicly available trading prices.

Secured Debt — The fair value of fixed rate secured debt is estimated using level two inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities.  The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.

Interest Rate Swap Agreements — Interest rate swap agreements are recorded in other assets or other liabilities on the balance sheet at fair market value.  Fair market value is estimated using level two inputs by utilizing pricing models that consider forward yield curves and discount rates.

Foreign Currency Forward Contracts — Foreign currency forward contracts are recorded in other assets or other liabilities on the balance sheet at fair market value.  Fair market value is determined using level two inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

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

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

		December 31, 2015				December 31, 2014
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Financial Assets:
	Mortgage loans receivable	$	635,492	$	663,501	$	188,651	$	194,935
	Other real estate loans receivable		184,000		185,693		191,518		195,375
	Available-for-sale equity investments		22,779		22,779		-		-
	Cash and cash equivalents		360,908		360,908		473,726		473,726
	Foreign currency forward contracts		129,520		129,520		57,087		57,087
Financial Liabilities:
	Borrowings under unsecured lines of credit arrangements	$	835,000	$	835,000	$	-	$	-
	Senior unsecured notes		8,548,055		9,020,529		7,729,405		8,613,702
	Secured debt		3,509,142		3,678,564		2,963,186		3,053,067
	Foreign currency forward contracts		-		-		1,495		1,495
Redeemable OP unitholder interests		$	112,029	$	112,029	$	46,722	$	46,722

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities.  The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The guidance describes three levels of inputs that may be used to measure fair value:

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Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.  Please see Note 2 for additional information.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Items Measured at Fair Value on a Recurring Basis

The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

	Fair Value Measurements as of December 31, 2015
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	22,779	$	22,779	$	-	$	-
Foreign currency forward contracts(2)		129,520		-		129,520		-
Redeemable OP unitholder interests		112,029		-		112,029		-
Totals	$	241,549	$	-	$	241,549	$	-
(1) Unrealized gain or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date. During 2015, we recognized an other than temporary impairment charge of $35,648,000 on the Genesis Healthcare stock investment which was recorded through other expense.  Also see Note 11 for details related to the gain on the derivative asset originally recognized.
(2) Please see Note 11 for additional information.

Items Measured at Fair Value on a Nonrecurring Basis

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

17. Segment Reporting

     We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our four operating segments: triple-net, seniors housing operating, outpatient medical and life science. During the year ended December 31, 2015, we changed the names of our seniors housing triple-net segment to triple-net and our medical facilities segment to outpatient medical.

     Our triple-net properties include long-term/post-acute care facilities, hospitals, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), independent support living facilities (Canada), care homes with nursing (United Kingdom) and combinations thereof.  Under the triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties.  Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property.  Our seniors housing operating properties include the seniors housing communities referenced above that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

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     Our outpatient medical properties include outpatient medical buildings and life science buildings which are aggregated into our outpatient medical reportable segment. Our outpatient medical buildings are typically leased to multiple tenants and generally require a certain level of property management.  During the year ended December 31, 2015, we disposed of our life science investments.

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

      Non-segment revenue consists mainly of interest income on certain non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.

     The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments.  There are no intersegment sales or transfers.

     Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2015, 2014 and 2013 is as follows (in thousands):

Year Ended December 31, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	1,119,322	$	-	$	479,626	$	-	$	1,598,948
Resident fees and services		-		2,158,031		-		-		2,158,031
Interest income		74,108		4,180		5,853		-		84,141
Other income		6,871		6,060		4,684		1,091		18,706
Total revenues		1,200,301		2,168,271		490,163		1,091		3,859,826
Property operating expenses		-		1,467,009		155,248		-		1,622,257
Net operating income from continuing operations		1,200,301		701,262		334,915		1,091		2,237,569
Reconciling items:
Interest expense		30,288		147,832		28,822		285,227		492,169
(Loss) gain on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		294,484		351,733		180,023		-		826,240
General and administrative		-		-		-		147,416		147,416
Transaction costs		53,254		54,966		2,706		-		110,926
(Loss) gain on extinguishment of debt, net		10,095		(195)		-		24,777		34,677
Impairment of assets		2,220		-		-		-		2,220
Other expenses		35,648		-		-		10,583		46,231
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities		832,739		146,926		123,364		(466,912)		636,117
Income tax expense		(4,244)		986		245		(3,438)		(6,451)
(Loss) income from unconsolidated entities		8,260		(32,672)		2,908		-		(21,504)
Income (loss) from continuing operations		836,755		115,240		126,517		(470,350)		608,162
Gain (loss) on real estate dispositions, net		86,261		-		194,126		-		280,387
Net income (loss)	$	923,016	$	115,240	$	320,643	$	(470,350)	$	888,549
Total assets	$	12,692,054	$	11,519,902	$	4,727,227	$	84,662	$	29,023,845

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Year Ended December 31, 2014:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	992,638	$	-	$	413,129	$	-	$	1,405,767
Resident fees and services		-		1,892,237		-		-		1,892,237
Interest income		32,255		2,119		3,293		-		37,667
Other income		2,973		3,215		1,010		677		7,875
Total revenues		1,027,866		1,897,571		417,432		677		3,343,546
Property operating expenses		732		1,266,308		136,318		-		1,403,358
Net operating income from continuing operations		1,027,134		631,263		281,114		677		1,940,188
Reconciling items:
Interest expense		38,460		113,099		32,904		296,576		481,039
(Loss) gain on derivatives, net		(1,770)		275		-		-		(1,495)
Depreciation and amortization		273,296		418,199		152,635		-		844,130
General and administrative		-		-		-		142,943		142,943
Transaction costs		45,146		16,880		7,512		-		69,538
(Loss) gain on extinguishment of debt, net		98		383		405		8,672		9,558
Other expenses		8,825		1,437		-		-		10,262
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities		663,079		80,990		87,658		(447,514)		384,213
Income tax expense		6,141		(3,047)		(1,827)		-		1,267
(Loss) income from unconsolidated entities		5,423		(38,204)		5,355		-		(27,426)
Income (loss) from continuing operations		674,643		39,739		91,186		(447,514)		358,054
Income (loss) from discontinued operations		7,135		-		-		-		7,135
Gain (loss) on real estate dispositions, net		146,205		-		906				147,111
Net income (loss)	$	827,983	$	39,739	$	92,092	$	(447,514)	$	512,300
Total assets	$	10,918,946	$	9,519,833	$	4,464,857	$	59,287	$	24,962,923

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Year Ended December 31, 2013		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	866,138	$	-	$	361,451	$	-	$	1,227,589
Resident fees and services		-		1,616,290		-		-		1,616,290
Interest income		28,214		757		3,692		-		32,663
Other income		1,504		355		1,911		296		4,066
Total revenues		895,856		1,617,402		367,054		296		2,880,608
Property operating expenses		1,235		1,089,239		116,339		-		1,206,813
Net operating income from continuing operations		894,621		528,163		250,715		296		1,673,795
Reconciling items:
Interest expense		23,322		92,148		36,823		306,067		458,360
Loss (gain) on derivatives, net		4,877		(407)		-		-		4,470
Depreciation and amortization		249,913		478,007		137,880		-		865,800
General and administrative		-		-		-		108,318		108,318
Transaction costs		24,426		107,066		1,909		-		133,401
Loss (gain) on extinguishment of debt, net		40		(3,372)		-		2,423		(909)
Provision for loan losses		2,110		-		-		-		2,110
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities		589,933		(145,279)		74,103		(416,512)		102,245
Income tax expense		(1,817)		(5,337)		(270)		(67)		(7,491)
(Loss) income from unconsolidated entities		5,035		(22,695)		9,473		-		(8,187)
Income from continuing operations		593,151		(173,311)		83,306		(416,579)		86,567
Income (loss) from discontinued operations		57,742		-		(6,029)		-		51,713
Net income (loss)	$	650,893	$	(173,311)	$	77,277	$	(416,579)	$	138,280

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

		Year Ended
		December 31, 2015			December 31, 2014			December 30, 2013
Revenues:		Amount	%		Amount	%		Amount	%
United States	$	3,133,327	81.2%	$	2,801,474	83.8%	$	2,489,196	86.4%
International		726,499	18.8%		542,072	16.2%		391,412	13.6%
Total	$	3,859,826	100.0%	$	3,343,546	100.0%	$	2,880,608	100.0%
		As of
		December 31, 2015			December 31, 2014
Assets:		Amount	%		Amount	%
United States	$	25,995,793	89.6%	$	19,855,076	79.5%
International		3,028,052	10.4%		5,107,847	20.5%
Total	$	29,023,845	100.0%	$	24,962,923	100.0%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. Income Taxes and Distributions

We elected to be taxed as a REIT commencing with our first taxable year.  To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders.  REITs that do not distribute a certain amount of current year taxable income in the current year are also subject to a 4% federal excise tax. The main differences between net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes.

Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the periods presented:

			Year Ended December 31,
			2015		2014		2013
Per Share:
	Ordinary income	$	1.9134	$	1.7861	$	1.4928
	Qualified dividend		0.0529		-		-
	Return of capital		0.0503		0.8368		1.4176
	Long-term capital gains		0.9352		0.1638		0.0448
	Unrecaptured section 1250 gains		0.3482		0.3933		0.1048
	Totals	$	3.3000	$	3.1800	$	3.0600

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

		Year Ended December 31,
		2015		2014		2013
Current	$	10,177	$	2,672	$	12,389
Deferred		(3,726)		(3,939)		(4,898)
Totals	$	6,451	$	(1,267)	$	7,491

      REITs generally are not subject to U.S. federal income taxes on that portion of REIT taxable income or capital gain that is distributed to stockholders.  For the tax year ended December 31, 2015, as a result of acquisitions located in Canada and the United Kingdom, we were subject to foreign income taxes under the respective tax laws of these jurisdictions. 

     The provision for income taxes for the year ended December 31, 2015 primarily relates to state taxes, foreign taxes, and taxes based on income generated by entities that are structured as taxable REIT subsidiaries.  During 2014, we established certain new wholly-owned direct and indirect subsidiaries in Luxembourg and Jersey and transferred interests in certain foreign investments into this new holding company structure.  The new structure includes a property holding company that is tax resident in the United Kingdom.  No material adverse current tax consequences in Luxembourg, Jersey or the United Kingdom resulted from the creation of this new holding company structure and all of the subsidiary entities in the structure are treated as disregarded entities of the Company for U.S. federal income tax purposes.  The Company will reflect current and deferred tax liabilities for any such withholding taxes incurred as a result of this holding company structure in its consolidated financial statements.

     For the tax years ended December 31, 2015, 2014 and 2013, the foreign tax provision/(benefit) amount included in the consolidated provision for income taxes was $7,385,000, ($6,069,000) and ($484,000), respectively.

     A reconciliation of income tax expense, which is computed by applying the federal corporate tax rate for the years ended December 31, 2015, 2014 and 2013, to the income tax provision/(benefit) is as follows for the periods presented (dollars in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		Year Ended December 31,
		2015		2014		2013
Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes	$	313,250	$	178,862	$	51,020
Increase  / (decrease) in valuation allowance(1)		13,759		9,133		18,444
Tax at statutory rate on earnings not subject to federal income taxes		(319,832)		(189,070)		(88,762)
Foreign permanent depreciation		7,500		4,383		22,313
Other differences		(8,226)		(4,575)		4,476
Totals	$	6,451	$	(1,267)	$	7,491
(1) Excluding purchase price accounting.

     Each TRS and foreign entity subject to income taxes is a tax paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of taxable and deductible temporary differences, as well as tax attributes, are summarized as follows for the periods presented (dollars in thousands):

		Year Ended December 31,
		2015		2014		2013
Investments and property, primarily differences in investment basis, depreciation and amortization, the basis of land assets and the treatment of interests and certain costs	$	(30,564)	$	(1,020)	$	(34,236)
Operating loss and interest deduction carryforwards		75,455		47,528		67,215
Expense accruals and other		6,259		26,191		19,309
Valuation allowance		(98,966)		(85,207)		(71,955)
Totals	$	(47,816)	$	(12,508)	$	(19,667)

    We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.  As required under the provisions of ASC 740, we apply the concepts on an entity-by-entity, jurisdiction-by-jurisdiction basis.  With respect to the analysis of certain entities in multiple jurisdictions, a significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2015.  Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. 

     On the basis of the evaluations performed as required by the codification, valuation allowances totaling $98,966,000 were recorded on U.S. taxable REIT subsidiaries as well as entities in other jurisdictions to limit the deferred tax assets to the amount that we believe is more likely that not realizable.  However, the amount of the deferred tax asset considered realizable could be adjusted if (i) estimates of future taxable income during the carryforward period are reduced or increased or (ii) objective negative evidence in the form of cumulative losses is no longer present (and additional weight may be given to subjective evidence such as our projections for growth).  The valuation allowance rollforward is summarized as follows for the periods presented (dollars in thousands):

		Year Ended December 31,
		2015		2014		2013
Beginning balance	$	85,207	$	71,955	$	12,199
Additions:
Purchase price accounting		-		4,119		41,312
Expense		13,759		9,133		18,444
Ending balance	$	98,966	$	85,207	$	71,955

 As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions that may occur during the five-year period immediately after such assets were owned by a C corporation (“built-in gains tax”). The amount of income potentially subject to this special corporate level tax is generally equal to the lesser of (a) the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset, or (b) the actual amount of gain. Some but not all gains recognized during this period of time could be offset by available net operating losses and capital loss carryforwards.  During the year ended December 31, 2015, we acquired certain additional assets with built-in gains as of the date of acquisition that could be subject to the built-in

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gains tax if disposed of prior to the expiration of the applicable five-year period.  We have not recorded a deferred tax liability as a result of the potential built-in gains tax based on our intentions with respect to such properties and available tax planning strategies.

Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, the REIT may lease “qualified health care properties” on an arm’s-length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property.” A “qualified health care property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients.  We have entered into various joint ventures that were structured under RIDEA.  Resident level rents and related operating expenses for these facilities are reported in the consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in a TRS.  Certain net operating loss carryforwards could be utilized to offset taxable income in future years.

Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2012 and subsequent years. The statute of limitations may vary in the states in which we own properties or conduct business.  We do not expect to be subject to audit by state taxing authorities for any year prior to the year ended December 31, 2009. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to May 2012 related to entities acquired or formed in connection with acquisitions, and by HM Revenue & Customs for periods subsequent to August 2012 related to entities acquired or formed in connection with acquisitions.

At December 31, 2015, we had a net operating loss (“NOL”) carryforward related to the REIT of $443,197,000.  Due to our uncertainty regarding the realization of certain deferred tax assets, we have not recorded a deferred tax asset related to NOLs generated by the REIT.  These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid.  The NOL carryforwards will expire through 2035.

     At December 31, 2015, and 2014, we had a net operating loss carryforward related to Canadian entities of $78,680,000, and $32,085,000, respectively.  These Canadian losses have a 20-year carryforward period.  At December 31, 2015 and 2014, we had a net operating loss carryforward related to United Kingdom entities of $179,598,000 and $177,079,000, respectively.  These United Kingdom losses do not have a finite carryforward period.

19. Retirement Arrangements

We have a Supplemental Executive Retirement Plan (“SERP”), a non-qualified defined benefit pension plan, which provides one former executive officer with supplemental deferred retirement benefits. The SERP provides an opportunity for the participant to receive retirement benefits that cannot be paid under our tax-qualified plans because of the restrictions imposed by ERISA and the Internal Revenue Code of 1986, as amended. Benefits are based on compensation and length of service and the SERP is unfunded. Benefit payments are expected to total $5,654,000 during the next five fiscal years. We use a December 31 measurement date for the SERP. The accrued liability on our balance sheet for the SERP was $5,474,000 at December 31, 2015 ($6,882,000 at December 31, 2014).

On April 13, 2014, George L. Chapman, formerly the Chairman, Chief Executive Officer and President of the Company, informed the Board of Directors that he wished to retire from the Company, effective immediately.  As a result of Mr. Chapman’s retirement, general and administrative expenses for the year ended December 31, 2014 included charges of $19,688,000 related to: (i) the acceleration of $9,223,000 of deferred compensation for restricted stock; and (ii) consulting, retirement payments and other costs of $10,465,000.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20. Quarterly Results of Operations (Unaudited)

The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 (in thousands, except per share data). The sum of individual quarterly amounts may not agree to the annual amounts included in the consolidated statements of income due to rounding.

		Year Ended December 31, 2015
		1st Quarter		2nd Quarter		3rd Quarter(1)		4th Quarter(2)
Revenues		$	894,177	$	957,169	$	978,997	$	1,029,484
Net income (loss) attributable to common stockholders			190,799		312,573		182,043		132,929
Net income (loss) attributable to common stockholders per share:
	Basic	$	0.57	$	0.89	$	0.52	$	0.38
	Diluted		0.56		0.89		0.52		0.37
		Year Ended December 31, 2014
		1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenues		$	801,807	$	826,446	$	847,523	$	867,770
Net income attributable to common stockholders			50,022		71,829		136,255		188,639
Net income attributable to common stockholders per share:
	Basic	$	0.17	$	0.24	$	0.44	$	0.58
	Diluted		0.17		0.24		0.44		0.57
(1) The decrease in net income and amounts per share are primarily attributable to gains on sales of real estate of $190,111,000 for the second quarter as compared to gains of $2,046,000 for the third quarter.
(2) The decrease in net income and amounts per share are primarily attributable to the other than temporary impairment charge of $35,648,000 recognized on the available-for-sale investment and increased transaction costs incurred due to fourth quarter acquisitions.

106

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

Not applicable.

Item 9A.  Controls and Procedures

Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in a report entitled Internal Control — Integrated Framework. 

The scope of management’s assessment as of December 31, 2015 did not include an assessment of the internal control over financial reporting for certain acquisitions because the business combinations occurred during the year ended December 31, 2015. The acquired businesses represent 4% of total assets at December 31, 2015 and less than 1% of revenues and net operating income for the year then ended. The scope of management’s assessment on internal control over financial reporting for the year ended December 31, 2016 will include the aforementioned acquired operations.

Based on this assessment, using the criteria above, management concluded that the Company’s system of internal control over financial reporting was effective as of December 31, 2015.

The independent registered public accounting firm of Ernst & Young LLP, as auditors of the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended) occurred during the fourth quarter of the one-year period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

107

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Shareholders of Welltower Inc.

     We have audited Welltower Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria, 2013 framework). Welltower Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

     A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of certain acquisitions, which are included in the 2015 consolidated financial statements of Welltower Inc. and aggregate to 4% of total assets at December 31, 2015 and less than 1% of revenues and net operating income for the year then ended. Our audit of the internal control over financial reporting of Welltower Inc. also did not include an evaluation of the internal control over financial reporting of the aforementioned acquisitions.

     In our opinion, Welltower Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Welltower Inc. as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015 of Welltower Inc. and our report dated February 18, 2016 expressed an unqualified opinion thereon.

       /s/  Ernst & Young LLP

Toledo, Ohio

February 18, 2016

Item 9B. Other Information

     None.

108

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated herein by reference to the information under the headings “Election of Directors,” “Corporate Governance,” “Executive Officers,” and “Security Ownership of Directors and Management and Certain Beneficial Owners — Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement, which will be filed with the Securities and Exchange Commission (the “Commission”) prior to April 29, 2016.

We have adopted a Code of Business Conduct & Ethics that applies to our directors, officers and employees. The code is posted on the Internet at www.welltower.com/#investors/governance. Any amendment to, or waivers from, the code that relate to any officer or director of the Company will be promptly disclosed on the Internet at www.welltower.com.

In addition, the Board has adopted charters for the Audit, Compensation and Nominating/Corporate Governance Committees. These charters are posted on the Internet at www.welltower.com/#investors/governance.

The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

Item 11.  Executive Compensation

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

Item 12.  Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters

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

Item 13.  Certain Relationships and Related Transactions and DirectorIndependence 

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

Item 14.  Principal Accounting Fees and Services

The information required by this Item is incorporated herein by reference to the information under the heading “Ratification of the Appointment of the Independent Registered Public Accounting Firm” in our definitive proxy statement, which will be filed with the Commission prior to April 29, 2016.

109

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1.           Our Consolidated Financial Statements are included in Part II,Item 8: 

Report of Independent Registered Public Accounting Firm	73
Consolidated Balance Sheets – December 31, 2015 and 2014	74
Consolidated Statements of  Comprehensive Income — Years ended  December 31, 2015, 2014 and  2013	75
Consolidated Statements of  Equity — Years ended  December 31, 2015, 2014 and  2013	77
Consolidated Statements of  Cash Flows — Years ended  December 31, 2015, 2014 and  2013	78
Notes to Consolidated Financial Statements	79

     2.            The following Financial Statement Schedules are included inItem 15(c): 

                    III – Real Estate and Accumulated Depreciation

                    IV – Mortgage Loans on Real Estate

The financial statement schedule required by Item15(a) (Schedule II, Valuation and Qualifying Accounts) is included in Item 8 of this Annual Report on Form 10-K.

     3.            Exhibit Index:                                                                                                                                 

The information required by this item is set forth on the Exhibit Index that follows the Financial Statement Schedules to this Annual Report on Form 10-K.

(b)           Exhibits: 

The exhibits listed on the Exhibit Index are either filed with this Form 10-K or incorporated by reference in accordance with Rule 12b-32 of the Securities Exchange Act of 1934.

(c)           Financial Statement Schedules:

Financial statement schedules are included beginning on page 112.

110

SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  February 18, 2016

WELLTOWER INC.

                                                                                                                   By: /s/  T homas J. DeRosa                                             

                                                                                                                           Thomas J. DeRosa,

                                                                                                                           Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 18, 2016 by the following persons on behalf of the Registrant and in the capacities indicated.

/s/  Jeffrey H. Donahue **	/s/  Sergio D. Rivera **
Jeffrey H. Donahue, Chairman of the Board	Sergio D. Rivera, Director
/s/  Kenneth J. Bacon **	/s/  R. Scott Trumbull **
Kenneth J. Bacon, Director	R. Scott Trumbull, Director
/s/  Fred S. Klipsch **	/s/  Thomas J. DeRosa **
Fred S. Klipsch, Director	Thomas J. DeRosa, Chief Executive Officer and Director
	(Principal Executive Officer)
/s/  Geoffrey G. Meyers**	/s/  Scott A. Estes **
Geoffrey G. Meyers, Director	Scott A. Estes, Executive Vice President and Chief
	Financial Officer (Principal Financial Officer)
/s/  Timothy J. Naughton**	/s/  Paul D. Nungester, Jr.**
Timothy J. Naughton, Director	Paul D. Nungester, Jr., Senior Vice President and
	Controller (Principal Accounting Officer)
/s/  Sharon M. Oster **	**By:            /s/  Thomas J. DeRosa
Sharon M. Oster, Director	Thomas J. DeRosa, Attorney-in-Fact
/s/  Judith C. Pelham **
Judith C. Pelham, Director

111

Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2015
(Dollars in thousands)				Initial Cost to Company						Gross Amount at Which Carried at Close of Period
Description		Encumbrances		Land		Building & Improvements		Cost Capitalized Subsequent to Acquisition		Land		Building & Improvements		Accumulated Depreciation(1)	Year Acquired	Year Built	Address
Triple-net:
Abilene, TX	$	-	$	950	$	20,987	$	40	$	950	$	21,027	$	844	2014	2006	6565 Central Park Boulevard
Abilene, TX		-		990		8,187		800		990		8,987		278	2014	1998	1250 East N 10th Street
Aboite Twp, IN		-		1,770		19,930		1,601		1,770		21,531		2,918	2010	1984	611 W County Line Rd South
Agawam, MA		-		880		16,112		2,134		880		18,246		6,765	2002	1900	1200 Suffield St.
Agawam, MA		-		1,230		13,618		593		1,230		14,211		1,971	2011	1996	61 Cooper Street
Agawam, MA		-		930		15,304		292		930		15,596		2,084	2011	1975	55 Cooper Street
Agawam, MA		-		920		10,661		36		920		10,697		1,509	2011	1970	464 Main Street
Agawam, MA		-		920		10,562		45		920		10,607		1,496	2011	1985	65 Cooper Street
Akron, OH		-		290		8,219		491		290		8,710		2,608	2005	1967	721 Hickory St.
Akron, OH		-		630		7,535		229		630		7,764		2,072	2006	1961	209 Merriman Road
Albertville, AL		1,986		170		6,203		280		176		6,477		1,234	2010	1982	151 Woodham Dr.
Alexandria, IN		-		190		6,491		-		190		6,491		215	2014	1915	1912 South Park Avenue
Alliance, OH		-		270		7,723		107		270		7,830		2,223	2006	1923	1785 Freshley Ave.
Ames, IA		-		330		8,870		-		330		8,870		1,357	2010	1974	1325 Coconino Rd.
Anderson, SC		-		710		6,290		419		710		6,709		2,786	2003	1999	311 Simpson Rd.
Andover, MA		-		1,310		12,647		27		1,310		12,674		1,843	2011	1982	89 Morton Street
Annapolis, MD		-		1,010		24,825		151		1,010		24,976		3,221	2011	1986	35 Milkshake Lane
Ansted, WV		-		240		14,113		108		240		14,221		1,802	2011	1993	106 Tyree Street,   P.O. Drawer 400
Apple Valley, CA		10,445		480		16,639		168		486		16,801		3,340	2010	2001	11825 Apple Valley Rd.
Asheboro, NC		-		290		5,032		165		290		5,197		1,774	2003	1991	514 Vision Dr.
Asheville, NC		-		204		3,489		-		204		3,489		1,617	1999	1988	4 Walden Ridge Dr.
Asheville, NC		-		280		1,955		351		280		2,306		880	2003	1999	308 Overlook Rd.
Aspen Hill, MD		-		-		9,008		1,180		-		10,188		1,384	2011	1998	3227 Bel Pre Road
Atchison, KS		-		140		5,610		-		140		5,610		-	2015	1992	1301 N 4th St,
Atlanta, GA		7,429		2,058		14,914		1,143		2,080		16,035		10,896	1997	1999	1460 S Johnson Ferry Rd.
Aurora, OH		-		1,760		14,148		106		1,760		14,254		2,090	2011	2002	505 S. Chillicothe Rd
Aurora, CO		-		2,600		5,906		7,915		2,600		13,821		4,638	2006	1988	14101 E. Evans Ave.
Aurora, CO		-		2,440		28,172		-		2,440		28,172		7,909	2006	2007	14211 E. Evans Ave.
Austin, TX		18,411		880		9,520		1,216		885		10,731		4,775	1999	1998	12429 Scofield Farms Dr.
Aventura, FL		-		4,540		33,986		438		4,540		34,424		3,073	2012	2001	2777 NE 183rd Street
Avon, IN		-		1,830		14,470		-		1,830		14,470		2,311	2010	2004	182 S Country RD. 550E
Avon, IN		-		900		19,444		-		900		19,444		634	2014	2013	10307 E. CR 100 N
Avon Lake, OH		-		790		10,421		5,822		790		16,243		1,725	2011	1985	345 Lear Rd.
Ayer, MA		-		-		22,074		3		-		22,077		2,862	2011	1988	400 Groton Road
Baldwin City, KS		-		190		4,810		-		190		4,810		-	2015	2008	321 Crimson Ave
Baltic, OH		-		50		8,709		189		50		8,898		2,482	2006	2009	130 Buena Vista St.
Baltimore, MD		-		1,350		14,884		320		1,350		15,204		2,059	2011	1905	115 East Melrose Avenue
Baltimore, MD		-		900		5,039		147		900		5,186		828	2011	1969	6000 Bellona Avenue
Bartlesville, OK		-		100		1,380		-		100		1,380		731	1996	2012	5420 S.E. Adams Blvd.
Beachwood, OH		-		1,260		23,478		-		1,260		23,478		8,952	2001	1990	3800 Park East Drive
Beattyville, KY		-		100		6,900		660		100		7,560		2,158	2005	2001	249 E. Main St.
Bedford, NH		-		2,250		28,831		5		2,250		28,836		3,718	2011	2012	25 Ridgewood Road
Bellingham, WA		8,429		1,500		19,861		321		1,507		20,175		3,900	2010	1990	4415 Columbine Dr.
Benbrook, TX		-		1,550		13,553		769		1,550		14,322		1,687	2011	1984	4242 Bryant Irvin Road
Bend, OR		-		1,210		9,181		-		1,210		9,181		164	2015	2008	1801 NE Lotus Drive
Bethel Park, PA		-		1,700		16,007		-		1,700		16,007		2,962	2007	1997	5785 Baptist Road
Beverly Hills, CA		9,404		6,000		13,385		-		6,000		13,385		398	2014	1999	220 N Clark Drive
Bexleyheath, UKI		-		4,483		12,917		-		4,483		12,917		372	2014	2002	35 West Street
Birmingham, UKG		-		1,969		17,754		-		1,969		17,754		346	2015	2010	Clinton Street, Winson Green
Birmingham, UKG		-		1,902		22,820		-		1,902		22,820		438	2015	1997	Braymoor Road, Tile Cross
Birmingham, UKG		-		1,747		10,824		-		1,747		10,824		214	2015	1971	Clinton Street, Winson Green
Birmingham, UKG		-		1,416		12,054		-		1,416		12,054		233	2015	2002	122 Tile Cross Road, Garretts Green
Bloomington, IN		-		670		17,423		-		670		17,423		165	2015	2000	363 S. Fieldstone Boulevard
Bluefield, VA		-		900		12,463		32		900		12,495		1,658	2011	2006	Westwood Medical Park
Boardman, OH		-		1,200		12,800		-		1,200		12,800		3,016	2008	1999	8049 South Ave.
Boca Raton, FL		-		1,440		31,048		893		1,440		31,941		2,802	2012	1968	1080 Northwest 15th Street
Boonville, IN		-		190		5,510		-		190		5,510		2,078	2002	1987	1325 N. Rockport Rd.
Bowling Green, KY		-		3,800		26,700		149		3,800		26,849		5,080	2008	2009	1300 Campbell Lane
Bradenton, FL		-		252		3,298		-		252		3,298		1,761	1996	1986	6101 Pointe W. Blvd.
Bradenton, FL		-		480		9,953		-		480		9,953		923	2012	1995	2800 60th Avenue West
Braintree, MA		-		170		7,157		1,290		170		8,447		8,236	1997	2002	1102 Washington St.
Braintree, UKH		-		-		15,893		-		-		15,893		560	2014	2009	Meadow Park Tortoiseshell Way
Brandon, MS		-		1,220		10,241		-		1,220		10,241		1,450	2010	2011	140 Castlewoods Blvd
Brecksville, OH		-		990		19,353		-		990		19,353		623	2014	1978	8757 Brecksville Road
Bremerton, WA		-		390		2,210		144		390		2,354		548	2006	2009	3231 Pine Road
Bremerton, WA		-		830		10,420		950		830		11,370		1,637	2010	1972	3201 Pine Road NE
Bremerton, WA		-		590		2,899		13		590		2,912		140	2014	1965	3210 Rickey Road
Brick, NJ		-		1,290		25,247		529		1,290		25,776		2,957	2011	1999	458 Jack Martin Blvd.
Brick, NJ		-		1,170		17,372		1,285		1,183		18,645		2,474	2010	1999	515 Jack Martin Blvd
Brick, NJ		-		690		17,125		5,312		692		22,436		2,328	2010	1973	1594 Route 88
Brick, NJ		-		3,160		8,496		-		3,160		8,496		25	2015	1988	475 Jack Martin Boulevard
Bridgewater, NJ		-		1,850		3,050		-		1,850		3,050		1,367	2004	1996	875 Route 202/206 North
Bridgewater, NJ		-		1,730		48,201		1,123		1,749		49,304		6,343	2010	1982	2005 Route 22 West
Bridgewater, NJ		-		1,800		31,810		471		1,800		32,281		3,668	2011	1990	680 US-202/206 North
Broadview Heights, OH		-		920		12,400		2,393		920		14,793		5,059	2001	2005	2801 E. Royalton Rd.
Brookfield, WI		-		1,300		12,830		-		1,300		12,830		746	2012	1883	1185 Davidson Road
Brooklyn Park, MD		-		1,290		16,329		29		1,290		16,358		2,193	2011	1995	613 Hammonds Lane
Brooks, AB		1,996		376		4,951		-		376		4,951		157	2014	1992	951 Cassils Road West
Brookville, IN		-		300		13,461		-		300		13,461		419	2014	1900	11049 State Road 101
Buckhurst Hill, UKH		-		13,861		58,858		-		13,861		58,858		1,234	2015	1900	High Road
Burleson, TX		-		670		13,985		250		670		14,235		1,774	2011	1984	300 Huguley Boulevard
Burleson, TX		-		3,150		10,437		-		3,150		10,437		437	2012	1989	621 Old Highway 1187
Burlington, NC		-		280		4,297		707		280		5,004		1,678	2003	2012	3619 S. Mebane St.
Burlington, NC		-		460		5,467		-		460		5,467		1,883	2003	1990	3615 S. Mebane St.
Burlington, NC		-		810		11,257		-		810		11,257		364	2014	2009	2766 Grand Oaks Blvd
Burlington, NJ		-		1,700		12,554		466		1,700		13,020		1,970	2011	1900	115 Sunset Road
Burlington, NJ		-		1,170		19,205		167		1,170		19,372		2,464	2011	1998	2305 Rancocas Road
Burlington, WA		-		3,860		31,722		-		3,860		31,722		691	2015	2000	400 Gilkey Road
Burnaby, BC		8,119		7,623		13,844		-		7,623		13,844		445	2014	2006	7195 Canada Way
Byrdstown, TN		-		-		2,414		1,534		1,265		2,683		1,917	2004	2003	129 Hillcrest Dr.
Calgary, AB		16,917		2,341		42,768		-		2,341		42,768		1,306	2014	1993	1729-90th Avenue SW
Calgary, AB		28,055		4,569		70,199		-		4,569		70,199		2,123	2014	2001	500 Midpark Way SE
Cambridge, MD		-		490		15,843		207		490		16,050		2,091	2011	1998	525 Glenburn Avenue
Camrose, AB		13,824		1,019		20,678		-		1,019		20,678		596	2014	1972	6821-50 Avenue
Canton, MA		-		820		8,201		263		820		8,464		5,133	2002	2009	One Meadowbrook Way
Canton, NC		-		130		5,357		700		130		6,057		156	2014	1957	27 North Main Street
Canton, OH		-		300		2,098		-		300		2,098		967	1998	1973	1119 Perry Dr., N.W.
Cape Coral, FL		-		530		3,281		-		530		3,281		1,240	2002	2015	911 Santa Barbara Blvd.
Cape Coral, FL		8,894		760		18,868		-		760		18,868		1,768	2012	1990	831 Santa Barbara Boulevard
Cape May Court House, NJ		-		1,440		17,002		1,155		1,440		18,157		735	2014	1991	144 Magnolia Drive
Carmel, IN		-		1,700		19,491		-		1,700		19,491		322	2015	2001	12315 Pennsylvania Street
Carrollton, TX		-		4,280		31,444		734		4,280		32,178		1,668	2013	1996	2105 North Josey Lane
Carson City, NV		-		520		8,238		250		520		8,488		491	2013	2008	1111 W. College Parkway
Cary, NC		-		1,500		4,350		986		1,500		5,336		2,312	1998	2002	111 MacArthur
Castleton, IN		-		920		15,137		-		920		15,137		512	2014	2014	8405 Clearvista Lake
Catonsville, MD		-		1,330		15,003		549		1,330		15,552		2,088	2011	2013	16 Fusting Avenue
Cedar Grove, NJ		-		1,830		10,939		10		1,830		10,949		1,538	2011	1900	25 East Lindsley Road
Cedar Grove, NJ		-		2,850		27,737		20		2,850		27,757		3,667	2011	2001	536 Ridge Road
Centreville, MD(2)		-		600		14,602		241		600		14,843		1,982	2011	2001	205 Armstrong Avenue
Chapel Hill, NC		-		354		2,646		783		354		3,429		1,268	2002	1979	100 Lanark Rd.
Chapel Hill, NC		-		470		7,512		906		470		8,418		270	2014	1965	405 Smith Level Road
Charles Town, WV		-		230		22,834		29		230		22,863		2,867	2011	2015	219 Prospect Ave
Charleston, WV		-		440		17,575		298		440		17,873		2,249	2011	1985	1000 Association Drive, North Gate Business Park
Charleston, WV		-		410		5,430		14		410		5,444		778	2011	1997	699 South Park Road
Chatham, VA		-		320		14,039		-		320		14,039		494	2014	1997	100 Rorer Street
Chelmsford, MA		-		1,040		10,951		1,499		1,040		12,450		3,712	2003	2005	4 Technology Dr.
Chester, VA		-		1,320		18,127		-		1,320		18,127		618	2014	1998	12001 Iron Bridge Road
Chicago, IL		-		1,800		19,256		-		1,800		19,256		1,916	2012	1998	6700 South Keating Avenue
Chicago, IL		-		2,900		17,016		-		2,900		17,016		1,717	2012	1997	4239 North Oak Park Avenue
Chickasha, OK		-		85		1,395		-		85		1,395		733	1996	2005	801 Country Club Rd.
Cinnaminson, NJ		-		860		6,663		149		860		6,812		1,026	2011	2001	1700 Wynwood Drive
Citrus Heights, CA		14,506		2,300		31,876		589		2,300		32,465		6,427	2010	1998	7418 Stock Ranch Rd.
Claremore, OK		-		155		1,427		6,130		155		7,557		1,037	1996	1972	1605 N. Hwy. 88
Clarks Summit, PA		-		600		11,179		15		600		11,194		1,563	2011	1999	100 Edella Road
Clarks Summit, PA		-		400		6,529		54		400		6,583		936	2011	1974	150 Edella Road
Clarksville, TN		-		330		2,292		-		330		2,292		1,050	1998	2002	2183 Memorial Dr.
Clayton, NC		-		520		15,733		-		520		15,733		480	2014	2011	84 Johnson Estate Road
Cleburne, TX		-		520		5,369		-		520		5,369		1,234	2006	1997	402 S Colonial Drive
Clevedon, UKK		-		3,392		20,233		-		3,392		20,233		712	2014	1988	18/19 Elton Road
Cleveland, TN		-		350		5,000		122		350		5,122		2,068	2001	1998	2750 Executive Park N.W.
Clinton, MD		-		2,330		20,876		591		2,330		21,467		2,170	2012	2006	7520 Surratts Road
Cloquet, MN		-		340		4,660		120		340		4,780		566	2011	1997	705 Horizon Circle
Cobham, UKJ		-		11,723		29,871		-		11,723		29,871		1,888	2013	1983	Redhill Road
Colchester, CT		-		980		4,860		495		980		5,355		874	2011	1996	59 Harrington  Court
Colorado Springs, CO		-		4,280		62,168		-		4,280		62,168		534	2015	1997	1605 Elm Creek View
Colts Neck, NJ		-		780		14,733		1,147		1,016		15,644		2,127	2010	1965	3 Meridian Circle
Columbia, TN		-		341		2,295		-		341		2,295		1,058	1999	1987	5011 Trotwood Ave.
Columbia, TN		-		590		3,787		-		590		3,787		1,719	2003	1986	1410 Trotwood Ave.
Columbia, SC		-		2,120		4,860		5,709		2,120		10,569		3,826	2003	2001	731 Polo Rd.
Columbia Heights, MN		-		825		14,175		163		825		14,338		1,601	2011	1900	3807 Hart Boulevard
Columbus, IN		-		610		3,190		-		610		3,190		500	2010	1990	2564 Foxpointe Dr.
Columbus, OH		-		530		5,170		8,255		1,070		12,885		3,637	2005	1967	1425 Yorkland Rd.
Columbus, OH		-		1,010		5,022		-		1,010		5,022		1,565	2006	2000	1850 Crown Park Ct.
Columbus, OH		-		1,010		4,931		13,620		1,860		17,701		4,946	2006	2009	5700 Karl Rd.
Columbus, IN		-		530		6,710		-		530		6,710		2,377	2002	2013	2011 Chapa Dr.
Concord, NC		-		550		3,921		55		550		3,976		1,516	2003	1989	2452 Rock Hill Church Rd.
Concord, NH		-		780		18,423		446		780		18,869		2,378	2011	2010	20 Maitland Street
Concord, NH		-		1,760		43,179		568		1,760		43,747		5,518	2011	2013	239 Pleasant Street
Concord, NH		-		720		3,041		340		720		3,381		529	2011	1998	227 Pleasant Street
Congleton, UKD		-		2,433		6,120		-		2,433		6,120		176	2014	2009	Rood Hill
Conroe, TX		-		980		7,771		-		980		7,771		1,278	2009	1968	903 Longmire Road
Conyers, GA		-		2,740		19,302		227		2,740		19,529		1,725	2012	2000	1504 Renaissance Drive
Coppell, TX		-		1,550		8,386		-		1,550		8,386		253	2012	1964	1530 East Sandy Lake Road
Cortland, NY		-		700		18,041		58		700		18,099		1,518	2012	1997	839 Bennie Road
Coventry, UKG		-		2,345		16,530		-		2,345		16,530		332	2015	1998	Banner Lane, Tile Hill
Crawfordsville, IN		-		720		17,239		1,426		720		18,665		599	2014	1997	517 Concord Road
Crown Point, IN		-		920		20,044		-		920		20,044		285	2015	1970	1555 South Main Street
Dallas, OR		-		410		9,427		-		410		9,427		160	2015	1986	664 SE Jefferson
Daniels, WV		-		200		17,320		50		200		17,370		2,194	2011	1997	1631 Ritter Drive
Danville, VA		-		410		3,954		722		410		4,676		1,634	2003	1984	149 Executive Ct.
Danville, VA		-		240		8,436		-		240		8,436		293	2014	2001	508 Rison Street
Daphne, AL		-		2,880		8,670		127		2,880		8,797		876	2012	2006	27440 County Road 13
Dedham, MA		-		1,360		9,830		-		1,360		9,830		3,964	2002	1972	10 CareMatrix Dr.
Defuniak Springs, FL		-		1,350		10,250		-		1,350		10,250		2,751	2006	2007	785 S. 2nd St.
Denton, TX		-		1,760		8,305		-		1,760		8,305		1,025	2010	1986	2125 Brinker Rd
Derby, UKF		-		-		-		12,600		2,728		9,872		82	2014	1997	Rykneld Road
Dover, DE		-		400		7,717		38		400		7,755		1,075	2011	1999	1203 Walker Road
Dover, DE		-		600		22,266		90		600		22,356		2,886	2011	2001	1080 Silver Lake Blvd.
Drayton Valley, AB		-		614		10,198		-		614		10,198		292	2014	1999	3902-47 Street
Dresher, PA		-		2,060		40,236		917		2,083		41,130		5,259	2010	1980	1405 N. Limekiln Pike
Dundalk, MD(2)		-		1,770		32,047		784		1,770		32,831		4,198	2011	1996	7232 German Hill Road
Durham, NC		-		1,476		10,659		2,196		1,476		12,855		10,052	1997	2015	4434 Ben Franklin Blvd.
Dyer, IN		-		1,800		25,061		-		1,800		25,061		178	2015	2008	1532 Calumet Avenue
Eagan, MN		17,000		2,260		31,643		-		2,260		31,643		137	2015	1980	3810 Alder Avenue
East Brunswick, NJ		-		1,380		34,229		619		1,380		34,848		3,925	2011	2003	606 Cranbury Rd.
East Norriton, PA		-		1,200		28,129		1,084		1,262		29,151		3,776	2010	2002	2101 New Hope St
Eastbourne, UKJ		-		4,866		29,210		-		4,866		29,210		1,013	2014	2015	Carew Road
Easton, MD		-		900		24,539		-		900		24,539		3,266	2011	1999	610 Dutchman's Lane
Eatontown, NJ		-		1,190		23,358		68		1,190		23,426		3,088	2011	1982	3 Industrial Way East
Eden, NC		-		390		4,877		-		390		4,877		1,701	2003	1968	314 W. Kings Hwy.
Edmond, OK		-		410		8,388		-		410		8,388		877	2012	1998	15401 North Pennsylvania Avenue
Edmond, OK		-		1,810		14,849		112		1,810		14,961		618	2014	1996	1225 Lakeshore Drive
El Paso, TX		-		1,420		12,394		284		1,420		12,678		529	2014	1988	435 S Mesa Hills Drive
Elizabeth City, NC		-		200		2,760		2,011		200		4,771		1,928	1998	1997	400 Hastings Lane
Elizabethton, TN		-		310		4,604		336		310		4,940		2,012	2001	1976	1200 Spruce Lane
Emeryville, CA		-		2,560		57,491		-		2,560		57,491		2,206	2014	1981	1440 40th Street
Englewood, NJ		-		930		4,514		17		930		4,531		658	2011	2002	333 Grand Avenue
Englishtown, NJ		-		690		12,520		987		765		13,431		1,849	2010	2006	49 Lasatta Ave
Erin, TN		-		440		8,060		134		440		8,194		3,196	2001	1962	242 Rocky Hollow Rd.
Eugene, OR		-		800		5,822		-		800		5,822		102	2015	1999	4550 West Amazon Drive
Eureka, KS		-		50		3,950		-		50		3,950		-	2015	2010	1820 E River St
Everett, WA		-		1,400		5,476		-		1,400		5,476		2,428	1999	1998	2015 Lake Heights Dr.
Fair Lawn, NJ		-		2,420		24,504		444		2,420		24,948		3,253	2011	1991	12-15 Saddle River Road
Fairfield, CA		-		1,460		14,040		1,541		1,460		15,581		5,530	2002	1991	3350 Cherry Hills St.
Fairhope, AL		-		570		9,119		-		570		9,119		904	2012	1973	50 Spring Run Road
Fall River, MA		-		620		5,829		4,856		620		10,685		4,708	1996	1908	1748 Highland Ave.
Fall River, MA		-		920		34,715		208		920		34,923		4,498	2011	2012	4901 North Main Street
Fanwood, NJ		-		2,850		55,175		818		2,850		55,993		6,238	2011	2015	295 South Ave.
Faribault, MN		-		780		11,539		-		780		11,539		50	2015	1980	828 1st Street NE
Farnborough, UKJ		-		2,433		6,857		-		2,433		6,857		192	2014	1987	Bruntile Close, Reading Road
Fayetteville, PA		-		2,150		32,951		-		2,150		32,951		362	2015	2015	6375 Chambersburg Road
Fayetteville, GA		-		560		12,665		309		560		12,974		1,116	2012	1983	1967 Highway 54 West
Fayetteville, NY		-		410		3,962		500		410		4,462		1,652	2001	2011	5125 Highbridge St.
Findlay, OH		-		200		1,800		-		200		1,800		891	1997	1999	725 Fox Run Rd.
Fishers, IN		-		1,500		14,500		-		1,500		14,500		2,315	2010	1993	9745 Olympia Dr.
Florence, NJ		-		300		2,978		-		300		2,978		1,120	2002	1997	901 Broad St.
Florence, AL		6,985		353		13,049		200		385		13,217		2,542	2010	1998	3275 County Road 47
Flourtown, PA		-		1,800		14,830		203		1,800		15,033		2,011	2011	2009	350 Haws Lane
Flower Mound, TX		-		1,800		8,414		-		1,800		8,414		254	2011	1999	4141 Long Prairie Road
Follansbee, WV		-		640		27,670		49		640		27,719		3,541	2011	2000	840 Lee Road
Folsom, CA		-		-		33,600		-		1,582		32,018		2,129	2013	2010	330 Montrose Drive
Forest City, NC		-		320		4,497		-		320		4,497		1,586	2003	1987	493 Piney Ridge Rd.
Fort Ashby, WV		-		330		19,566		123		330		19,689		2,464	2011	2011	Diane Drive, Box 686
Fort Collins, CO		-		3,680		58,608		-		3,680		58,608		502	2015	2001	4750 Pleasant Oak Drive
Fort Wayne, IN		-		170		8,232		-		170		8,232		1,926	2006	1994	2626 Fairfield Ave.
Fort Worth, TX		-		450		13,615		5,086		450		18,701		2,417	2010	1902	425 Alabama Ave.
Franconia, NH		-		360		11,320		70		360		11,390		1,491	2011	2000	93 Main Street
Franklin, NH		-		430		15,210		47		430		15,257		1,978	2011	1999	7 Baldwin Street
Frederick, MD		-		-		-		18,942		2,550		16,392		78	2013	1999	347 Ballenger Center Drive
Fredericksburg, VA		-		1,000		20,000		1,200		1,000		21,200		5,796	2005	2012	3500 Meekins Dr.
Fredericksburg, VA		-		590		28,611		35		590		28,646		3,632	2011	1962	11 Dairy Lane
Fredericksburg, VA		-		3,700		22,016		59		3,700		22,075		1,856	2012	2012	12100 Chancellors Village
Fredericksburg, VA		-		1,130		23,202		-		1,130		23,202		728	2014	2014	140 Brimley Drive
Fredonia, KS		-		40		460		-		40		460		-	2015	1990	2111 E Washington St
Fremont, CA		18,860		3,400		25,300		3,203		3,456		28,447		7,578	2005	1980	2860 Country Dr.
Fresno, CA		-		2,500		35,800		118		2,500		35,918		6,803	2008	1992	7173 North Sharon Avenue
Gambrills, MD		-		2,500		16,726		-		2,500		16,726		765	2012	2014	1219 Waugh Chapel Road
Gardner, MA		-		480		10,210		27		480		10,237		1,402	2011	2009	32 Hospital Hill Road
Gardner, KS		-		200		2,800		-		200		2,800		-	2015	1998	869 Juniper Terrace
Gardnerville, NV		12,189		1,143		10,831		1,075		1,164		11,885		8,346	1998	1996	1565-A Virginia Ranch Rd.
Gastonia, NC		-		470		6,129		-		470		6,129		2,100	2003	2005	1680 S. New Hope Rd.
Gastonia, NC		-		310		3,096		22		310		3,118		1,141	2003	1978	1717 Union Rd.
Gastonia, NC		-		400		5,029		120		400		5,149		1,780	2003	2002	1750 Robinwood Rd.
Georgetown, TX		-		200		2,100		-		200		2,100		1,027	1997	1997	2600 University Dr., E.
Gettysburg, PA		-		590		8,913		90		590		9,003		1,295	2011	2007	867 York Road
Gig Harbor, WA		5,120		1,560		15,947		253		1,583		16,177		3,043	2010	1905	3213 45th St. Court NW
Glastonbury, CT		-		1,950		9,532		909		2,360		10,031		1,420	2011	2001	72 Salmon Brook Drive
Glen Mills, PA		-		690		9,110		165		690		9,275		1,276	2011	1997	549 Baltimore Pike
Glenside, PA		-		1,940		16,867		153		1,940		17,020		2,265	2011	2000	850 Paper Mill Road
Graceville, FL		-		150		13,000		-		150		13,000		3,393	2006	1991	1083 Sanders Ave.
Grafton, WV		-		280		18,824		37		280		18,861		2,374	2011	2007	8 Rose Street
Granbury, TX		-		2,040		30,670		149		2,040		30,819		3,824	2011	1900	100 Watermark Boulevard
Granbury, TX		-		2,550		2,940		400		2,550		3,340		362	2012	1998	916 East Highway 377
Grand Ledge, MI		-		1,150		16,286		5,119		1,150		21,405		2,568	2010	2013	4775 Village Dr
Granger, IN		-		1,670		21,280		2,401		1,670		23,681		3,154	2010	2001	6330 North Fir Rd
Grapevine, TX		-		-		-		19,692		2,220		17,472		220	2013	1999	4545 Merlot Drive
Grass Valley, CA		4,268		260		7,667		170		260		7,837		426	2013	2001	415 Sierra College Drive
Greendale, WI		-		2,060		35,383		522		2,060		35,905		3,566	2012	2006	5700 Mockingbird Lane
Greeneville, TN		-		400		8,290		507		400		8,797		2,882	2004	2005	106 Holt Ct.
Greenfield, WI		-		-		15,204		-		890		14,314		885	2013	1993	5017 South 110th Street
Greensboro, NC		-		330		2,970		554		330		3,524		1,262	2003	1966	5809 Old Oak Ridge Rd.
Greensboro, NC		-		560		5,507		1,013		560		6,520		2,316	2003	2007	4400 Lawndale Dr.
Greensboro, NC		-		350		6,634		572		350		7,206		230	2014	1987	5918 Netfield Road
Greenville, SC		-		310		4,750		-		310		4,750		1,572	2004	1980	23 Southpointe Dr.
Greenville, NC		-		290		4,393		168		290		4,561		1,559	2003	1996	2715 Dickinson Ave.
Greenwood, IN		-		1,550		22,770		81		1,550		22,851		3,138	2010	1992	2339 South SR 135
Groton, CT		-		2,430		19,941		895		2,430		20,836		2,912	2011	1996	1145 Poquonnock Road
Haddonfield, NJ		-		-		-		16,883		520		16,363		288	2011	2004	132 Warwick Road
Hamburg, PA		-		840		10,543		191		840		10,734		1,595	2011	2009	125 Holly Road
Hamilton, NJ		-		440		4,469		-		440		4,469		1,667	2001	1994	1645 Whitehorse-Mercerville Rd.
Hanford, UKG		-		1,652		11,748		-		1,652		11,748		750	2013	1999	Bankhouse Road
Hanover, IN		-		210		4,430		-		210		4,430		1,499	2004	1999	188 Thornton Rd
Harleysville, PA		-		960		11,355		-		960		11,355		1,999	2008	2000	695 Main Street
Harriman, TN		-		590		8,060		158		590		8,218		3,374	2001	2015	240 Hannah Rd.
Harrow, UKI		-		8,848		9,880		-		8,848		9,880		296	2014	1997	177 Preston Hill
Hatboro, PA		-		-		28,112		1,746		-		29,858		3,706	2011	2000	3485 Davisville Road
Hatfield, UKH		-		3,495		8,997		-		3,495		8,997		579	2013	2007	St Albans Road East
Haverford, PA		-		1,880		33,993		836		1,883		34,826		4,449	2010	2014	731 Old Buck Lane
Hemet, CA		-		870		3,405		-		870		3,405		760	2007	2009	25818 Columbia St.
Hemet, CA		-		1,890		28,606		985		1,899		29,582		8,109	2010	2014	1001 N. Lyon Ave
Hemet, CA		-		430		9,630		921		430		10,551		1,705	2010	1977	1001 N. Lyon Ave
Herne Bay, UKJ		-		2,271		29,109		-		2,271		29,109		2,196	2013	1996	165 Reculver Road
Hiawatha, KS		-		40		4,210		-		40		4,210		-	2015	2009	400 Kansas Ave
Hickory, NC		-		290		987		232		290		1,219		581	2003	1988	2530 16th St. N.E.
High Point, NC		-		560		4,443		793		560		5,236		1,838	2003	2015	1568 Skeet Club Rd.
High Point, NC		-		370		2,185		410		370		2,595		973	2003	2009	1564 Skeet Club Rd.
High Point, NC		-		330		3,395		28		330		3,423		1,211	2003	2001	201 W. Hartley Dr.
High Point, NC		-		430		4,143		-		430		4,143		1,452	2003	1996	1560 Skeet Club Rd.
High River, AB		-		954		34,317		-		954		34,317		985	2014	1966	660 7th Street
Highland Park, IL		-		2,820		15,832		189		2,820		16,021		1,293	2011	2012	1651 Richfield Avenue
Highlands Ranch, CO		-		940		3,721		4,983		940		8,704		1,666	2002	2012	9160 S. University Blvd.
Hilltop, WV		-		480		25,355		15		480		25,370		3,247	2011	1994	Saddle Shop Road
Hinckley, UKF		-		2,581		5,013		-		2,581		5,013		353	2013	2009	Tudor Road
Hockessin, DE		-		1,120		6,308		889		1,120		7,197		279	2014	1989	100 Saint Claire Drive
Hollywood, FL		-		1,240		13,806		436		1,240		14,242		1,257	2012	2013	3880 South Circle Drive
Holton, KS		-		40		7,460		-		40		7,460		-	2015	1994	410 Juniper Dr
Homestead, FL		-		2,750		11,750		-		2,750		11,750		3,137	2006	1998	1990 S. Canal Dr.
Houston, TX		-		5,090		9,471		-		5,090		9,471		1,882	2007	1986	15015 Cypress Woods Medical Drive
Howell, NJ		9,470		1,066		21,577		270		1,069		21,844		2,900	2010	2014	100 Meridian Place
Huntington, WV		-		800		32,261		126		800		32,387		4,155	2011	1999	101 13th Street
Huron, OH		-		160		6,088		1,452		160		7,540		2,028	2005	1981	1920 Cleveland Rd. W.
Hurricane, WV		-		620		21,454		804		620		22,258		2,862	2011	2012	590 N Poplar Fork Road
Hutchinson, KS		-		600		10,590		194		600		10,784		3,173	2004	1900	2416 Brentwood
Indianapolis, IN		-		495		6,287		22,565		495		28,852		9,194	2006	2001	8616 W. Tenth St.
Indianapolis, IN		-		255		2,473		12,123		255		14,596		4,552	2006	1984	8616 W.Tenth St.
Indianapolis, IN		-		870		14,688		-		870		14,688		499	2014	1999	1635 N Arlington Avenue
Indianapolis, IN		-		890		18,781		-		890		18,781		570	2014	1966	5404 Georgetown Road
Jackson, NJ		-		6,500		26,405		2,193		6,500		28,598		2,346	2012	1988	2 Kathleen Drive
Jacksonville Beach, FL		-		1,210		26,207		472		1,210		26,679		2,282	2012	1999	1700 The Greens Way
Jamestown, TN		-		-		6,707		508		-		7,215		5,289	2004	2010	208 N. Duncan St.
Jefferson, OH		-		80		9,120		-		80		9,120		2,664	2006	1964	222 Beech St.
Jupiter, FL		-		3,100		47,453		563		3,100		48,016		3,950	2012	2014	110 Mangrove Bay Way
Kansas City, KS		-		700		20,116		-		700		20,116		45	2015	1968	8900 Parallel Parkway
Keene, NH		-		530		9,639		284		530		9,923		1,259	2011	2014	677 Court Street
Kenner, LA		-		1,100		10,036		328		1,100		10,364		8,040	1998	2009	1600 Joe Yenni Blvd
Kennesaw, GA		-		940		10,848		388		940		11,236		1,006	2012	1999	5235 Stilesboro Road
Kennett Square, PA		-		1,050		22,946		239		1,083		23,151		2,993	2010	1928	301 Victoria Gardens Dr.
Kennewick, WA		-		1,820		27,991		715		1,834		28,692		6,421	2010	1998	2802 W 35th Ave
Kent, WA		-		940		20,318		10,470		940		30,788		6,082	2007	1998	24121 116th Avenue SE
Kirkland, WA		-		1,880		4,315		683		1,880		4,998		1,554	2003	2014	6505 Lakeview Dr.
Kirkstall, UKE		-		2,912		11,253		-		2,912		11,253		720	2013	1980	29 Broad Lane
Kokomo, IN		-		710		16,044		-		710		16,044		544	2014	2000	2200 S. Dixon Rd
Laconia, NH		-		810		14,434		496		810		14,930		1,963	2011	1981	175 Blueberry Lane
Lafayette, CO		-		1,420		20,192		-		1,420		20,192		288	2015	1900	329 Exempla Circle
Lafayette, IN		-		670		16,833		-		670		16,833		375	2015	2010	2402 South Street
Lafayette, LA		-		1,928		10,483		25		1,928		10,509		3,650	2006	1993	204 Energy Parkway
Lake Barrington, IL		-		3,400		66,179		46		3,400		66,225		5,448	2012	1999	22320 Classic Court
Lake Zurich, IL		-		1,470		9,830		-		1,470		9,830		1,245	2011	1900	550 America Court
Lakeway, TX		-		5,142		18,574		3,029		5,142		21,603		1,214	2007	2005	2000 Medical Dr
Lakewood, CO		-		2,160		28,091		49		2,160		28,140		1,350	2014	1900	7395 West Eastman Place
Lakewood Ranch, FL		-		650		6,714		1,988		650		8,702		751	2011	1998	8230 Nature's Way
Lakewood Ranch, FL		6,981		1,000		22,388		-		1,000		22,388		2,059	2012	2007	8220 Natures Way
Lancaster, CA		9,742		700		15,295		625		712		15,907		3,391	2010	2012	43051 15th St. West
Lancaster, PA		-		890		7,623		79		890		7,702		1,142	2011	1999	336 South West End Ave
Lancaster, NH		-		430		15,804		160		430		15,964		2,059	2011	1986	91 Country Village Road
Lancaster, NH		-		160		434		28		160		462		116	2011	2013	63 Country Village Road
Langhorne, PA		-		1,350		24,881		117		1,350		24,998		3,316	2011	1900	262 Toll Gate Road
LaPlata, MD(2)		-		700		19,068		466		700		19,534		2,563	2011	1900	One Magnolia Drive
Las Vegas, NV		-		580		23,420		-		580		23,420		2,715	2011	1969	2500 North Tenaya Way
Lawrence, KS		3,497		250		8,716		-		250		8,716		792	2012	1998	3220 Peterson Road
Lebanon, NH		-		550		20,138		64		550		20,202		2,612	2011	1989	24 Old Etna Road
Lecanto, FL		-		200		6,900		-		200		6,900		2,191	2004	2007	2341 W. Norvell Bryant Hwy.
Lee, MA		-		290		18,135		926		290		19,061		7,035	2002	1905	600 & 620 Laurel St.
Leeds, UKE		-		2,359		15,824		-		2,359		15,824		276	2015	2011	100 Grove Lane
Leicester, UKF		-		3,657		29,177		-		3,657		29,177		2,309	2012	2001	307 London Road
Lenoir, NC		-		190		3,748		641		190		4,389		1,533	2003	1984	1145 Powell Rd., N.E.
Leominster, MA		-		530		6,201		25		530		6,226		945	2011	1900	44 Keystone Drive
Lethbridge, AB		1,487		1,214		2,750		-		1,214		2,750		113	2014	1996	785 Columbia Boulevard West
Lethbridge, AB		3,052		618		6,855		-		618		6,855		197	2014	2012	1730 10th Avenue
Lewisburg, WV		-		260		3,699		70		260		3,769		572	2011	1997	331 Holt Lane
Lexana, KS		-		480		1,770		-		480		1,770		-	2015	1900	8710 Caenen Lake Rd
Lexington, KY		-		1,980		21,258		-		1,980		21,258		692	2014	2000	2531 Old Rosebud Road
Lexington, NC		-		200		3,900		1,015		200		4,915		1,780	2002	2002	161 Young Dr.
Libertyville, IL		-		6,500		40,024		-		6,500		40,024		5,165	2011	2005	901 Florsheim Dr
Lichfield, UKG		-		1,652		36,246		-		1,652		36,246		701	2015	2007	Wissage Road
Lillington, NC		-		470		17,579		-		470		17,579		575	2014	1900	54 Red Mulberry Way
Lillington, NC		-		500		16,451		-		500		16,451		506	2014	1900	2041 NC-210 N
Lincoln, NE		-		390		13,807		-		390		13,807		2,059	2010	1971	7208 Van Dorn St.
Linwood, NJ		-		800		21,984		799		838		22,745		3,041	2010	2003	432 Central Ave
Linwood, NJ		-		2,310		14,912		-		2,310		14,912		37	2015	1900	201 New Road
Litchfield, CT		-		1,240		17,908		10,893		1,250		28,792		2,504	2010	2008	19 Constitution Way
Little Neck, NY		-		3,350		38,461		1,176		3,357		39,630		5,138	2010	1997	55-15 Little Neck Pkwy.
Livermore, CA		9,837		4,100		24,996		-		4,100		24,996		740	2014	2015	35 Fenton Street
Loganville, GA		-		1,430		22,912		557		1,430		23,469		2,174	2012	1900	690 Tommy Lee Fuller Drive
London, UKI		-		20,792		182,448		-		20,792		182,448		3,824	2015	2006	53 Parkside
London, UKI		-		4,719		32,497		-		4,719		32,497		681	2015	2013	49 Parkside
London, UKI		-		6,046		13,355		-		6,046		13,355		280	2015	1998	17-19 View Road
Longview, TX		-		610		5,520		-		610		5,520		1,278	2006	1999	311 E Hawkins Pkwy
Longwood, FL		-		1,260		6,445		-		1,260		6,445		792	2011	2009	425 South Ronald Reagan Boulevard
Louisburg, KS		-		280		4,320		-		280		4,320		-	2015	1995	202 Rogers St
Louisville, KY		-		490		10,010		2,768		490		12,778		3,822	2005	1998	4604 Lowe Rd
Louisville, KY		-		430		7,135		163		430		7,298		3,007	2002	1991	2529 Six Mile Lane
Louisville, KY		-		350		4,675		133		350		4,808		2,010	2002	1999	1120 Cristland Rd.
Lowell, MA		-		1,070		13,481		103		1,070		13,584		1,887	2011	1987	841 Merrimack Street
Lowell, MA		-		680		3,378		30		680		3,408		579	2011	1997	30 Princeton Blvd
Loxley, UKE		-		1,637		18,727		-		1,637		18,727		1,405	2013	1999	Loxley Road
Lutherville, MD		-		1,100		19,786		1,579		1,100		21,365		2,706	2011	2013	515 Brightfield Road
Lynchburg, VA		-		340		16,114		-		340		16,114		532	2014	1986	189 Monica Blvd
Macungie, PA		-		960		29,033		16		960		29,049		3,700	2011	1968	1718 Spring Creek Road
Mahwah, NJ		-		-		-		28,844		1,605		27,239		408	2012	1978	15 Edison Road
Manahawkin, NJ		-		1,020		20,361		122		1,020		20,483		2,694	2011	2012	1361 Route 72 West
Manalapan, NJ		-		900		22,624		257		900		22,881		2,592	2011	1985	445 Route 9 South
Manassas, VA		-		750		7,446		530		750		7,976		2,513	2003	1997	8341 Barrett Dr.
Manchester, NH		-		1,080		3,059		581		1,080		3,640		122	2014	2009	191 Hackett Hill Road
Mankato, MN		12,839		1,460		32,104		-		1,460		32,104		138	2015	1996	100 Dublin Road
Mansfield, TX		-		660		5,251		-		660		5,251		1,229	2006	1998	2281 Country Club Dr
Manteca, CA		5,987		1,300		12,125		1,566		1,312		13,679		4,039	2005	2001	430 N. Union Rd.
Marianna, FL		-		340		8,910		-		340		8,910		2,319	2006	1971	2600 Forest Glenn Tr.
Marietta, GA		-		1,270		10,519		447		1,270		10,966		962	2012	1975	3039 Sandy Plains Road
Marietta, PA		-		1,050		13,633		-		1,050		13,633		150	2015	2001	2760 Maytown Road
Marion, IN		-		720		12,750		1,136		720		13,886		446	2014	2000	614 W. 14th Street
Marion, IN		-		990		9,190		824		990		10,014		382	2014	2014	505 N. Bradner Avenue
Marlborough, UKK		-		3,200		8,155		-		3,200		8,155		239	2014	1984	The Common
Marlinton, WV		-		270		8,430		11		270		8,441		1,135	2011	2003	Stillwell Road, Route 1
Marlton, NJ		-		-		38,300		2,894		-		41,194		7,404	2008	1989	92 Brick Road
Marmet, WV		-		540		26,483		-		540		26,483		3,322	2011	2011	1 Sutphin Drive
Martinsburg, WV		-		340		17,180		50		340		17,230		2,178	2011	2009	2720 Charles Town Road
Martinsville, VA		-		349		-		-		349		-		-	2003	1998	Rolling Hills Rd. & US Hwy. 58
Marysville, WA		4,436		620		4,780		903		620		5,683		1,738	2003	2013	9802 48th Dr. N.E.
Matawan, NJ		-		1,830		20,618		7		1,830		20,625		2,360	2011	1995	625 State Highway 34
Matthews, NC		-		560		4,738		-		560		4,738		1,699	2003	1995	2404 Plantation Center Dr.
McHenry, IL		-		1,576		-		-		1,576		-		-	2006	1998	5200 Block of Bull Valley Road
McKinney, TX		-		1,570		7,389		-		1,570		7,389		1,237	2009	2013	2701 Alma Rd.
McMinnville, OR		-		720		7,984		-		720		7,984		138	2015	1994	3121 NE Cumulus Avenue
McMurray, PA		-		1,440		15,805		3,601		1,440		19,406		1,998	2010	2000	240 Cedar Hill Dr
Mechanicsburg, PA		-		1,350		16,650		-		1,350		16,650		1,976	2011	1965	4950 Wilson Lane
Medicine Hat, AB		2,440		932		5,566		-		932		5,566		180	2014	1999	65 Valleyview Drive SW
Melbourne, FL		-		7,070		48,257		13,444		7,070		61,701		9,939	2007	1975	7300 Watersong Lane
Melville, NY		-		4,280		73,283		3,798		4,292		77,069		9,676	2010	1997	70 Pinelawn Rd
Memphis, TN		-		940		5,963		-		940		5,963		2,327	2004	1998	1150 Dovecrest Rd.
Mendham, NJ		-		1,240		27,169		633		1,240		27,802		3,514	2011	1900	84 Cold Hill Road
Menomonee Falls, WI		-		1,020		6,984		1,652		1,020		8,636		1,602	2006	2011	W128 N6900 Northfield Drive
Mercerville, NJ		-		860		9,929		116		860		10,045		1,411	2011	1997	2240 White Horse- Merceville Road
Meriden, CT		-		1,300		1,472		5		1,300		1,477		428	2011	1998	845 Paddock Ave
Meridian, ID		-		3,600		20,802		251		3,600		21,053		7,193	2006	1978	2825 E. Blue Horizon Dr.
Merrillville, IN		-		700		11,699		154		700		11,853		2,457	2007	1976	9509 Georgia St.
Mesa, AZ		5,913		950		9,087		801		950		9,888		4,076	1999	2001	7231 E. Broadway
Middleburg Heights, OH		-		960		7,780		-		960		7,780		2,366	2004	1999	15435 Bagley Rd.
Middleton, WI		-		420		4,006		600		420		4,606		1,575	2001	1997	6701 Stonefield  Rd.
Middletown, RI		-		1,480		19,703		-		1,480		19,703		2,629	2011	2014	333 Green End Avenue
Midland, MI		-		200		11,025		5,522		200		16,547		1,681	2010	2001	2325 Rockwell Dr
Milford, DE		-		400		7,816		39		400		7,855		1,087	2011	1994	500 South DuPont Boulevard
Milford, DE		-		680		19,216		58		680		19,274		2,552	2011	2001	700 Marvel Road
Mill Creek, WA		27,255		10,150		60,274		935		10,179		61,179		14,264	2010	2007	14905 Bothell-Everett Hwy
Millville, NJ		-		840		29,944		104		840		30,048		3,891	2011	2010	54 Sharp Street
Milton Keynes, UKJ		-		2,182		22,296		-		2,182		22,296		444	2015	1994	Tunbridge Grove, Kents Hill
Milwaukie, OR		-		400		6,782		-		400		6,782		117	2015	1995	5770 SE Kellogg Creek Drive
Mishawaka, IN		-		740		16,114		-		740		16,114		557	2014	2001	60257 Bodnar Blvd
Missoula, MT		-		550		7,490		377		550		7,867		2,151	2005	1987	3620 American Way
Monclova, OH		-		1,750		11,868		-		1,750		11,868		1,034	2011	1996	6935 Monclova Road
Monmouth Junction, NJ		-		720		6,209		57		720		6,266		929	2011	1988	2 Deer Park Drive
Monroe, NC		-		470		3,681		648		470		4,329		1,549	2003	2009	918 Fitzgerald St.
Monroe, NC		-		310		4,799		857		310		5,656		1,911	2003	1951	919 Fitzgerald St.
Monroe, NC		-		450		4,021		114		450		4,135		1,478	2003	1999	1316 Patterson Ave.
Monroe, WA		-		2,560		34,460		519		2,584		34,955		6,720	2010	2008	15465 179th Ave. SE
Monroe Township, NJ		-		3,250		27,771		-		3,250		27,771		-	2015	2012	319 Forsgate Drive
Monroe Twp, NJ		-		1,160		13,193		75		1,160		13,268		1,873	2011	1994	292 Applegarth Road
Monteagle, TN		-		310		3,318		-		310		3,318		1,401	2003	1965	218 Second St., N.E.
Monterey, TN		-		-		4,195		410		-		4,605		3,324	2004	1980	410 W. Crawford Ave.
Montville, NJ		-		3,500		31,002		575		3,500		31,577		3,635	2011	1999	165 Changebridge Rd.
Moorestown, NJ		-		2,060		51,628		1,134		2,065		52,757		6,768	2010	2012	1205 N. Church St
Moorestown, NJ		-		6,400		23,875		-		6,400		23,875		1,119	2012	1999	250 Marter Avenue
Morehead City, NC		-		200		3,104		1,648		200		4,752		1,926	1999	1988	107 Bryan St.
Morgantown, KY		-		380		3,705		615		380		4,320		1,534	2003	1981	206 S. Warren St.
Morgantown, WV		-		190		15,633		20		190		15,653		1,664	2011	2010	161 Bakers Ridge Road
Morton Grove, IL		-		1,900		19,374		159		1,900		19,533		2,146	2010	1999	5520 N. Lincoln Ave.
Mount Pleasant, SC		-		-		17,200		-		4,052		13,149		1,304	2013	2008	1200 Hospital Drive
Mount Vernon, WA		-		3,440		21,842		1,623		3,440		23,465		689	2014	1998	1810 E. Division Street
Mountain City, TN		-		220		5,896		660		220		6,556		4,484	2001	1987	919 Medical Park Dr.
Moyock, NC		-		280		13,381		-		280		13,381		428	2014	1976	141 Moyock Landing Drive
Mt. Vernon, WA		-		400		2,200		156		400		2,356		564	2006	2007	3807 East College Way
Murphy, TX		-		1,950		19,182		-		1,950		19,182		164	2015	1998	304 West FM 544
Nacogdoches, TX		-		390		5,754		-		390		5,754		1,325	2006	1988	5902 North St
Naperville, IL		-		3,470		29,547		-		3,470		29,547		3,886	2011	2004	504 North River Road
Naples, FL		-		1,716		17,306		2,075		1,738		19,358		16,781	1997	2013	1710 S.W. Health Pkwy.
Naples, FL		-		550		5,450		-		550		5,450		1,866	2004	1999	2900 12th St. N.
Nashville, TN		-		4,910		29,590		-		4,910		29,590		5,944	2008	2002	15 Burton Hills Boulevard
Nashville, TN		-		4,500		12,287		-		4,500		12,287		1,008	2011	2009	832 Wedgewood Ave
Naugatuck, CT		-		1,200		15,826		176		1,200		16,002		2,127	2011	1994	4 Hazel Avenue
Needham, MA		-		1,610		13,715		366		1,610		14,081		5,791	2002	2011	100 West St.
Neodesha, KS		-		20		430		-		20		430		-	2015	2010	400 Fir St
New Braunfels, TX		-		1,200		19,800		9,397		2,729		27,668		2,633	2011	2011	2294 East Common Street
New Haven, IN		-		176		3,524		-		176		3,524		1,434	2004	1995	1201 Daly Dr.
New Moston, UKD		-		1,770		5,233		-		1,770		5,233		349	2013	1999	90a Broadway
Newark, DE		-		560		21,220		1,488		560		22,708		6,364	2004	1997	200 E. Village Rd.
Newcastle Under Lyme, UKG		-		1,327		6,760		-		1,327		6,760		430	2013	2014	Hempstalls Lane
Newcastle-under-Lyme, UKG		-		1,345		6,618		-		1,345		6,618		194	2014	1900	Silverdale Road
Newport, VT		-		290		3,867		-		290		3,867		572	2011	1999	35 Bel-Aire Drive
Norman, OK		-		55		1,484		-		55		1,484		844	1995	1998	1701 Alameda Dr.
Norman, OK		-		1,480		33,330		-		1,480		33,330		3,001	2012	2011	800 Canadian Trails Drive
Norristown, PA		-		1,200		19,488		1,762		1,200		21,250		2,682	2011	1900	1700 Pine Street
North Andover, MA		-		950		21,817		53		950		21,870		2,842	2011	1996	140 Prescott Street
North Andover, MA		-		1,070		17,341		1,303		1,070		18,644		2,452	2011	1996	1801 Turnpike Street
North Augusta, SC		-		332		2,558		-		332		2,558		1,169	1999	1994	105 North Hills Dr.
North Bend, OR		-		1,290		7,361		-		1,290		7,361		129	2015	1991	2290 Inland Drive
North Cape May, NJ		-		600		22,266		36		600		22,302		2,882	2011	1981	700 Townbank Road
North Cape May, NJ		-		630		13,556		-		630		13,556		157	2015	2001	3809 Bayshore Road
North Cape May, NJ		-		77		151		-		77		151		-	2015	1990	610 Town Bank Road
Northampton, UKF		-		6,193		20,736		-		6,193		20,736		1,373	2013	2001	Cliftonville Road
Northampton, UKF		-		2,407		7,479		-		2,407		7,479		288	2014	2013	Cliftonville Road
Nuneaton, UKG		-		3,974		10,737		-		3,974		10,737		684	2013	2007	132 Coventry Road
Nuthall, UKF		-		1,946		7,486		-		1,946		7,486		256	2014	1991	172A Nottingham Road
Nuthall, UKF		-		2,986		12,474		-		2,986		12,474		803	2013	1900	172 Nottingham Road
Oak Hill, WV		-		240		24,506		-		240		24,506		3,068	2011	1998	422 23rd Street
Oak Hill, WV		-		170		721		-		170		721		198	2011	1999	438 23rd Street
Oakland, CA		-		4,760		16,143		-		4,760		16,143		639	2014	1994	468 Perkins Street
Ocala, FL		-		1,340		10,564		-		1,340		10,564		1,870	2008	1988	2650 SE 18TH Avenue
Ogden, UT		-		360		6,700		699		360		7,399		2,135	2004	2014	1340 N. Washington Blv.
Oklahoma City, OK		-		590		7,513		-		590		7,513		1,554	2007	2007	13200 S. May Ave
Oklahoma City, OK		-		760		7,017		-		760		7,017		1,380	2007	1979	11320 N. Council Road
Olds, AB		-		222		7,688		-		222		7,688		219	2014	2005	5600 Sunrise Crescent
Olds, AB		-		580		13,142		-		580		13,142		259	2015	1989	3300 57th Avenue
Olympia, WA		6,397		550		16,689		298		553		16,984		3,266	2010	2008	616 Lilly Rd. NE
Omaha, NE		-		370		10,230		-		370		10,230		1,550	2010	2006	11909 Miracle Hills Dr.
Omaha, NE		-		380		8,864		-		380		8,864		1,399	2010	2009	5728 South 108th St.
Ona, WV		-		950		15,998		-		950		15,998		140	2015	2009	100 Weatherholt Drive
Oneonta, NY		-		80		5,020		-		80		5,020		1,061	2007	1999	1846 County Highway 48
Orem, UT		-		2,150		24,107		-		2,150		24,107		157	2015	1995	250 East Center Street
Ormond Beach, FL		-		-		2,739		452		-		3,191		1,941	2002	1993	103 N. Clyde Morris Blvd.
Orwigsburg, PA		-		650		20,632		134		650		20,766		2,715	2011	1998	1000 Orwigsburg Manor Drive
Osage City, KS		-		50		1,700		-		50		1,700		-	2015	2001	1403 Laing St
Osawatomie, KS		-		130		2,970		-		130		2,970		-	2015	1997	1520 Parker Ave
Ottawa, KS		-		160		6,590		-		160		6,590		-	2015	1965	2250 S Elm St
Overland Park, KS		-		3,730		27,076		340		3,730		27,416		4,641	2008	1997	12000 Lamar Avenue
Overland Park, KS		-		4,500		29,105		7,295		4,500		36,400		5,210	2010	1986	6101 W 119th St
Overland Park, KS		-		410		2,840		-		410		2,840		-	2015	1952	14430 Metcalf Ave
Owasso, OK		-		215		1,380		-		215		1,380		705	1996	2000	12807 E. 86th Place N.
Owensboro, KY		-		240		6,760		609		240		7,369		2,160	1993	1972	1614 W. Parrish Ave.
Owensboro, KY		-		225		13,275		-		225		13,275		4,076	2005	2008	1205 Leitchfield Rd.
Owenton, KY		-		100		2,400		-		100		2,400		906	2005	1968	905 Hwy. 127 N.
Oxford, MI		11,038		1,430		15,791		-		1,430		15,791		2,266	2010	1979	701 Market St
Palestine, TX		-		180		4,320		1,300		180		5,620		1,357	2006	2010	1625 W. Spring St.
Palm Coast, FL		-		870		10,957		-		870		10,957		1,804	2008	1998	50 Town Ct.
Paola, KS		-		190		5,610		-		190		5,610		-	2015	1900	601 N. East Street
Paris, TX		-		490		5,452		-		490		5,452		3,331	2005	1972	750 N Collegiate Dr
Parkersburg, WV		-		390		21,288		643		390		21,931		2,775	2011	2010	723 Summers Street
Parkville, MD		-		1,350		16,071		274		1,350		16,345		2,192	2011	1996	8710 Emge Road
Parkville, MD		-		791		11,186		3		791		11,189		1,549	2011	1988	8720 Emge Road
Parkville, MD		-		1,100		11,768		-		1,100		11,768		1,612	2011	2008	1801 Wentworth Road
Paso Robles, CA		-		1,770		8,630		693		1,770		9,323		3,370	2002	1997	1919 Creston Rd.
Passaic, NJ		-		2,750		9,982		-		2,750		9,982		26	2015	1998	56 Hamilton Avenue
Pella, IA		-		870		6,716		89		870		6,805		596	2012	1972	2602 Fifield Road
Pennington, NJ		-		1,380		27,620		752		1,465		28,287		3,162	2011	1900	143 West Franklin Avenue
Pennsauken, NJ		-		900		10,780		179		900		10,959		1,645	2011	2009	5101 North Park Drive
Petoskey, MI		-		860		14,452		-		860		14,452		1,946	2011	2006	965 Hager Dr
Pewaukee, WI		-		4,700		20,669		-		4,700		20,669		6,100	2007	1985	2400 Golf Rd.
Philadelphia, PA		-		2,700		25,709		332		2,700		26,041		3,432	2011	1905	184 Bethlehem Pike
Philadelphia, PA		-		2,930		10,433		3,373		2,930		13,806		1,899	2011	2005	1526 Lombard Street
Philadelphia, PA		-		540		11,239		65		540		11,304		1,446	2011	1963	8015 Lawndale Avenue
Philadelphia, PA		-		1,810		16,898		33		1,810		16,931		2,467	2011	2001	650 Edison Avenue
Phillipsburg, NJ		-		800		21,175		193		800		21,368		2,843	2011	1982	290 Red School Lane
Phillipsburg, NJ		-		300		8,114		37		300		8,151		1,084	2011	1985	843 Wilbur Avenue
Pigeon Forge, TN		-		320		4,180		117		320		4,297		1,833	2001	1992	415 Cole Dr.
Pinehurst, NC		-		290		2,690		484		290		3,174		1,176	2003	1990	17 Regional Dr.
Piqua, OH		-		204		1,885		-		204		1,885		889	1997	1998	1744 W. High St.
Pittsburgh, PA		-		1,750		8,572		115		1,750		8,687		2,636	2005	1998	100 Knoedler Rd.
Plainview, NY		-		3,990		11,969		560		3,990		12,529		1,581	2011	1998	150 Sunnyside Blvd
Plattsmouth, NE		-		250		5,650		-		250		5,650		900	2010	2001	1913 E. Highway 34
Plymouth, MI		-		1,490		19,990		129		1,490		20,119		2,742	2010	1980	14707 Northville Rd
Ponoka, AB		3,647		418		10,831		-		418		10,831		309	2014	2005	4004 40th Street Close
Port St. Joe, FL		-		370		2,055		-		370		2,055		1,159	2004	2001	220 9th St.
Port St. Lucie, FL		-		8,700		47,230		6,090		8,700		53,320		7,859	2008	1986	10685 SW Stony Creek Way
Post Falls, ID		-		2,700		14,217		2,181		2,700		16,398		3,233	2007	1994	460 N. Garden Plaza Ct.
Pottsville, PA		-		950		26,964		202		950		27,166		3,589	2011	1956	1000 Schuylkill Manor Road
Princeton, NJ		-		1,730		30,888		1,397		1,810		32,205		3,662	2011	2006	155 Raymond Road
Prior Lake, MN		14,250		1,870		29,849		-		1,870		29,849		128	2015	1972	4685 Park Nicollet Avenue
Puyallup, WA		11,136		1,150		20,776		445		1,156		21,216		4,180	2010	2004	123 Fourth Ave. NW
Quakertown, PA		-		1,040		25,389		72		1,040		25,461		3,291	2011	1997	1020 South Main Street
Raleigh, NC		24,091		3,530		59,589		-		3,530		59,589		5,110	2012	2004	5301 Creedmoor Road
Raleigh, NC		-		2,580		16,837		-		2,580		16,837		1,561	2012	2000	7900 Creedmoor Road
Reading, PA		-		980		19,906		102		980		20,008		2,627	2011	2007	5501 Perkiomen Ave
Red Bank, NJ		-		1,050		21,275		390		1,050		21,665		2,445	2011	1996	One Hartford Dr.
Rehoboth Beach, DE		-		960		24,248		8,562		973		32,796		3,420	2010	2010	36101 Seaside Blvd
Reidsville, NC		-		170		3,830		857		170		4,687		1,715	2002	1900	2931 Vance St.
Reno, NV		-		1,060		11,440		605		1,060		12,045		3,541	2004	1999	5165 Summit Ridge Road
Richardson, TX		-		1,800		16,562		-		1,800		16,562		303	2015	1980	1350 East Lookout Drive
Richmond, VA		-		-		12,000		-		250		11,750		835	2013	1900	2220 Edward Holland Drive
Ridgeland, MS		-		520		7,675		427		520		8,102		2,575	2003	2004	410 Orchard Park
Ridgely, TN		-		300		5,700		97		300		5,797		2,308	2001	1970	117 N. Main St.
Ridgewood, NJ		-		1,350		16,170		480		1,350		16,650		2,139	2011	1998	330 Franklin Turnpike
Rochdale, MA		-		-		7,100		-		690		6,410		444	2013	2004	111 Huntoon Memorial Highway
Rockledge, FL		-		360		4,117		-		360		4,117		1,953	2001	1997	1775 Huntington Lane
Rockville, MD		-		-		16,398		10		-		16,408		1,716	2012	1999	9701 Medical Center Drive
Rockville, CT		-		1,500		4,835		76		1,500		4,911		872	2011	1979	1253 Hartford Turnpike
Rockville Centre, NY		-		4,290		20,310		569		4,290		20,879		2,481	2011	1965	260 Maple Ave
Rockwall, TX		-		-		-		19,693		2,220		17,473		225	2012	1999	720 E Ralph Hall Parkway
Rockwood, TN		-		500		7,116		741		500		7,857		3,091	2001	1995	5580 Roane State Hwy.
Rocky Hill, CT		-		1,090		6,710		1,500		1,090		8,210		2,491	2003	1968	60 Cold Spring Rd.
Rogersville, TN		-		350		3,278		-		350		3,278		1,388	2003	1989	109 Hwy. 70 N.
Rohnert Park, CA		13,265		6,500		18,700		2,116		6,546		20,769		5,712	2005	2005	4855 Snyder Lane
Romeoville, IL		-		1,895		-		-		1,895		-		-	2006	1997	Grand Haven Circle
Roseburg, OR		-		1,200		4,891		-		1,200		4,891		85	2015	2004	1901 NW Hughwood Drive
Roseville, MN		-		2,140		24,679		-		2,140		24,679		107	2015	1993	2750 North Victoria Street
Roswell, GA		7,628		1,107		9,627		1,086		1,114		10,706		7,536	1997	2005	655 Mansell Rd.
Rugeley, UKG		-		2,271		12,266		-		2,271		12,266		827	2013	1961	Horse Fair
Ruston, LA		-		710		9,790		-		710		9,790		1,261	2011	2014	1401 Ezelle St
Rutland, VT		-		1,190		23,655		88		1,190		23,743		3,125	2011	1997	9 Haywood Avenue
Sacramento, CA		9,948		940		14,781		251		952		15,020		2,963	2010	2001	6350 Riverside Blvd
Salem, OR		-		449		5,171		-		449		5,172		2,342	1999	1988	1355 Boone Rd. S.E.
Salem, OR		-		440		4,726		-		440		4,726		83	2015	1987	3988 12th Street SE
Salisbury, NC		-		370		5,697		168		370		5,865		2,006	2003	2005	2201 Statesville Blvd.
San Angelo, TX		-		260		8,800		425		260		9,225		2,658	2004	2004	2695 Valleyview Blvd.
San Angelo, TX		-		1,050		24,689		16		1,050		24,705		986	2014	1992	6101 Grand Court Road
San Antonio, TX		-		6,120		28,169		2,124		6,120		30,293		3,514	2010	1998	2702 Cembalo Blvd
San Antonio, TX		-		-		17,303		-		-		17,303		5,758	2007	1990	8902 Floyd Curl Dr.
San Bernardino, CA		-		3,700		14,300		687		3,700		14,987		2,741	2008	2000	1760 W. 16th St.
San Diego, CA		-		-		22,003		1,845		-		23,848		4,279	2008	1964	555 Washington St.
San Ramon, CA		8,531		2,430		17,488		60		2,435		17,543		3,354	2010	2011	18888 Bollinger Canyon Rd
Sanatoga, PA		-		980		30,695		38		980		30,733		3,903	2011	1997	225 Evergreen Road
Sand Springs, OK		6,530		910		19,654		-		910		19,654		1,803	2012	2010	4402 South 129th Avenue West
Sarasota, FL		-		475		3,175		-		475		3,175		1,695	1996	2001	8450 McIntosh Rd.
Sarasota, FL		-		600		3,400		-		600		3,400		1,298	2004	1996	4602 Northgate Ct.
Sarasota, FL		-		3,360		19,140		-		3,360		19,140		2,175	2011	2011	6150 Edgelake Drive
Sarasota, FL		-		1,120		12,489		106		1,120		12,595		1,144	2012	2006	2290 Cattlemen Road
Sarasota, FL		-		950		8,825		535		950		9,360		827	2012	1988	3221 Fruitville Road
Sarasota, FL		-		880		9,854		182		880		10,036		946	2012	1990	3749 Sarasota Square Boulevard
Scott Depot, WV		-		350		6,876		58		350		6,934		956	2011	1995	5 Rolling Meadows
Scranton, PA		-		440		17,609		-		440		17,609		557	2014	1977	2741 Blvd. Ave
Scranton, PA		-		320		12,144		-		320		12,144		381	2014	1992	2751 Boulevard Ave
Seaford, DE		-		720		14,029		53		720		14,082		1,949	2011	1997	1100 Norman Eskridge Highway
Seaford, DE		-		830		7,995		1,547		830		9,542		887	2012	2005	715 East King Street
Seattle, WA		7,456		5,190		9,350		564		5,199		9,905		2,865	2010	1995	11501 15th Ave NE
Seattle, WA		-		3,420		15,555		205		3,420		15,760		3,332	2010	2001	2326 California Ave SW
Seattle, WA		-		2,630		10,257		666		2,630		10,923		2,283	2010	2000	4611 35th Ave SW
Seattle, WA		27,610		10,670		37,291		894		10,700		38,155		9,686	2010	2005	805 4th Ave N
Selbyville, DE		-		750		25,912		298		769		26,191		3,440	2010	2007	21111 Arrington Dr
Seven Fields, PA		-		484		4,663		60		484		4,722		2,144	1999	2011	500 Seven Fields Blvd.
Severna Park, MD(2)		-		2,120		31,273		808		2,120		32,081		4,037	2011	2001	24 Truckhouse Road
Shawnee, OK		-		80		1,400		-		80		1,400		738	1996	1998	3947 Kickapoo
Shelbyville, KY		-		630		3,870		630		630		4,500		1,226	2005	1992	1871 Midland Trail
Shelton, WA		-		530		17,049		296		530		17,345		1,673	2012	1900	900 W Alpine Way
Shepherdstown, WV		-		250		13,806		13		250		13,819		1,762	2011	2001	80 Maddex Drive
Sherman, TX		-		700		5,221		-		700		5,221		1,272	2005	2014	1011 E. Pecan Grove Rd.
Shillington, PA		-		1,020		19,569		956		1,020		20,525		2,652	2011	1998	500 E Philadelphia Ave
Shrewsbury, NJ		-		2,120		38,116		724		2,127		38,833		5,049	2010	1997	5 Meridian Way
Silver Spring, MD		-		1,250		7,278		269		1,250		7,547		802	2012	2009	2101 Fairland Road
Silvis, IL		-		880		16,420		139		880		16,559		2,358	2010	1998	1900 10th St.
Sissonville, WV		-		600		23,948		55		600		24,003		3,083	2011	1999	302 Cedar Ridge Road
Sisterville, WV		-		200		5,400		242		200		5,642		794	2011	1999	201 Wood Street
Sittingbourne, UKJ		-		1,622		7,815		-		1,622		7,815		220	2014	1950	200 London Road
Smithfield, NC		-		290		5,680		-		290		5,680		1,959	2003	2000	830 Berkshire Rd.
Smithfield, NC		-		360		8,216		-		360		8,216		256	2014	1989	250 Highway 210 West
Somerset, MA		-		1,010		29,577		151		1,010		29,728		3,788	2011	1979	455 Brayton Avenue
Sonoma, CA		14,497		1,100		18,400		1,700		1,109		20,090		5,507	2005	1987	800 Oregon St.
South Bend, IN		-		670		17,770		-		670		17,770		555	2014	1997	52565 State Road 933
South Boston, MA		-		385		2,002		5,218		385		7,220		3,320	1995	2003	804 E. Seventh St.
South Croydon, UKI		-		2,949		2,507		-		2,949		2,507		75	2014	1900	42-46 Bramley Hill
South Pittsburg, TN		-		430		5,628		-		430		5,628		2,077	2004	1998	201E. 10th St.
Southbury, CT		-		1,860		23,613		958		1,860		24,571		3,020	2011	2001	655 Main St
Sparks, NV		-		3,700		46,526		-		3,700		46,526		8,130	2007	1996	275 Neighborhood Way
Spencer, WV		-		190		8,810		28		190		8,838		1,170	2011	1952	825 Summit Street
Spring City, TN		-		420		6,085		3,210		420		9,295		3,344	2001	2013	331 Hinch St.
Spring House, PA		-		900		10,780		199		900		10,979		1,531	2011	2004	905 Penllyn Pike
Springfield, OR		-		1,790		8,865		-		1,790		8,865		153	2015	1989	770 Harlow Road
Springfield, IL		-		-		10,100		-		768		9,332		833	2013	2002	701 North Walnut Street
Springfield, IL		-		990		13,378		1,084		990		14,462		451	2014	1999	3089 Old Jacksonville Road
Spruce Pine, NC		-		240		8,340		676		240		9,016		287	2014	1986	13681 Highway 226 South
St. Charles, MD		-		580		15,555		84		580		15,639		2,079	2011	2008	4140 Old Washington Highway
St. Paul, MN		-		2,100		33,019		-		2,100		33,019		142	2015	1995	750 Mississippi River
Stamford, UKF		-		2,175		3,871		-		2,175		3,871		116	2014	1988	Priory Road
Stanwood, WA		-		2,260		28,474		467		2,283		28,918		5,829	2010	2009	7212 265th St NW
Statesville, NC		-		150		1,447		266		150		1,713		633	2003	1997	2441 E. Broad St.
Statesville, NC		-		310		6,183		8		310		6,191		2,068	2003	2008	2806 Peachtree Place
Statesville, NC		-		140		3,627		-		140		3,627		1,243	2003	1999	2814 Peachtree Rd.
Stillwater, OK		-		80		1,400		-		80		1,400		741	1995	1999	1616 McElroy Rd.
Stockton, CA		2,863		2,280		5,983		397		2,372		6,288		1,455	2010	2012	6725 Inglewood
Stratford-upon-Avon, UKG		-		944		17,341		-		944		17,341		335	2015	1997	Scholars Lane
Stroudsburg, PA		-		340		16,313		-		340		16,313		519	2014	2008	370 Whitestone Corner Road
Summit, NJ		-		3,080		14,152		-		3,080		14,152		1,843	2011	2005	41 Springfield Avenue
Superior, WI		-		1,020		13,735		6,159		1,020		19,894		1,282	2009	1952	1915 North 34th Street
Swanton, OH		-		330		6,370		-		330		6,370		2,062	2004	2005	401 W. Airport Hwy.
Takoma Park, MD		-		1,300		10,136		-		1,300		10,136		1,058	2012	1988	7525 Carroll Avenue
Terre Haute, IN		-		1,370		18,016		-		1,370		18,016		354	2015	1984	395 8th Avenue
Texarkana, TX		-		192		1,403		-		192		1,403		716	1996	1999	4204 Moores Lane
The Villages, FL		-		1,035		7,446		-		1,035		7,446		430	2013	2009	2450 Parr Drive
Tomball, TX		-		1,050		13,300		671		1,050		13,971		1,715	2011	2001	1221 Graham Dr
Toms River, NJ		-		1,610		34,627		708		1,679		35,265		4,631	2010	1971	1587 Old Freehold Rd
Toms River, NJ		-		4,180		7,707		-		4,180		7,707		20	2015	1965	1351 Old Freehold Road
Tonganoxie, KS		-		310		3,690		-		310		3,690		-	2015	1985	120 W 8th St
Topeka, KS		-		260		12,712		-		260		12,712		1,204	2012	1986	1931 Southwest Arvonia Place
Towson, MD(2)		-		1,180		13,280		195		1,180		13,475		1,819	2011	2002	7700 York Road
Troy, OH		-		200		2,000		4,254		200		6,254		1,672	1997	1993	81 S. Stanfield Rd.
Troy, OH		-		470		16,730		-		470		16,730		5,214	2004	1987	512 Crescent Drive
Trumbull, CT		-		4,440		43,384		-		4,440		43,384		5,393	2011	2002	6949 Main Street
Tucson, AZ		-		1,190		18,318		-		1,190		18,318		40	2015	1973	8151 E Speedway Boulevard
Tulsa, OK		-		3,003		6,025		20		3,003		6,045		2,927	2006	1992	3219 S. 79th E. Ave.
Tulsa, OK		-		1,390		7,110		462		1,390		7,572		1,239	2010	1990	7220 S. Yale Ave.
Tulsa, OK		-		1,320		10,087		-		1,320		10,087		296	2011	1975	7902 South Mingo Road East
Tyler, TX		-		650		5,268		-		650		5,268		1,224	2006	1996	5550 Old Jacksonville Hwy.
Uhrichsville, OH		-		24		6,716		-		24		6,716		1,882	2006	2003	5166 Spanson Drive S.E.
Uniontown, PA		-		310		6,817		84		310		6,901		936	2011	1965	75 Hikle Street
Upper Providence, PA		-		-		-		30,095		1,900		28,195		483	2013	2013	1133 Black Rock Road
Vacaville, CA		13,640		900		17,100		1,651		900		18,751		5,251	2005	2002	799 Yellowstone Dr.
Vallejo, CA		13,656		4,000		18,000		2,344		4,030		20,315		5,625	2005	1999	350 Locust Dr.
Vallejo, CA		7,257		2,330		15,407		310		2,330		15,717		3,321	2010	2007	2261 Tuolumne
Valley Falls, RI		-		1,080		7,433		10		1,080		7,443		1,024	2011	1997	100 Chambers Street
Valparaiso, IN		-		112		2,558		-		112		2,558		1,027	2001	1998	2601 Valparaiso St.
Valparaiso, IN		-		108		2,962		-		108		2,962		1,168	2001	1963	2501 Valparaiso St.
Vancouver, WA		11,427		1,820		19,042		270		1,821		19,311		3,855	2010	1974	10011 NE 118th Ave
Venice, FL		-		500		6,000		-		500		6,000		2,019	2004	2003	1240 Pinebrook Rd.
Venice, FL		-		1,150		10,674		-		1,150		10,674		1,811	2008	2000	1600 Center Rd.
Vero Beach, FL		-		263		3,187		-		263		3,187		1,246	2001	1900	420 4th Ct.
Vero Beach, FL		-		297		3,263		-		297		3,263		1,286	2001	2001	410 4th Ct.
Vero Beach, FL		-		2,930		40,070		15,112		2,930		55,182		10,691	2007	2001	7955 16th Manor
Virginia Beach, VA		-		1,540		22,593		-		1,540		22,593		719	2014	2013	5520 Indian River Rd
Voorhees, NJ		-		1,800		37,299		559		1,800		37,858		4,942	2011	1998	2601 Evesham Road
Voorhees, NJ(2)		-		1,900		26,040		894		1,900		26,934		3,515	2011	1998	3001 Evesham Road
Voorhees, NJ		-		3,100		25,950		-		3,100		25,950		2,207	2011	2005	113 South Route 73
Voorhees, NJ		-		3,700		24,312		1,490		3,847		25,655		1,667	2012	2005	311 Route 73
Wabash, IN		-		670		14,588		-		670		14,588		496	2014	2000	20 John Kissinger Drive
Waconia, MN		-		890		14,726		4,495		890		19,221		2,061	2011	1992	500 Cherry Street
Wake Forest, NC		-		200		3,003		1,742		200		4,745		1,974	1998	1988	611 S. Brooks St.
Walkersville, MD		-		1,650		15,103		-		1,650		15,103		1,535	2012	1999	56 West Frederick Street
Wall, NJ		-		1,650		25,350		2,361		1,690		27,671		3,000	2011	2009	2021 Highway 35
Wallingford, CT		-		490		1,210		59		490		1,269		283	2011	2002	35 Marc Drive
Walsall, UKG		-		1,416		10,234		-		1,416		10,234		209	2015	2004	Little Aston Road
Wamego, KS		-		40		2,510		-		40		2,510		-	2015	2009	1607 4th St
Wareham, MA		-		875		10,313		1,701		875		12,014		4,711	2002	2012	50 Indian Neck Rd.
Warren, NJ		-		2,000		30,810		478		2,000		31,288		3,504	2011	2013	274 King George Rd
Warwick, RI		-		1,530		18,564		170		1,530		18,734		2,514	2011	2015	660 Commonwealth Avenue
Watchung, NJ		-		1,920		24,880		901		1,976		25,724		2,885	2011	1900	680 Mountain Boulevard
Waukee, IA		-		1,870		31,878		1,075		1,870		32,953		2,829	2012	1999	1650 SE Holiday Crest Circle
Waxahachie, TX		-		650		5,763		-		650		5,763		1,204	2007	1900	1329 Brown St.
Weatherford, TX		-		660		5,261		-		660		5,261		1,232	2006	1900	1818 Martin Drive
Webster, NY		-		800		8,968		36		800		9,004		778	2012	2002	100 Kidd Castle Way
Webster, NY		-		1,300		21,127		9		1,300		21,136		1,753	2012	1988	200 Kidd Castle Way
Webster Groves, MO		-		1,790		15,425		-		1,790		15,425		1,368	2011	2002	45 E Lockwood Avenue
Wellingborough, UKF		-		1,770		6,841		-		1,770		6,841		184	2015	2011	159 Northampton
West Bend, WI		-		620		17,790		38		620		17,828		1,890	2010	1998	2130 Continental Dr
West Chester, PA		-		1,350		29,237		122		1,350		29,359		3,833	2011	2012	800 West Miner Street
West Chester, PA		-		3,290		42,258		594		3,290		42,852		4,266	2012	2003	1615 East Boot Road
West Chester, PA		-		600		11,894		5		600		11,899		1,210	2012	1991	1615 East Boot Road
West Orange, NJ		-		2,280		10,687		182		2,280		10,869		1,581	2011	1900	20 Summit Street
West Worthington, OH		-		510		5,090		-		510		5,090		1,479	2006	1900	111 Lazelle Rd., E.
Westerville, OH		-		740		8,287		3,105		740		11,392		8,069	1998	2001	690 Cooper Rd.
Westfield, IN(2)		-		890		15,964		-		890		15,964		538	2014	1988	937 E. 186th Street
Westfield, NJ		-		2,270		16,589		497		2,270		17,086		2,441	2011	1962	1515 Lamberts Mill Road
Westford, MA		-		920		13,829		205		920		14,034		1,898	2011	2008	3 Park Drive
Westlake, OH		-		1,330		17,926		-		1,330		17,926		6,923	2001	1999	27601 Westchester Pkwy.
Westmoreland, TN		-		330		1,822		2,640		330		4,462		1,837	2001	2012	1559 New Hwy. 52
Weston Super Mare, UKK		-		3,008		8,432		-		3,008		8,432		540	2013	1905	141b Milton Road
Westworth Village, TX		-		2,060		31,296		-		2,060		31,296		887	2014	1900	25 Leonard Trail
Wetaskiwin, AB		-		336		20,131		-		336		20,131		574	2014	1900	5430-37 A Avenue
White Lake, MI		9,970		2,920		20,179		92		2,920		20,271		2,821	2010	1900	935 Union Lake Rd
Whittier, CA		-		4,470		22,151		458		4,483		22,596		5,940	2010	1987	13250 E Philadelphia St
Wichita, KS		-		1,400		11,000		-		1,400		11,000		3,511	2006	2013	505 North Maize Road
Wichita, KS		-		860		8,873		-		860		8,873		265	2011	2005	10604 E 13th Street North
Wichita, KS		13,404		627		19,746		-		627		19,752		1,781	2012	2006	2050 North Webb Road
Wichita, KS		-		260		2,240		-		260		2,240		-	2015	2009	900 N Bayshore Dr
Wichita, KS		-		-		-		11,034		900		10,134		286	2011	1900	10604 E 13th Street North
Wichita Falls, TX		-		1,070		26,167		86		1,070		26,253		1,037	2014	1986	3908 Kell W Boulevard
Wilkes-Barre, PA		-		610		13,842		119		610		13,961		1,891	2011	1988	440 North River Street
Wilkes-Barre, PA		-		570		2,301		44		570		2,345		498	2011	1979	300 Courtright Street
Willard, OH		-		730		6,447		-		730		6,447		669	2011	2011	1050 Neal Zick
Williamsport, PA		-		300		4,946		373		300		5,319		734	2011	1993	1251 Rural Avenue
Williamsport, PA		-		620		8,487		438		620		8,925		1,284	2011	1999	1201 Rural Avenue
Williamstown, KY		-		70		6,430		-		70		6,430		1,994	2005	2012	201 Kimberly Lane
Willow Grove, PA		-		1,300		14,736		109		1,300		14,845		2,096	2011	1900	1113 North Easton Road
Wilmington, DE		-		800		9,494		57		800		9,551		1,339	2011	2000	810 S Broom Street
Wilmington, NC		-		210		2,991		-		210		2,991		1,348	1999	1993	3501 Converse Dr.
Wilmington, NC		-		400		15,356		-		400		15,356		502	2014	2013	3828 Independence Blvd
Wilmington, NC		-		610		6,575		587		610		7,162		264	2014	1970	3915 Stedwick Ct
Windsor, CT		-		2,250		8,539		1,843		2,250		10,382		1,462	2011	1997	One Emerson Drive
Windsor, CT		-		1,800		600		944		1,800		1,544		320	2011	2006	One Emerson Drive
Winston-Salem, NC		-		360		2,514		459		360		2,973		1,062	2003	1999	2980 Reynolda Rd.
Winter Garden, FL		-		1,350		7,937		-		1,350		7,937		672	2012	2015	720 Roper Road
Winter Haven, FL		-		710		10,038		236		710		10,274		422	2014	2000	650 North Lake Howard Drive
Witherwack, UKC		-		1,128		8,265		-		1,128		8,265		530	2013	1900	Whitchurch Road
Wolverhampton, UKG		-		1,880		7,982		-		1,880		7,982		516	2013	2001	378 Prestonwood Road
Worcester, MA		-		3,500		54,099		-		3,500		54,099		8,690	2007	2009	101 Barry Road
Worcester, MA		-		2,300		9,060		-		2,300		9,060		1,854	2008	1980	378 Plantation St.
Wyncote, PA		-		2,700		22,244		148		2,700		22,392		3,006	2011	1900	1245 Church Road
Wyncote, PA		-		1,610		21,256		214		1,610		21,470		2,751	2011	1900	8100 Washington Lane
Wyncote, PA		-		900		7,811		32		900		7,843		1,047	2011	1900	240 Barker Road
York, UKE		-		3,539		9,880		-		3,539		9,880		290	2014	1995	Rosetta Way, Boroughbridge Road
Youngsville, NC		-		380		10,689		-		380		10,689		340	2014	1991	100 Sunset Drive
Zionsville, IN		-		1,610		22,400		1,691		1,610		24,091		3,265	2010	1982	11755 N Michigan Rd
Triple-net total	$	554,014	$	1,003,748	$	10,800,837	$	600,549	$	1,032,860	$	11,372,276	$	1,539,032

112

113

Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2015
(Dollars in thousands)
				Initial Cost to Company						Gross Amount at Which Carried at Close of Period
Description		Encumbrances		Land		Building & Improvements		Cost Capitalized Subsequent to Acquisition		Land		Building & Improvements		Accumulated Depreciation(1)		Year Acquired	Year Built	Address
Seniors housing operating:
Acton, MA	$	-	$	-	$	31,346	$	748	$	4	$	32,089	$	3,299		2013	2008	10 Devon Drive
Agawam, MA		6,453		880		10,044		521		931		10,514		2,089		2011	1993	153 Cardinal Drive
Albuquerque, NM		-		1,270		20,837		1,324		1,275		22,156		4,393		2010	1985	500 Paisano St NE
Alhambra, CA		-		600		6,305		353		600		6,658		1,121		2011	1982	1118 N. Stoneman Ave.
Altrincham, UKD		-		5,685		29,221		91		5,061		29,936		4,161		2012	1999	295 Hale Road
Amherstview, ON		616		473		4,446		-		473		4,446		341		2015	1999	4567 Bath Road
Arlington, TX		21,484		1,660		37,395		1,184		1,677		38,561		7,452		2012	1999	1250 West Pioneer Parkway
Arnprior, ON		522		788		6,283		-		788		6,283		958		2013	2000	15 Arthur Street
Atlanta, GA		-		2,100		20,603		462		2,154		21,011		2,241		2014	2000	1000 Lenox Park Blvd NE
Austin, TX		-		1,560		21,413		22		1,560		21,435		1,282		2014	2013	11330 Farrah Lane
Austin, TX		-		4,200		74,850		-		4,200		74,850		1,951		2015	2014	4310 Bee Caves Road
Avon, CT		18,998		1,550		30,571		1,948		1,580		32,489		7,374		2011	1998	101 Bickford Extension
Azusa, CA		-		570		3,141		6,470		570		9,611		2,361		1998	1953	125 W. Sierra Madre Ave.
Bagshot, UKJ		-		5,928		35,673		-		5,928		35,673		5,502		2012	2009	14 - 16 London Road
Banstead, UKJ		-		8,781		54,836		9,357		7,992		64,981		8,432		2012	2009	Croydon Lane
Basingstoke, UKJ		-		4,088		22,502		-		4,088		22,502		1,023		2014	2009	Grove Road
Basking Ridge, NJ		-		2,356		37,710		604		2,377		38,293		4,836		2013	1987	404 King George Road
Bassett, UKJ		-		5,826		38,030		-		5,826		38,030		5,563		2013	2006	111 Burgess Road
Baton Rouge, LA		9,346		790		29,436		250		801		29,675		3,710		2013	1994	9351 Siegen Lane
Beaconsfield, UKJ		-		6,653		60,856		-		6,653		60,856		7,616		2013	2009	30-34 Station Road
Beaconsfield, QC		-		1,149		17,484		-		1,149		17,484		3,324		2013	2003	505 Elm Avenue
Bedford, NH		-		-		-		33,113		2,527		30,586		3,350		2011	1981	5 Corporate Drive
Bellevue, WA		-		2,800		19,004		925		2,809		19,919		3,300	��	2013	1970	15928 NE 8th Street
Belmont, CA		-		3,000		23,526		1,461		3,000		24,987		4,697		2011	2003	1301 Ralston Avenue
Belmont, CA		-		-		35,300		781		-		36,081		4,914		2013	1983	1010 Alameda de Las Pulgas
Bethesda, MD		-		-		45,309		388		3		45,694		5,986		2013	1900	8300 Burdett Road
Bethesda, MD		-		-		-		45		-		45		10		2013	1999	8300 Burdett Road
Bethesda, MD		-		-		-		212		-		212		21		2013	1984	8300 Burdett Road
Billerica, MA		-		1,619		21,381		-		1,619		21,381		1,227		2015	2013	20 Charnstaffe Lane
Birmingham, UKG		-		5		25,287		-		5		25,287		3,627		2013	2010	5 Church Road, Edgbaston
Blainville, QC		-		2,077		8,902		-		2,077		8,902		2,038		2013	2001	50 des Chateaux Boulevard
Bloomfield Hills, MI		-		2,000		35,662		394		2,000		36,056		4,563		2013	2009	6790 Telegraph Road
Borehamwood, UKH		-		7,074		41,060		7,965		6,416		49,683		6,237		2012	1988	Edgwarebury Lane
Bothell, WA		-		1,350		13,439		-		1,350		13,439		404		2015	2005	10605 NE 185th Street
Boulder, CO		-		2,994		27,458		1,304		3,014		28,742		4,765		2013	2009	3955 28th Street
Bournemouth, UKK		-		6,606		50,811		-		6,606		50,811		5,372		2013	1962	42 Belle Vue Road
Braintree, MA		21,006		-		41,290		448		36		41,702		5,638		2013	1995	618 Granite Street
Brampton, ON		27,998		9,939		62,711		-		9,939		62,711		623		2015	2007	100 Ken Whillans Drive
Brighton, MA		10,332		2,100		14,616		636		2,109		15,243		3,083		2011	1998	50 Sutherland Road
Brockport, NY		-		1,500		23,496		-		1,500		23,496		-		2015	2000	90 West Avenue
Brockville, ON		4,580		484		7,445		-		484		7,445		523		2015	1996	1026 Bridlewood Drive
Brookfield, CT		19,359		2,250		30,180		1,079		2,262		31,247		6,261		2011	2014	246A Federal Road
Broomfield, CO		-		4,140		44,547		10,339		8,611		50,414		9,339		2013	1900	400 Summit Blvd
Brossard, QC		11,428		5,228		33,507		-		5,228		33,507		304		2015	1983	2455 Boulevard Rome
Buckingham, UKJ		-		3,561		16,549		-		3,561		16,549		724		2014	2013	Church Street
Buffalo Grove, IL		-		2,850		49,129		462		2,850		49,591		6,550		2012	1996	500 McHenry Road
Burbank, CA		-		4,940		43,466		706		4,940		44,172		7,078		2012	2000	455 E. Angeleno Avenue
Burlington, ON		12,946		1,309		19,311		-		1,309		19,311		2,842		2013	2005	500 Appleby Line
Burlington, MA		-		2,443		34,354		626		2,522		34,901		4,973		2013	2003	24 Mall Road
Calabasas, CA		-		-		6,438		743		-		7,181		3,512		2013	2000	25100 Calabasas Road
Calgary, AB		12,640		2,252		37,415		-		2,252		37,415		5,775		2013	1989	20 Promenade Way SE
Calgary, AB		14,536		2,793		41,179		-		2,793		41,179		5,986		2013	1971	80 Edenwold Drive NW
Calgary, AB		11,476		3,122		38,971		-		3,122		38,971		5,617		2013	2001	150 Scotia Landing NW
Calgary, AB		22,995		3,431		28,983		-		3,431		28,983		3,350		2013	2006	9229 16th Street SW
Calgary, AB		23,846		2,385		36,776		-		2,385		36,776		613		2015	1952	2220-162nd Avenue SW
Camberley, UKJ		-		2,654		5,736		47		2,654		5,783		271		2014	1998	Fernhill Road
Cardiff, UKL		-		3,814		14,935		-		3,814		14,935		2,737		2013	1994	127 Cyncoed Road
Cardiff by the Sea, CA		39,580		5,880		64,711		710		5,880		65,421		10,470		2011	1996	3535 Manchester Avenue
Carol Stream, IL		-		1,730		55,048		1,079		1,730		56,127		8,192		2012	1957	545 Belmont Lane
Cary, NC		-		740		45,240		269		740		45,509		4,788		2013	2001	1206 West Chatham Street
Centerville, MA		-		1,300		27,357		733		1,324		28,066		4,665		2011	1900	22 Richardson Road
Chatham, ON		1,620		1,098		12,462		-		1,098		12,462		233		2015	2013	25 Keil Drive North
Chelmsford, MA		-		1,589		26,432		-		1,589		26,432		1,383		2015	1999	199 Chelmsford Street
Chesterfield, MO		-		1,857		48,366		420		1,857		48,786		5,652		2013	2007	1880 Clarkson Road
Chorleywood, UKH		-		6,715		50,515		-		6,715		50,515		7,004		2013	2013	High View, Rickmansworth Road
Chula Vista, CA		-		2,072		22,163		598		2,076		22,757		2,915		2013	2001	3302 Bonita Road
Church Crookham, UKJ		-		3,097		16,975		-		3,097		16,975		1,391		2014	2007	Bourley Road
Cincinnati, OH		-		2,060		109,388		8,391		2,060		117,779		15,708		2007	1994	5445 Kenwood Road
Claremont, CA		-		2,430		9,928		625		2,438		10,545		1,601		2013	1994	2053 North Towne Avenue
Cohasset, MA		-		2,485		26,147		1,013		2,485		27,160		3,591		2013	1978	125 King Street (Rt 3A)
Colorado Springs, CO		-		800		14,756		1,145		840		15,861		1,900		2013	2009	2105 University Park Boulevard
Concord, NH		13,329		720		21,164		624		758		21,750		3,545		2011	1905	300 Pleasant Street
Coquitlam, BC		10,393		3,047		24,567		-		3,047		24,567		4,690		2013	2010	1142 Dufferin Street
Costa Mesa, CA		-		2,050		19,969		955		2,050		20,924		3,889		2011	1965	350 West Bay St
Crystal Lake, IL		-		875		12,461		875		892		13,320		2,146		2013	1994	751 E Terra Cotta Avenue
Dallas, TX		-		1,080		9,655		464		1,080		10,119		1,854		2011	1997	3611 Dickason Avenue
Dallas, TX		-		6,330		114,794		-		6,330		114,794		3,383		2015	2009	3535 N Hall Street
Danvers, MA		9,348		1,120		14,557		647		1,145		15,179		2,822		2011	2008	1 Veronica Drive
Danvers, MA		-		2,203		28,761		-		2,203		28,761		1,764		2015	1998	9 Summer Street
Davenport, IA		-		1,403		35,893		2,708		1,480		38,525		6,728		2006	1996	4500 Elmore Ave.
Decatur, GA		-		-		-		30,298		1,938		28,360		4,176		2013	2003	920 Clairemont Avenue
Denver, CO		12,519		1,450		19,389		2,925		1,455		22,310		2,866		2012	2012	4901 South Monaco Street
Denver, CO		-		2,910		35,838		698		2,930		36,515		6,269		2012	2004	8101 E Mississippi Avenue
Dix Hills, NY		-		3,808		39,014		524		3,808		39,538		5,345		2013	1978	337 Deer Park Road
Dollard-Des-Ormeaux, QC		-		1,957		14,431		-		1,957		14,431		3,346		2013	2011	4377 St. Jean Blvd
Dresher, PA		7,233		1,900		10,664		713		1,900		11,377		2,495		2013	1990	1650 Susquehanna Road
Dublin, OH		-		1,680		43,423		5,238		1,775		48,566		9,230		2010	2015	6470 Post Rd
East Haven, CT		22,496		2,660		35,533		1,570		2,681		37,082		8,959		2011	1998	111 South Shore Drive
East Meadow, NY		-		69		45,991		322		124		46,257		6,128		2013	1988	1555 Glen Curtiss Boulevard
East Setauket, NY		-		4,920		37,354		744		4,975		38,043		4,947		2013	1996	1 Sunrise Drive
Eastbourne, UKJ		-		4,950		40,084		-		4,950		40,084		5,508		2013	2003	6 Upper Kings Drive
Edgbaston, UKG		-		-		-		19,687		3,251		16,435		305		2014	2001	Pershore Road
Edgewater, NJ		-		4,561		25,047		900		4,564		25,944		3,612		2013	1900	351 River Road
Edison, NJ		-		1,892		32,314		803		1,896		33,113		6,670		2013	1990	1801 Oak Tree Road
Edmonds, WA		11,182		1,650		24,449		-		1,650		24,449		585		2015	1985	21500 72nd Avenue West
Edmonton, AB		9,349		1,589		29,819		-		1,589		29,819		4,666		2013	1966	103 Rabbit Hill Court NW
Edmonton, AB		12,029		2,063		37,293		-		2,063		37,293		7,921		2013	1999	10015 103rd Avenue NW
Encinitas, CA		-		1,460		7,721		882		1,460		8,603		3,759		2000	1987	335 Saxony Rd.
Encino, CA		-		5,040		46,255		954		5,040		47,209		7,138		2012	2000	15451 Ventura Boulevard
Escondido, CA		-		1,520		24,024		1,147		1,520		25,171		4,710		2011	1998	1500 Borden Rd
Esher, UKJ		-		6,913		57,473		-		6,913		57,473		6,818		2013	2000	42 Copsem Lane
Fairfax, VA		-		19		2,678		112		19		2,791		603		2013	1982	9207 Arlington Boulevard
Fairfield, NJ		-		3,120		43,868		807		3,175		44,620		5,991		2013	1971	47 Greenbrook Road
Fareham, UKJ		-		4,074		21,353		-		4,074		21,353		1,435		2014	2007	Redlands Lane
Flossmoor, IL		-		1,292		9,496		1,011		1,335		10,464		1,817		2013	1991	19715 Governors Highway
Folsom, CA		-		1,490		32,754		-		1,490		32,754		1,231		2015	2008	1574 Creekside Drive
Fort Worth, TX		-		2,080		27,888		1,198		2,085		29,081		5,834		2012	1986	2151 Green Oaks Road
Franklin, MA		-		2,430		30,597		1,046		2,442		31,632		3,542		2013	1999	4 Forge Hill Road
Frome, UKK		-		3,251		17,692		-		3,251		17,692		879		2014	2006	Welshmill Lane
Fullerton, CA		12,774		1,964		19,989		489		1,982		20,459		2,892		2013	1998	2226 North Euclid Street
Gahanna, OH		-		772		11,214		1,121		787		12,320		1,446		2013	1994	775 East Johnstown Road
Gilbert, AZ		16,323		2,160		28,246		274		2,160		28,520		5,989		2013	1988	580 S. Gilbert Road
Gilroy, CA		-		760		13,880		24,386		1,567		37,459		7,997		2006	2014	7610 Isabella Way
Glen Cove, NY		-		4,594		35,236		1,174		4,615		36,389		5,988		2013	1979	39 Forest Avenue
Glenview, IL		-		2,090		69,288		1,130		2,090		70,418		10,039		2012	1975	2200 Golf Road
Golden Valley, MN		19,753		1,520		33,513		561		1,545		34,049		4,157		2013	2011	4950 Olson Memorial Highway
Grimsby, ON		-		636		5,617		-		636		5,617		450		2015	1998	84 Main Street East
Grosse Pointe Woods, MI		-		950		13,662		167		950		13,829		1,643		2013	1997	1850 Vernier Road
Grosse Pointe Woods, MI		-		1,430		31,777		535		1,430		32,312		3,839		2013	1999	21260 Mack Avenue
Guelph, ON		4,308		1,190		7,597		-		1,190		7,597		583		2015	1972	165 Cole Road
Guildford, UKJ		-		6,407		67,400		-		6,407		67,400		8,265		2013	2008	Astolat Way, Peasmarsh
Gurnee, IL		-		890		27,931		856		900		28,777		3,223		2013	2009	500 North Hunt Club Road
Hamden, CT		15,138		1,460		24,093		1,003		1,487		25,069		5,194		2011	2008	35 Hamden Hills Drive
Hampshire, UKJ		-		4,986		30,861		-		4,986		30,861		4,034		2013	1976	22-26 Church Road
Haverhill, MA		-		1,720		50,046		-		1,720		50,046		2,805		2015	2014	254 Amesbury Road
Henderson, NV		-		880		29,809		143		880		29,952		4,016		2011	1995	1935 Paseo Verde Parkway
Henderson, NV		5,677		1,190		11,600		397		1,202		11,985		2,653		2013	2000	1555 West Horizon Ridge Parkway
Highland Park, IL		-		2,250		25,313		479		2,259		25,782		4,191		2013	2014	1601 Green Bay Road
Hingham, MA		-		1,440		32,292		-		1,440		32,292		1,259		2015	2001	1 Sgt. William B Terry Drive
Holbrook, NY		-		3,957		35,337		383		3,957		35,721		4,664		2013	2005	320 Patchogue Holbrook Road
Horley, UKJ		-		2,787		14,477		-		2,787		14,477		1,331		2014	2006	Court Lodge Road
Houston, TX		-		3,830		55,674		4,340		3,830		60,014		10,100		2012	1998	2929 West Holcombe Boulevard
Houston, TX		17,606		1,040		31,965		5,013		1,044		36,974		4,999		2012	2000	505 Bering Drive
Houston, TX		-		960		27,598		1,312		960		28,910		5,237		2011	2006	10225 Cypresswood Dr
Hove, UKJ		-		1,626		8,178		-		1,626		8,178		492		2014	1981	Furze Hill
Huntington Beach, CA		-		3,808		31,172		1,148		3,860		32,268		5,293		2013	1999	7401 Yorktown Avenue
Irving, TX		-		1,030		6,823		1,178		1,030		8,001		1,795		2007	1990	8855 West Valley Ranch Parkway
Johns Creek, GA		-		1,580		23,285		184		1,588		23,461		3,166		2013	1979	11405 Medlock Bridge Road
Kanata, ON		-		1,639		30,700		-		1,639		30,700		5,783		2012	1986	70 Stonehaven Drive
Kansas City, MO		-		1,820		34,898		3,713		1,845		38,587		7,589		2010	1983	12100 Wornall Road
Kansas City, MO		6,250		1,930		39,997		3,393		1,963		43,357		9,011		2010	2008	6500 North Cosby Ave
Kansas City, MO		-		541		23,962		-		541		23,962		947		2015	2015	6460 North Cosby Avenue
Kelowna, BC		5,878		2,688		13,647		-		2,688		13,647		2,670		2013	1900	863 Leon Avenue
Kennebunk, ME		-		2,700		30,204		2,066		3,022		31,948		8,415		2013	2009	One Huntington Common Drive
Kingston, ON		4,633		1,030		11,416		-		1,030		11,416		748		2015	2012	181 Ontario Street
Kingwood, TX		-		480		9,777		370		480		10,147		1,813		2011	2015	22955 Eastex Freeway
Kirkland, WA		24,600		3,450		38,709		424		3,454		39,129		5,857		2011	1974	14 Main Street South
Kitchener, ON		1,487		640		2,744		-		640		2,744		507		2013	2005	164 - 168 Ferfus Avenue
Kitchener, ON		4,638		1,130		9,939		-		1,130		9,939		1,615		2013	1980	20 Fieldgate Street
Kitchener, ON		3,533		1,093		7,327		-		1,093		7,327		1,651		2013	1999	290 Queen Street South
La Palma, CA		-		2,950		16,591		537		2,950		17,128		2,335		2013	1974	5321 La Palma Avenue
Lafayette Hill, PA		-		1,750		11,848		1,311		1,825		13,085		2,439		2013	2010	429 Ridge Pike
Lawrenceville, GA		15,896		1,500		29,003		281		1,508		29,276		4,012		2013	1998	1375 Webb Gin House Road
Leawood, KS		15,614		2,490		32,493		2,594		5,690		31,887		5,631		2012	1986	4400 West 115th Street
Lenexa, KS		9,757		826		26,251		493		836		26,735		4,231		2013	2002	15055 West 87th Street Parkway
Leominster, MA		-		944		23,164		-		944		23,164		1,521		2015	1900	1160 Main Street
Lincroft, NJ		-		9		19,958		873		9		20,831		2,675		2013	1966	734 Newman Springs Road
Lombard, IL		16,893		2,130		59,943		418		2,130		60,361		7,667		2013	1900	2210 Fountain Square Dr
London, UKI		-		3,731		11,948		-		3,731		11,948		670		2014	2010	71 Hatch Lane
London, ON		1,174		987		8,228		-		987		8,228		562		2015	2001	760 Horizon Drive
London, ON		6,383		1,969		16,985		-		1,969		16,985		1,109		2015	1997	1486 Richmond Street North
London, ON		-		1,445		13,631		-		1,445		13,631		255		2015	1978	81 Grand Avenue
Longueuil, QC		9,927		3,992		23,711		-		3,992		23,711		235		2015	2013	70 Rue Levis
Los Angeles, CA		-		-		11,430		1,544		-		12,974		2,316		2008	2002	330 North Hayworth Avenue
Los Angeles, CA		64,160		-		114,438		1,304		-		115,742		19,542		2011	2003	10475 Wilshire Boulevard
Los Angeles, CA		-		3,540		19,007		737		3,540		19,744		2,869		2012	2004	2051 N. Highland Avenue
Louisville, KY		-		2,420		20,816		664		2,420		21,480		3,334		2012	2000	4600 Bowling Boulevard
Louisville, KY		11,169		1,600		20,326		182		1,600		20,508		3,240		2013	1988	6700 Overlook Drive
Lynnfield, MA		-		3,165		45,200		1,376		3,165		46,576		6,172		2013	1994	55 Salem Street
Malvern, PA		-		1,651		17,194		1,214		1,708		18,351		3,710		2013	1999	324 Lancaster Avenue
Mansfield, MA		27,863		3,320		57,011		2,831		3,431		59,732		12,218		2011	1967	25 Cobb Street
Maple Ridge, BC		7,918		2,789		12,331		-		2,789		12,331		173		2015	1977	12241 224th Street
Marieville, QC		6,774		1,278		12,113		-		1,278		12,113		124		2015	2009	425 rue Claude de Ramezay
Markham, ON		15,975		3,727		48,939		-		3,727		48,939		10,287		2013	1986	7700 Bayview Avenue
Marlboro, NJ		-		2,222		14,888		528		2,222		15,416		2,303		2013	1999	3A South Main Street
Medicine Hat, AB		4,249		1,432		14,141		-		1,432		14,141		927		2015	2007	223 Park Meadows Drive SE
Memphis, TN		-		1,800		17,744		834		1,800		18,578		3,777		2012	2007	6605 Quail Hollow Road
Meriden, CT		9,227		1,500		14,874		727		1,538		15,563		4,125		2011	1999	511 Kensington Avenue
Metairie, LA		13,240		725		27,708		277		725		27,985		3,320		2013	2006	3732 West Esplanade Ave. S
Middletown, CT		15,198		1,430		24,242		1,104		1,439		25,336		5,366		2011	1962	645 Saybrook Road
Middletown, RI		16,163		2,480		24,628		1,389		2,507		25,990		5,392		2011	2001	303 Valley Road
Milford, CT		11,338		3,210		17,364		1,114		3,210		18,478		4,266		2011	1905	77 Plains Road
Milton, ON		13,007		4,542		25,321		-		4,542		25,321		234		2015	1991	611 Farmstead Drive
Minnetonka, MN		14,206		2,080		24,360		825		2,153		25,112		3,843		2012	1900	500 Carlson Parkway
Minnetonka, MN		16,253		920		29,344		395		920		29,739		3,448		2013	1993	18605 Old Excelsior Blvd.
Mississauga, ON		9,033		1,602		17,996		-		1,602		17,996		2,778		2013	2006	1130 Bough Beeches Boulevard
Mississauga, ON		3,041		873		4,655		-		873		4,655		728		2013	1988	3051 Constitution Boulevard
Mississauga, ON		19,501		3,649		35,137		-		3,649		35,137		1,972		2015	2007	1490 Rathburn Road East
Mississauga, ON		6,152		2,548		15,158		-		2,548		15,158		922		2015	1900	85 King Street East
Mobberley, UKD		-		6,150		31,685		-		6,150		31,685		5,954		2013	1974	Barclay Park, Hall Lane
Monterey, CA		-		6,440		29,101		547		6,440		29,648		3,980		2013	1977	1110 Cass St.
Montgomery Village, MD		-		3,530		18,246		3,533		3,544		21,766		6,009		2013	1995	19310 Club House Road
Moose Jaw, SK		2,620		582		12,973		-		582		12,973		1,995		2013	1996	425 4th Avenue NW
Mystic, CT		11,338		1,400		18,274		695		1,427		18,942		3,785		2011	1988	20 Academy Lane  Mystic
Naperville, IL		-		1,550		12,237		2,165		1,550		14,402		801		2012	2000	1936 Brookdale Road
Naperville, IL		-		1,540		28,204		738		1,540		28,942		4,073		2013	2011	535 West Ogden Avenue
Naples, FL		58,092		8,989		119,398		-		8,989		119,398		1,193		2015	2014	4800 Aston Gardens Way
Nashua, NH		-		1,264		43,026		-		1,264		43,026		1,955		2015	1999	674 West Hollis Street
Nashville, TN		-		3,900		35,788		1,372		3,900		37,160		6,856		2012	1998	4206 Stammer Place
Nepean, ON		5,769		1,575		5,770		-		1,575		5,770		583		2015	2010	1 Mill Hill Road
Newmarket, UKH		-		5,141		13,478		340		4,866		14,093		1,015		2014	2010	Jeddah Way
Newton, MA		27,501		2,250		43,614		672		2,263		44,273		8,293		2011	1968	2300 Washington Street
Newton, MA		15,873		2,500		30,681		1,800		2,514		32,467		6,425		2011	2000	280 Newtonville Avenue
Newton, MA		-		3,360		25,099		1,162		3,376		26,245		5,518		2011	1988	430 Centre Street
Newtown Square, PA		-		1,930		14,420		544		1,941		14,953		3,190		2013	2008	333 S. Newtown Street Rd.
Niagara Falls, ON		6,784		1,225		7,963		-		1,225		7,963		559		2015	2001	7860 Lundy's Lane
Niantic, CT		-		1,320		25,986		4,175		1,331		30,150		4,661		2011	1985	417 Main Street
North Andover, MA		22,315		1,960		34,976		1,203		2,019		36,120		6,815		2011	1967	700 Chickering Road
North Chelmsford, MA		11,760		880		18,478		783		898		19,243		3,338		2011	1997	2 Technology Drive
North Tustin, CA		-		2,880		18,059		357		2,880		18,416		1,998		2013	2009	12291 Newport Avenue
Oak Park, IL		-		1,250		40,383		570		1,250		40,953		6,150		2012	2005	1035 Madison Street
Oakland, CA		-		3,877		47,508		1,169		3,877		48,677		6,651		2013	1982	11889 Skyline Boulevard
Oakton, VA		-		2,250		37,576		1,425		2,252		38,998		4,964		2013	1983	2863 Hunter Mill Road
Oakville, ON		5,853		1,252		7,382		-		1,252		7,382		1,184		2013	1996	289 and 299 Randall Street
Oakville, ON		10,232		2,134		29,963		-		2,134		29,963		5,104		2013	1983	25 Lakeshore Road West
Oakville, ON		5,347		1,271		13,754		-		1,271		13,754		1,836		2013	1966	345 Church Street
Oceanside, CA		12,460		2,160		18,352		2,082		2,193		20,401		3,904		2011	1998	3500 Lake Boulevard
Okotoks, AB		17,631		714		20,943		-		714		20,943		1,244		2015	1992	51 Riverside Gate
Oshawa, ON		3,197		841		7,570		-		841		7,570		1,259		2013	1995	649 King Street East
Ottawa, ON		9,420		1,341		15,425		-		1,341		15,425		196		2015	1900	110 Berrigan Drive
Ottawa, ON		19,071		3,454		23,309		-		3,454		23,309		1,609		2015	2009	2370 Carling Avenue
Ottawa, ON		21,966		4,177		40,023		-		4,177		40,023		435		2015	1988	751 Peter Morand Crescent
Ottawa, ON		7,110		2,103		18,421		-		2,103		18,421		148		2015	1998	1 Eaton Street
Ottawa, ON		12,273		2,963		26,424		-		2,963		26,424		279		2015	1966	691 Valin Street
Ottawa, ON		10,213		1,561		18,170		-		1,561		18,170		207		2015	1964	22 Barnstone Drive
Ottawa, ON		13,970		3,403		31,090		-		3,403		31,090		294		2015	1996	990 Hunt Club Road
Ottawa, ON		18,867		3,411		28,335		-		3,411		28,335		207		2015	2001	2 Valley Stream Drive
Ottawa, ON		2,986		724		4,710		-		724		4,710		742		2013	2007	1345 Ogilvie Road
Ottawa, ON		2,178		818		2,165		968		678		3,273		541		2013	2006	370 Kennedy Lane
Ottawa, ON		10,733		2,809		27,299		-		2,809		27,299		5,099		2013	1951	43 Aylmer Avenue
Ottawa, ON		4,781		1,156		9,758		-		1,156		9,758		1,244		2013	1994	1351 Hunt Club Road
Ottawa, ON		3,392		746		7,800		-		746		7,800		1,167		2013	1999	140 Darlington Private
Ottawa, ON		9,348		1,176		12,764		-		1,176		12,764		790		2015	2005	10 Vaughan Street
Overland Park, KS		3,470		1,540		16,269		1,096		1,725		17,180		2,420		2012	1976	9201 Foster
Palo Alto, CA		16,839		-		39,639		1,145		-		40,784		5,203		2013	1999	2701 El Camino Real
Paramus, NJ		-		2,840		35,728		928		2,851		36,645		4,496		2013	2000	567 Paramus Road
Parkland, FL		57,666		4,880		111,481		-		4,880		111,481		1,171		2015	2009	5999 University Drive
Peabody, MA		6,338		-		-		19,009		2,250		16,758		1,379		2013	2002	73 Margin Street
Pembroke, ON		-		1,873		10,045		-		1,873		10,045		1,878		2012	2010	1111 Pembroke Street West
Pittsburgh, PA		-		1,580		18,017		369		1,580		18,386		2,830		2013	1977	900 Lincoln Club Dr.
Plainview, NY		-		3,066		19,901		370		3,079		20,258		2,354		2013	1985	1231 Old Country Road
Plano, TX		4,101		840		8,538		711		840		9,249		2,025		2011	2009	5521 Village Creek Dr
Plano, TX		28,734		3,120		59,950		838		3,120		60,788		11,356		2013	2008	4800 West Parker Road
Playa Vista, CA		-		1,580		40,531		686		1,580		41,217		5,627		2013	2004	5555 Playa Vista Drive
Plymouth, MA		-		1,444		34,951		-		1,444		34,951		1,899		2015	1998	157 South Street
Port Perry, ON		9,892		3,685		26,788		-		3,685		26,788		193		2015	1985	15987 Simcoe Street
Providence, RI		-		2,600		27,546		1,148		2,651		28,643		7,384		2011	1998	700 Smith Street
Purley, UKI		-		9,676		35,251		5,749		8,798		41,878		6,710		2012	2006	21 Russell Hill Road
Queensbury, NY		-		1,260		21,744		-		1,260		21,744		-		2015	1999	27 Woodvale Road
Quincy, MA		-		1,350		12,584		635		1,386		13,183		2,738		2011	1957	2003 Falls Boulevard
Rancho Cucamonga, CA		-		1,480		10,055		512		1,487		10,560		1,858		2013	1992	9519 Baseline Road
Rancho Palos Verdes, CA		-		5,450		60,034		1,284		5,450		61,318		9,043		2012	2003	5701 Crestridge Road
Randolph, NJ		-		1,540		46,934		602		1,540		47,536		6,100		2013	1988	648 Route 10 West
Red Deer, AB		11,851		1,247		19,283		-		1,247		19,283		315		2015	1989	3100 - 22 Street
Red Deer, AB		13,946		1,199		22,339		-		1,199		22,339		384		2015	2010	10 Inglewood Drive
Redondo Beach, CA		-		-		9,557		611		-		10,168		3,906		2011	1986	514 North Prospect Ave
Regina, SK		7,017		1,485		21,148		-		1,485		21,148		3,704		2013	1990	3651 Albert Street
Regina, SK		6,771		1,244		21,036		-		1,244		21,036		2,891		2013	1988	3105 Hillsdale Street
Regina, SK		13,178		1,539		24,053		-		1,539		24,053		207		2015	2002	1801 McIntyre Street
Renton, WA		21,565		3,080		51,824		340		3,080		52,164		7,774		2011	1989	104 Burnett Avenue South
Ridgefield, CT		-		3,100		80,614		-		3,100		80,614		4,320		2015	2014	640 Danbury Road
Riviere-du-Loup, QC		3,309		568		8,504		-		568		8,504		140		2015	1900	35 des Cedres
Riviere-du-Loup, QC		9,489		1,454		16,848		-		1,454		16,848		117		2015	2002	230-235 rue Des Chenes
Rocky Hill, CT		10,253		810		16,351		574		900		16,835		3,090		2011	2002	1160 Elm Street
Romeoville, IL		-		854		12,646		59,431		6,168		66,763		10,561		2006	1993	605 S Edward Dr.
Roseville, MN		-		1,540		35,877		498		1,585		36,331		4,298		2013	2008	2555 Snelling Avenue, North
Roswell, GA		-		2,080		6,486		1,169		2,380		7,355		1,317		2012	2013	75 Magnolia Street
Sacramento, CA		-		1,300		23,394		564		1,304		23,954		2,916		2013	1996	345 Munroe Street
Saint-Lambert, QC		23,254		9,931		107,748		-		9,931		107,748		45,319		2015	2002	1705 Avenue Victoria
Salem, NH		20,566		980		32,721		869		1,051		33,519		5,679		2011	1998	242 Main Street
Salisbury, UKK		-		3,251		18,169		-		3,251		18,169		742		2014	1900	Shapland Close
Salt Lake City, UT		-		1,360		19,691		1,650		1,360		21,341		5,156		2011	1900	1430 E. 4500 S.
San Diego, CA		-		4,200		30,707		201		4,200		30,908		3,289		2011	1965	2567 Second Avenue
San Diego, CA		-		5,810		63,078		926		5,810		64,004		11,714		2012	1989	13075 Evening Creek Drive S
San Diego, CA		-		3,000		27,164		428		3,000		27,592		3,186		2013	1990	810 Turquoise Street
San Gabriel, CA		-		3,120		15,566		489		3,120		16,055		2,296		2013	2008	8332 Huntington Drive
San Jose, CA		-		2,850		35,098		225		2,850		35,323		5,236		2011	2006	1420 Curvi Drive
San Jose, CA		-		3,280		46,823		1,261		3,280		48,084		7,027		2012	1999	500 S Winchester Boulevard
San Juan Capistrano, CA		-		1,390		6,942		1,056		1,390		7,998		3,028		2000	1900	30311 Camino Capistrano
Sandy Springs, GA		-		2,214		8,360		445		2,220		8,799		1,794		2012	1988	5455 Glenridge Drive NE
Santa Maria, CA		-		6,050		50,658		1,162		6,063		51,806		10,701		2011	2000	1220 Suey Road
Santa Monica, CA		19,936		5,250		28,340		501		5,252		28,839		3,729		2013	2009	1312 15th Street
Saskatoon, SK		4,329		981		13,905		-		981		13,905		1,753		2013	1995	220 24th Street East
Saskatoon, SK		10,078		1,382		17,609		-		1,382		17,609		2,236		2013	1999	1622 Acadia Drive
Schaumburg, IL		-		2,460		22,863		739		2,479		23,584		3,840		2013	1986	790 North Plum Grove Road
Scottsdale, AZ		-		2,500		3,890		1,244		2,500		5,134		1,136		2008	2005	9410 East Thunderbird Road
Seal Beach, CA		-		6,204		72,954		1,057		6,208		74,007		13,575		2013	2003	3850 Lampson Avenue
Seattle, WA		48,540		6,790		85,369		1,785		6,793		87,150		13,279		2011	1981	5300 24th Avenue NE
Seattle, WA		10,751		1,150		19,887		-		1,150		19,887		561		2015	2001	11039 17th Avenue
Sevenoaks, UKJ		-		7,387		48,012		-		7,387		48,012		7,643		2012	1985	64 - 70 Westerham Road
Shelburne, VT		19,540		720		31,041		1,490		756		32,495		5,171		2011	2004	687 Harbor Road
Shelby Township, MI		16,505		1,040		26,344		354		1,093		26,645		3,246		2013	2008	46471 Hayes Road
Shrewsbury, MA		-		950		26,824		-		950		26,824		1,566		2015	1996	3111 Main Street
Sidcup, UKI		-		9,773		56,163		10,008		8,873		67,071		11,712		2012	1998	Frognal Avenue
Simi Valley, CA		-		3,200		16,664		438		3,200		17,102		3,408		2013	2015	190 Tierra Rejada Road
Solihull, UKG		-		6,060		51,464		-		6,060		51,464		7,491		2012	1996	1270 Warwick Road
Solihull, UKG		-		4,269		30,963		-		4,269		30,963		4,631		2013	1989	1 Worcester Way
Sonning, UKJ		-		6,720		50,268		-		6,720		50,268		6,756		2013	1982	Old Bath Rd.
South Windsor, CT		-		3,000		29,295		1,405		3,099		30,601		6,608		2011	1900	432 Buckland Road
Spokane, WA		-		3,200		25,064		436		3,268		25,432		5,362		2013	2002	3117 E. Chaser Lane
Spokane, WA		-		2,580		25,342		211		2,639		25,494		4,242		2013	2011	1110 E. Westview Ct.
St. Albert, AB		8,775		1,145		17,863		-		1,145		17,863		3,231		2014	2001	78C McKenney Avenue
St. John's, NL		6,129		685		13,466		-		685		13,466		275		2015	2009	64 Portugal Cove Road
Stittsville, ON		4,791		1,175		17,397		-		1,175		17,397		2,206		2013	2001	1340 - 1354 Main Street
Stockport, UKD		-		5,222		29,674		-		5,222		29,674		4,999		2013	2007	1 Dairyground Road
Studio City, CA		-		4,006		25,307		561		4,040		25,835		4,246		2013	2001	4610 Coldwater Canyon Avenue
Sugar Land, TX		-		960		31,423		1,340		960		32,763		6,449		2011	2006	1221 Seventh St
Sun City, FL		21,693		6,521		48,476		-		6,521		48,476		644		2015	2001	231 Courtyards
Sun City, FL		24,442		5,040		50,923		-		5,040		50,923		610		2015	2001	1311 Aston Gardens Court
Sun City West, AZ		12,257		1,250		21,778		927		1,250		22,705		2,947		2012	1994	13810 West Sandridge Drive
Sunnyvale, CA		-		5,420		41,682		889		5,420		42,571		6,651		2012	1997	1039 East El Camino Real
Surrey, BC		7,128		3,605		18,818		-		3,605		18,818		4,276		2013	2012	16028 83rd Avenue
Surrey, BC		16,373		4,552		22,338		-		4,552		22,338		5,435		2013	1996	15501 16th Avenue
Suwanee, GA		-		1,560		11,538		604		1,560		12,142		2,103		2012	1988	4315 Johns Creek Parkway
Sway, UKJ		-		4,955		18,437		-		4,955		18,437		1,099		2014	1964	Sway Place
Swift Current, SK		2,343		492		10,119		-		492		10,119		1,513		2013	1981	301 Macoun Drive
Tacoma, WA		18,405		2,400		35,053		211		2,446		35,219		5,282		2011	1971	7290 Rosemount Circle
Tacoma, WA		-		1,535		6,068		-		1,535		6,068		599		2015	1990	7290 Rosemount Circle
Tampa, FL		69,330		4,910		114,148		-		4,910		114,148		1,144		2015	1997	12951 W Linebaugh Avenue
The Woodlands, TX		-		480		12,379		284		480		12,663		2,274		2011	1999	7950 Bay Branch Dr
Toledo, OH		-		2,040		47,129		2,716		2,144		49,741		10,566		2010	1998	3501 Executive Parkway
Toronto, ON		8,882		2,927		20,713		-		2,927		20,713		800		2015	1900	54 Foxbar Road
Toronto, ON		9,874		5,082		25,493		-		5,082		25,493		1,640		2015	2014	645 Castlefield Avenue
Toronto, ON		13,234		1,976		20,034		-		1,976		20,034		1,238		2015	1973	4251 Dundas Street West
Toronto, ON		20,785		5,132		41,657		-		5,132		41,657		2,494		2015	1996	10 William Morgan Drive
Toronto, ON		5,723		2,480		7,571		-		2,480		7,571		650		2015	2007	123 Spadina Road
Toronto, ON		1,499		1,079		5,364		-		1,079		5,364		739		2013	2014	25 Centennial Park Road
Toronto, ON		8,428		2,513		19,695		-		2,513		19,695		2,074		2013	2015	305 Balliol Street
Toronto, ON		18,600		3,400		32,757		-		3,400		32,757		5,095		2013	2005	1055 and 1057 Don Mills Road
Toronto, ON		1,120		1,361		2,915		-		1,361		2,915		844		2013	1987	3705 Bathurst Street
Toronto, ON		1,816		1,447		3,918		-		1,447		3,918		763		2013	2006	1340 York Mills Road
Toronto, ON		32,781		5,304		53,488		-		5,304		53,488		11,343		2013	1974	8 The Donway East
Trumbull, CT		24,245		2,850		37,685		1,229		2,927		38,837		8,103		2011	1975	2750 Reservoir Avenue
Tucson, AZ		4,615		830		6,179		3,497		830		9,676		1,113		2012	2006	5660 N. Kolb Road
Tulsa, OK		-		1,330		21,285		1,781		1,350		23,046		4,545		2010	1998	8887 South Lewis Ave
Tulsa, OK		-		1,500		20,861		1,550		1,551		22,360		4,840		2010	1999	9524 East 71st St
Tustin, CA		-		840		15,299		484		840		15,783		2,515		2011	1989	240 East 3rd St
Upland, CA		-		3,160		42,596		-		3,160		42,596		1,459		2015	1985	2419 North Euclid Avenue
Upper St Claire, PA		-		1,102		13,455		486		1,102		13,941		2,404		2013	2013	500 Village Drive
Vancouver, BC		15,361		24,122		42,675		-		24,122		42,675		2,776		2015	1988	2803 West 41st Avenue
Vankleek Hill, ON		1,077		389		2,960		-		389		2,960		573		2013	1962	48 Wall Street
Vaudreuil, QC		8,279		1,779		14,803		-		1,779		14,803		149		2015	1990	333 rue Querbes
Venice, FL		64,425		6,820		100,501		-		6,820		100,501		1,071		2015	2012	1000 Aston Gardens Drive
Victoria, BC		-		2,674		14,218		-		2,674		14,218		2,914		2012	1999	2638 Ross Lane
Victoria, BC		7,533		2,856		18,038		-		2,856		18,038		3,203		2013	1969	3000 Shelbourne Street
Victoria, BC		6,945		3,681		15,774		-		3,681		15,774		2,895		2013	1974	3051 Shelbourne Street
Victoria, BC		7,788		2,476		15,379		-		2,476		15,379		849		2015	2011	3965 Shelbourne Street
Virginia Water, UKJ		-		7,106		29,937		5,261		6,475		35,829		5,458		2012	1990	Christ Church Road
Walnut Creek, CA		-		3,700		12,467		1,108		3,763		13,512		2,649		2013	2000	2175 Ygnacio Valley Road
Waltham, MA		-		2,462		40,062		-		2,462		40,062		2,372		2015	1990	126 Smith Street
Warwick, RI		15,681		2,400		24,635		1,270		2,407		25,898		6,310		2011	2008	75 Minnesota Avenue
Washington, DC		32,108		4,000		69,154		739		4,000		69,893		9,085		2013	1889	5111 Connecticut Avenue NW
Waterbury, CT		24,305		2,460		39,547		1,954		2,495		41,465		11,430		2011	2000	180 Scott Road
Wayland, MA		-		1,207		27,462		982		1,307		28,344		3,901		2013	2013	285 Commonwealth Road
Welland, ON		6,662		954		8,971		-		954		8,971		201		2015	1998	110 First Street
Wellesley, MA		-		4,690		77,462		-		4,690		77,462		2,684		2015	1997	23 & 27 Washington Street
West Babylon, NY		-		3,960		47,085		549		3,960		47,634		5,641		2013	1970	580 Montauk Highway
West Bloomfield, MI		-		1,040		12,300		453		1,060		12,733		1,776		2013	2004	7005 Pontiac Trail
West Hills, CA		-		2,600		7,521		444		2,600		7,965		1,819		2013	2011	9012 Topanga Canyon Road
West Vancouver, BC		19,137		7,059		28,155		-		7,059		28,155		4,598		2013	1900	2095 Marine Drive
Westbourne, UKK		-		6,504		49,217		-		6,504		49,217		6,843		2013	1900	16-18 Poole Road
Westford, MA		-		1,440		32,607		-		1,440		32,607		1,117		2015	1960	108 Littleton Road
Weston, MA		-		1,160		6,200		534		1,160		6,734		767		2013	1900	135 North Avenue
Weybridge, UKJ		-		9,422		57,457		-		9,422		57,457		9,805		2013	2012	Ellesmere Road
Weymouth, UKK		-		3,097		19,712		-		3,097		19,712		767		2014	1900	Cross Road
White Oak, MD		-		2,304		24,768		998		2,316		25,754		3,085		2013	1994	11621 New Hampshire Avenue
Wilbraham, MA		10,976		660		17,639		715		668		18,345		3,368		2011	2010	2387 Boston Road
Wilmington, DE		-		1,040		23,338		464		1,040		23,802		3,256		2013	2008	2215 Shipley Street
Winchester, UKJ		-		7,182		35,044		-		7,182		35,044		5,526		2012	2006	Stockbridge Road
Winnipeg, MB		13,274		1,960		38,612		-		1,960		38,612		8,716		2013	2005	857 Wilkes Avenue
Winnipeg, MB		7,809		1,276		21,732		-		1,276		21,732		3,156		2013	2000	3161 Grant Avenue
Winnipeg, MB		8,310		1,317		15,609		-		1,317		15,609		965		2015	1998	125 Portsmouth Boulevard
Wolverhampton, UKG		-		3,510		10,409		-		3,510		10,409		2,422		2013	1996	73 Wergs Road
Woodbridge, CT		-		1,370		14,219		849		1,391		15,047		4,196		2011	1963	21 Bradley Road
Woodland Hills, CA		-		3,400		20,478		678		3,406		21,150		3,381		2013	2007	20461 Ventura Boulevard
Worcester, MA		13,751		1,140		21,664		784		1,156		22,431		4,109		2011	2014	340 May Street
Yarmouth, ME		17,128		450		27,711		798		470		28,489		4,848		2011	1900	27 Forest Falls Drive
Yonkers, NY		-		3,962		50,107		907		3,967		51,009		6,551		2013	1991	65 Crisfield Street
Yorkton, SK		3,389		467		8,765		-		466		8,763		1,283		2013	1900	94 Russell Drive
Seniors housing operating total	$	2,290,552	$	972,005	$	10,569,105	$	446,629	$	994,865	$	10,992,868	$	1,463,201

114

115

Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2015
(Dollars in thousands)
				Initial Cost to Company						Gross Amount at Which Carried at Close of Period
Description		Encumbrances		Land		Building & Improvements		Cost Capitalized Subsequent to Acquisition		Land		Building & Improvements		Accumulated Depreciation(1)	Year Acquired	Year Built	Address
Outpatient medical:
Akron, OH	$	-	$	821	$	12,105	$	-	$	821	$	12,105	$	1,568	2012	1985	701 White Pond Drive
Allen, TX		12,080		726		14,196		315		726		14,511		3,024	2012	2006	1105 N Central Expressway
Alpharetta, GA		-		773		18,902		230		773		19,133		3,859	2011	1993	3400-A Old Milton Parkway
Alpharetta, GA		-		1,769		36,152		-		1,769		36,152		8,518	2011	1999	3400-C Old Milton Parkway
Alpharetta, GA		-		476		14,757		13		476		14,770		3,156	2011	2003	11975 Morris Road
Alpharetta, GA		-		1,862		-		-		1,862		-		-	2011	1900	940 North Point Parkway
Alpharetta, GA		-		548		17,103		39		548		17,142		4,469	2011	1900	3300 Old Milton Parkway
Arcadia, CA		-		5,408		23,219		2,971		5,618		25,980		7,917	2006	1984	301 W. Huntington Drive
Arlington, TX		-		82		18,243		248		82		18,491		1,094	2012	2014	902 W. Randol Mill Road
Atlanta, GA		-		4,931		18,720		4,679		5,301		23,029		8,357	2006	1991	755 Mt. Vernon Hwy.
Atlanta, GA		-		1,947		24,248		1,143		1,947		25,391		4,258	2012	2007	975 Johnson Ferry Road
Atlanta, GA		25,726		-		43,425		483		-		43,908		9,347	2012	2006	5670 Peachtree-Dunwoody Road
Bardstown, KY		2,001		-		-		8,239		273		7,966		86	2010	2011	4359 New Shepherdsville Rd
Bartlett, TN		7,719		187		15,015		1,632		187		16,647		5,193	2007	2004	2996 Kate Bond Rd.
Bellevue, NE		-		-		16,680		-		-		16,680		3,408	2010	2010	2510 Bellevue Medical Center Drive
Bettendorf, IA		-		-		7,110		73		-		7,183		210	2013	2009	2140 53rd Avenue
Beverly Hills, CA		-		20,766		40,730		-		20,766		40,730		1,051	2015	1900	9675 Brighton Way
Beverly Hills, CA		-		18,863		1,192		-		18,863		1,192		111	2015	1900	415 North Bedford
Beverly Hills, CA		-		19,863		31,690		-		19,863		31,690		961	2015	1946	416 North Bedford
Beverly Hills, CA		33,729		32,603		28,639		-		32,603		28,639		1,119	2015	1955	435 North Bedford
Beverly Hills, CA		78,271		52,772		88,693		-		52,772		88,693		2,116	2015	1946	436 North Bedford
Birmingham, AL		-		52		10,201		3,208		52		13,409		4,743	2006	1971	801 Princeton Avenue SW
Birmingham, AL		-		124		11,733		-		124		11,733		3,070	2006	1985	817 Princeton Avenue SW
Birmingham, AL		-		476		18,726		-		476		18,726		5,068	2006	1989	833 Princeton Avenue SW
Boardman, OH		-		80		12,161		-		80		12,161		3,128	2010	2007	8423 Market St
Boca Raton, FL		-		109		34,002		2,423		214		36,320		11,052	2006	1995	9970 S. Central Park Blvd.
Boca Raton, FL		-		31		12,312		55		31		12,367		2,004	2012	1993	9960 S. Central Park Boulevard
Boerne, TX		-		50		13,541		190		50		13,731		3,173	2011	2007	134 Menger Springs Road
Boynton Beach, FL		-		2,048		7,692		615		2,048		8,307		3,059	2006	1995	8188 Jog Rd.
Boynton Beach, FL		-		2,048		7,403		1,238		2,048		8,640		2,937	2006	1997	8200 Jog Road
Boynton Beach, FL		-		214		5,611		8,079		270		13,634		4,162	2007	1996	10075 Jog Rd.
Boynton Beach, FL		25,708		13,324		40,369		773		13,324		41,141		5,217	2013	2013	10301 Hagen Ranch Road
Bradenton, FL		-		1,184		9,799		-		1,184		9,799		629	2014	2014	315 75th Street West
Bradenton, FL		-		1,035		4,298		-		1,035		4,298		303	2014	2009	7005 Cortez Road West
Bridgeton, MO		10,294		450		21,272		20		450		21,292		5,105	2010	2006	12266 DePaul Dr
Burleson, TX		-		10		12,611		3		10		12,614		2,484	2011	2007	12001 South Freeway
Burnsville, MN		-		-		31,596		-		-		31,596		2,339	2013	2012	14101 Fairview Dr
Carmel, IN		-		2,280		19,238		64		2,280		19,301		5,488	2011	2005	12188-A North Meridian Street
Carmel, IN		-		2,026		21,559		10		2,026		21,570		6,368	2011	2007	12188-B North Meridian Street
Castle Rock, CO		-		80		13,004		571		79		13,576		1,012	2014	2014	2352 Meadows Boulevard
Cedar Grove, WI		-		113		618		-		113		618		132	2010	1986	313 S. Main St.
Charleston, SC		-		2,773		25,928		3		2,773		25,931		1,794	2014	1975	325 Folly Road
Cincinnati, OH		-		-		17,880		218		-		18,098		1,454	2012	2012	3301 Mercy West Boulevard
Claremore, OK		7,732		132		12,829		407		132		13,236		4,399	2007	2005	1501 N. Florence Ave.
Clarkson Valley, MO		-		-		35,592		-		-		35,592		8,269	2009	2010	15945 Clayton Rd
Clear Lake, TX		-		-		13,882		-		-		13,882		463	2013	1995	1010 South Ponds Drive
Columbia, MD		-		2,333		19,232		-		2,333		19,232		2,576	2012	2013	10700 Charter Drive
Columbia, MD		-		-		34,930		-		-		34,930		136	2015	2009	5450 & 5500 Knoll N Drive
Coon Rapids, MN		-		-		26,679		730		-		27,409		2,007	2013	2005	11850 Blackfoot Street NW
Dade City, FL		-		1,211		5,511		-		1,211		5,511		879	2011	1998	13413 US Hwy 301
Dallas, TX		-		137		28,690		2,535		137		31,225		10,073	2006	1995	9330 Poppy Dr.
Dallas, TX		28,450		462		52,488		3		462		52,491		6,735	2012	2004	7115 Greenville Avenue
Dayton, OH		-		730		6,919		-		730		6,919		1,747	2011	1988	1530 Needmore Road
Deerfield Beach, FL		-		2,408		7,809		3		2,408		7,812		2,555	2011	2001	1192 East Newport Center Drive
Delray Beach, FL		-		1,882		34,767		5,693		2,064		40,278		14,345	2006	1985	5130-5150 Linton Blvd.
Durham, NC		-		1,212		22,858		1		1,212		22,859		1,583	2013	2014	1823 Hillandale Road
Edina, MN		-		310		15,132		17		310		15,149		3,181	2010	2003	8100 W 78th St
El Paso, TX		-		677		17,075		2,089		677		19,164		6,931	2006	1997	2400 Trawood Dr.
Everett, WA		-		4,842		26,010		-		4,842		26,010		4,804	2010	2011	13020 Meridian Ave. S.
Fenton, MO		11,578		958		27,485		242		958		27,727		3,199	2013	2014	1011 Bowles Avenue
Fenton, MO		5,544		369		13,911		-		369		13,911		1,110	2013	2014	1055 Bowles Avenue
Flower Mound, TX		-		737		9,654		-		737		9,654		341	2015	2002	2560 Central Park Avenue
Flower Mound, TX		-		4,164		27,529		14		4,164		27,543		1,857	2014	2007	4370 Medical Arts Drive
Flower Mound, TX		-		4,620		-		-		4,620		-		-	2014	2014	Medical Arts Drive
Fort Wayne, IN		16,135		1,105		22,836		-		1,105		22,836		2,898	2012	2009	7916 Jefferson Boulevard
Fort Worth, TX		-		462		26,020		-		462		26,020		1,592	2012	2008	10840 Texas Health Trail
Fort Worth, TX		-		401		6,099		-		401		6,099		345	2014	2006	7200 Oakmont Boulevard
Franklin, TN		-		2,338		12,138		2,184		2,338		14,322		4,398	2007	1988	100 Covey Drive
Franklin, WI		4,942		6,872		7,550		-		6,872		7,550		1,687	2010	1984	9200 W. Loomis Rd.
Frisco, TX		-		-		18,635		1,340		-		19,975		5,794	2007	2004	4401 Coit Road
Frisco, TX		-		-		15,309		2,151		-		17,460		5,914	2007	2004	4461 Coit Road
Gallatin, TN		-		20		21,801		183		20		21,984		5,521	2010	1997	300 Steam Plant Rd
Gig Harbor, WA		-		-		-		30,917		80		30,837		242	2010	2011	11511 Canterwood Blvd NW
Glendale, CA		-		37		18,398		761		37		19,159		5,230	2007	2002	222 W. Eulalia St.
Grand Prairie, TX		-		981		6,086		-		981		6,086		1,187	2012	2012	2740 N State Hwy 360
Grapevine, TX		5,459		-		5,943		4,778		2,081		8,640		401	2014	2010	2040 W State Hwy 114
Grapevine, TX		9,882		3,365		15,669		-		3,365		15,669		1,085	2014	1900	2020 W State Hwy 114
Green Bay, WI		6,871		-		14,891		-		-		14,891		2,939	2010	2002	2253 W. Mason St.
Green Bay, WI		-		-		20,098		-		-		20,098		3,891	2010	2002	2845 Greenbrier Road
Green Bay, WI		-		-		11,696		-		-		11,696		3,145	2010	2002	2845 Greenbrier Road
Greeneville, TN		-		970		10,104		-		970		10,104		2,403	2010	2005	438 East Vann Rd
Greenwood, IN		-		8,316		26,384		-		8,316		26,384		3,705	2012	2013	1260 Innovation Parkway
Greenwood, IN		-		1,262		7,045		645		1,262		7,691		499	2014	2001	333 E County Line Road
Grenwood, IN		-		2,098		21,538		1		2,098		21,538		1,006	2014	2011	3000 S State Road 135
Harker Heights, TX		-		1,907		3,575		-		1,907		3,575		298	2011	2009	E Central Texas Expressway
High Point, NC		-		2,659		29,069		162		2,659		29,230		3,398	2012	2010	4515 Premier Drive
Highland, IL		-		-		8,834		-		-		8,834		699	2012	2010	12860 Troxler Avenue
Houston, TX		14,000		378		31,932		316		378		32,248		6,083	2012	1981	18100 St John Drive
Houston, TX		-		91		10,613		-		91		10,613		1,912	2012	1986	2060 Space Park Drive
Houston, TX		-		10,403		-		-		10,403		-		3	2011	2003	15655 Cypress Woods Medical Drive
Houston, TX		-		5,837		33,128		1		5,837		33,129		6,385	2012	2006	15655 Cypress Woods Medical Drive
Houston, TX		-		3,688		13,313		1		3,688		13,315		1,845	2012	2004	10701 Vintage Preserve Parkway
Houston, TX		-		-		-		75,398		12,815		62,584		6,206	2012	2007	2727 W Holcombe Boulevard
Houston, TX		-		3,102		32,323		640		3,242		32,824		2,289	2014	2012	1900 N Loop W Freeway
Hudson, OH		-		2,587		13,720		8		2,587		13,728		2,546	2012	2001	5655 Hudson Drive
Humble, TX		-		-		9,941		-		-		9,941		290	2013	2014	8233 N. Sam Houston Parkway E.
Jackson, MI		-		607		17,367		42		626		17,389		2,033	2013	2009	1201 E Michigan Avenue
Jupiter, FL		-		2,252		11,415		2,375		2,252		13,790		3,826	2006	2001	550 Heritage Dr.
Jupiter, FL		-		2,825		5,858		566		2,825		6,424		2,288	2007	2004	600 Heritage Dr.
Kenosha, WI		7,494		-		18,058		-		-		18,058		3,488	2010	1993	10400 75th St.
Killeen, TX		-		760		22,878		20		760		22,898		4,986	2010	2010	2405 Clear Creek Rd
Kyle, TX		-		2,569		14,384		84		2,569		14,468		1,038	2014	2009	135 Bunton Road
La Jolla, CA		-		12,855		32,658		-		12,855		32,658		969	2015	1976	4150 Regents Park Row
La Jolla, CA		-		9,425		26,904		-		9,425		26,904		522	2015	1985	4120 & 4130 La Jolla Village Drive
La Quinta, CA		-		3,266		22,066		116		3,279		22,169		1,599	2014	2013	47647 Caleo Bay Drive
Lake St Louis, MO		-		240		14,249		49		240		14,298		3,342	2010	2008	400 Medical Dr
Lakeway, TX		-		2,801		-		-		2,801		-		-	2007	1900	Lohmans Crossing Road
Lakewood, CA		-		146		14,885		1,709		146		16,594		4,743	2006	1993	5750 Downey Ave.
Lakewood, WA		7,041		72		16,017		-		72		16,017		1,873	2012	2002	11307 Bridgeport Way SW
Las Vegas, NV		-		2,319		4,612		1,021		2,319		5,632		1,988	2006	1991	2870 S. Maryland Pkwy.
Las Vegas, NV		-		74		15,287		1,150		74		16,437		4,969	2006	2000	1815 E. Lake Mead Blvd.
Las Vegas, NV		-		433		6,921		212		433		7,133		2,464	2007	1997	1776 E. Warm Springs Rd.
Las Vegas, NV		-		6,127		-		50		6,127		50		-	2007	1975	SW corner of Deer Springs Way and Riley Street
Lenexa, KS		-		540		17,926		256		540		18,182		3,270	2010	2008	23401 Prairie Star Pkwy
Lenexa, KS		-		100		14,058		-		100		14,058		673	2013	2012	23351 Prairie Star Parkway
Lincoln, NE		-		1,420		29,723		25		1,420		29,748		7,625	2010	2003	575 South 70th St
Los Alamitos, CA		-		39		18,635		1,218		39		19,853		5,625	2007	2003	3771 Katella Ave.
Los Gatos, CA		-		488		22,386		1,740		488		24,126		8,383	2006	1993	555 Knowles Dr.
Loxahatchee, FL		-		1,637		5,048		985		1,719		5,951		2,009	2006	1997	12977 Southern Blvd.
Loxahatchee, FL		-		1,340		6,509		624		1,440		7,033		2,279	2006	1993	12989 Southern Blvd.
Loxahatchee, FL		-		1,553		4,694		1,018		1,650		5,615		1,791	2006	1994	12983 Southern Blvd.
Marinette, WI		6,036		-		13,538		-		-		13,538		3,146	2010	2002	4061 Old Peshtigo Rd.
Melbourne, FL		-		3,439		50,461		257		3,439		50,718		3,039	2014	2013	2222 South Harbor City Boulevard
Merced, CA		-		-		14,699		5		-		14,704		3,274	2009	2010	315 Mercy Ave.
Merriam, KS		-		176		8,005		8,558		775		15,965		2,094	2011	1972	8800 West 75th Street
Merriam, KS		-		-		1,996		-		-		1,996		782	2011	1980	7301 Frontage Street
Merriam, KS		-		-		10,222		-		-		10,222		4,121	2011	1977	8901 West 74th Street
Merriam, KS		-		-		5,862		-		-		5,862		2,059	2011	1985	9119 West 74th Street
Merriam, KS		-		1,226		24,998		-		1,226		24,998		2,449	2013	2009	9301 West 74th Street
Merrillville, IN		-		-		22,134		632		-		22,766		5,023	2008	2006	101 E. 87th Ave.
Mesa, AZ		-		1,558		9,561		629		1,558		10,190		3,461	2008	1989	6424 East Broadway Road
Mesquite, TX		-		496		3,834		-		496		3,834		531	2012	1994	1575 I-30
Milwaukee, WI		2,569		540		8,457		-		540		8,457		1,767	2010	1930	1218 W. Kilbourn Ave.
Milwaukee, WI		8,962		1,425		11,520		-		1,425		11,520		3,138	2010	1962	3301-3355 W. Forest Home Ave.
Milwaukee, WI		2,242		922		2,185		-		922		2,185		744	2010	1958	840 N. 12th St.
Milwaukee, WI		17,365		-		44,535		-		-		44,535		8,415	2010	1983	2801 W. Kinnickinnic Pkwy.
Mission Hills, CA		25,247		-		42,276		1,090		4,791		38,575		2,886	2014	2013	11550 Indian Hills Road
Moline, IL		-		-		8,783		29		-		8,812		483	2012	2006	3900 28th Avenue Drive
Monticello, MN		8,464		61		18,489		22		61		18,510		1,986	2012	2005	1001 Hart Boulevard
Moorestown, NJ		-		6		50,896		-		6		50,896		6,324	2011	2012	401  Young Avenue
Mount Juliet, TN		3,016		1,566		11,697		1,118		1,566		12,815		4,326	2007	2005	5002 Crossings Circle
Mount Vernon, IL		-		-		24,892		-		-		24,892		3,195	2011	2012	4121 Veterans Memorial Dr
Murrieta, CA		-		-		47,190		486		-		47,676		11,011	2010	2011	28078 Baxter Rd.
Murrieta, CA		-		3,800		-		-		3,800		-		-	2014	2012	28078 Baxter Rd.
Muskego, WI		1,078		964		2,159		-		964		2,159		417	2010	1993	S74 W16775 Janesville Rd.
Nashville, TN		-		1,806		7,165		2,036		1,806		9,201		3,416	2006	1986	310 25th Ave. N.
New Albany, IN		-		2,411		16,494		30		2,411		16,524		993	2014	2007	2210 Green Valley Road
New Berlin, WI		4,156		3,739		8,290		-		3,739		8,290		1,737	2010	1993	14555 W. National Ave.
Niagara Falls, NY		-		1,433		10,891		271		1,597		10,998		4,302	2007	1995	6932 - 6934 Williams Rd
Niagara Falls, NY		-		454		8,362		-		454		8,362		2,358	2007	2004	6930 Williams Rd
Oklahoma City, OK		-		216		19,135		77		216		19,212		2,553	2013	2008	535 NW 9th Street
Oro Valley, AZ		9,395		89		18,339		746		89		19,084		5,423	2007	2004	1521 E. Tangerine Rd.
Oshkosh, WI		-		-		18,339		-		-		18,339		3,515	2010	2000	855 North Wethaven Dr.
Oshkosh, WI		7,467		-		15,881		-		-		15,881		3,012	2010	2000	855 North Wethaven Dr.
Palm Springs, FL		-		739		4,066		494		739		4,560		1,732	2006	1993	1640 S. Congress Ave.
Palm Springs, FL		-		1,182		7,765		563		1,182		8,328		2,978	2006	1997	1630 S. Congress Ave.
Palmer, AK		18,345		217		29,705		1,220		217		30,925		8,475	2007	2006	2490 South Woodworth Loop
Pasadena, TX		-		1,700		8,009		-		1,700		8,009		501	2012	2013	5001 E Sam Houston Parkway S
Pearland, TX		-		1,500		11,253		-		1,500		11,253		613	2012	2015	2515 Business Center Drive
Pearland, TX		-		9,594		32,753		191		9,807		32,731		1,337	2014	2006	11511 Shadow Creek Parkway
Pendleton, OR		-		-		10,312		-		-		10,312		549	2012	2013	3001 St. Anthony Drive
Phoenix, AZ		-		1,149		48,018		11,069		1,149		59,087		18,292	2006	1998	2222 E. Highland Ave.
Pineville, NC		-		961		6,974		2,515		1,077		9,373		3,343	2006	1988	10512 Park Rd.
Plano, TX		-		5,423		20,698		-		5,423		20,698		9,178	2008	2007	6957 Plano Parkway
Plano, TX		52,479		793		83,209		578		793		83,787		13,469	2012	2005	6020 West Parker Road
Plantation, FL		-		8,563		10,666		3,169		8,575		13,823		5,716	2006	1997	851-865 SW 78th Ave.
Plantation, FL		-		8,848		9,262		587		8,908		9,789		5,824	2006	1996	600 Pine Island Rd.
Plymouth, WI		1,258		1,250		1,870		-		1,250		1,870		440	2010	1991	2636 Eastern Ave.
Portland, ME		-		655		25,930		13		655		25,943		4,949	2011	2008	195 Fore River Parkway
Redmond, WA		-		5,015		26,709		284		5,015		26,993		5,122	2010	2011	18000 NE Union Hill Rd.
Reno, NV		-		1,117		21,972		1,999		1,117		23,970		7,123	2006	1991	343 Elm St.
Richmond, VA		-		2,969		26,697		60		3,004		26,722		4,413	2012	2008	7001 Forest Avenue
Rockwall, TX		-		132		17,197		3		132		17,200		2,862	2012	2008	3142 Horizon Road
Rogers, AR		-		1,062		29,326		-		1,062		29,326		6,007	2011	2008	2708 Rife Medical Lane
Rolla, MO		-		1,931		47,639		-		1,931		47,639		7,480	2011	2009	1605 Martin Spring Drive
Roswell, NM		-		183		5,851		-		183		5,851		1,116	2011	2011	601 West Country Club Road
Roswell, NM		4,049		883		15,984		-		883		15,984		2,720	2011	2004	350 West Country Club Road
Roswell, NM		-		762		17,171		1		762		17,171		2,333	2011	2006	300 West Country Club Road
Sacramento, CA		-		866		12,756		1,715		866		14,471		4,491	2006	1990	8120 Timberlake Way
Salem, NH		-		1,655		14,050		20		1,655		14,070		1,052	2014	2014	31 Stiles Road
San Antonio, TX		-		1,012		10,545		739		1,012		11,284		4,482	2006	1999	19016 Stone Oak Pkwy.
San Antonio, TX		-		1,038		9,173		-		1,038		9,173		3,565	2006	1999	540 Stone Oak Centre Drive
San Antonio, TX		18,400		4,518		31,041		362		4,548		31,373		6,536	2012	1986	5282 Medical Drive
San Antonio, TX		-		900		17,288		304		900		17,591		1,726	2014	2006	3903 Wiseman Boulevard
Santa Clarita, CA		-		-		2,338		19,664		5,196		16,806		1,125	2014	1900	23861 McBean Parkway
Santa Clarita, CA		-		-		28,384		1,580		5,250		24,714		1,705	2014	1900	23929 McBean Parkway
Santa Clarita, CA		-		278		185		-		278		185		67	2014	1976	23871 McBean Parkway
Santa Clarita, CA		25,000		295		40,262		-		295		40,262		1,525	2014	1998	23803 McBean Parkway
Santa Clarita, CA		-		-		20,618		307		4,407		16,518		1,219	2014	1996	24355 Lyons Avenue
Santa Clarita, CA		-		9,835		-		1,760		11,595		-		-	2014	1986	23861 McBean Parkway
Sarasota, FL		-		62		47,325		864		62		48,190		6,807	2012	1990	1921 Waldemere Street
Seattle, WA		-		4,410		38,428		358		4,410		38,786		8,479	2010	2010	5350 Tallman Ave
Sewell, NJ		-		60		57,929		308		74		58,223		16,141	2007	2009	239 Hurffville-Cross Keys Road
Shakopee, MN		6,350		508		11,412		36		509		11,447		2,701	2010	1996	1515 St Francis Ave
Shakopee, MN		10,739		707		18,089		66		773		18,089		3,142	2010	2007	1601 St Francis Ave
Sheboygan, WI		1,737		1,012		2,216		-		1,012		2,216		526	2010	1958	1813 Ashland Ave.
Shenandoah, TX		-		-		21,135		-		-		21,135		528	2013	2009	106 Vision Park Boulevard
Sherman Oaks, CA		-		-		32,186		1,902		3,121		30,967		2,097	2014	1989	4955 Van Nuys Boulevard
Somerville, NJ		-		3,400		22,244		2		3,400		22,246		4,125	2008	2007	30 Rehill Avenue
Southlake, TX		11,680		592		18,243		149		592		18,392		2,896	2012	2004	1545 East Southlake Boulevard
Southlake, TX		17,800		698		30,549		1,709		698		32,258		4,276	2012	2004	1545 East Southlake Boulevard
Southlake, TX		-		3,000		-		-		3,000		-		-	2014	2013	Central Avenue
Springfield, IL		5,273		-		-		11,919		1,569		10,350		66	2010	1989	1100 East Lincolnshire Blvd
Springfield, IL		1,650		-		-		3,696		177		3,519		23	2010	1988	2801 Mathers Rd
St Paul, MN		-		49		37,695		283		49		37,978		1,465	2014	1969	225 Smith Avenue N.
St. Louis, MO		-		336		17,247		1,119		336		18,366		5,550	2007	2001	2325 Dougherty Rd.
St. Paul, MN		24,781		2,706		39,507		13		2,704		39,523		7,500	2011	2007	435 Phalen Boulevard
Suffern, NY		-		653		37,255		130		696		37,342		6,695	2011	2007	255 Lafayette Avenue
Suffolk, VA		-		1,566		11,511		25		1,566		11,537		3,326	2010	2007	5838 Harbour View Blvd.
Sugar Land, TX		8,305		3,543		15,532		-		3,543		15,532		2,643	2012	2013	11555 University Boulevard
Summit, WI		-		2,899		87,666		-		2,899		87,666		22,984	2008	2009	36500 Aurora Dr.
Tacoma, WA		-		-		64,307		-		-		64,307		8,481	2011	2013	1608 South J Street
Tallahassee, FL		-		-		17,449		-		-		17,449		3,575	2010	2011	One Healing Place
Tampa, FL		-		4,318		12,228		-		4,318		12,222		1,672	2011	2003	14547 Bruce B Downs Blvd
Temple, TX		-		2,900		9,954		26		2,900		9,980		870	2011	2012	2601 Thornton Lane
Tucson, AZ		-		1,302		4,925		847		1,325		5,749		2,170	2008	1995	2055 W. Hospital Dr.
Tustin, CA		-		3,345		2,171		-		3,345		2,171		328	2015	1950	14591 Newport Ave
Tustin, CA		-		3,361		12,039		-		3,361		12,039		200	2015	1989	14642 Newport Ave
Van Nuys, CA		-		-		36,187		-		-		36,187		6,561	2009	1991	6815 Noble Ave.
Voorhees, NJ		-		6,404		24,251		1,471		6,477		25,649		7,515	2006	1997	900 Centennial Blvd.
Voorhees, NJ		-		6		96,075		77		6		96,152		13,977	2010	2012	200 Bowman Drive
Wellington, FL		-		107		16,933		2,587		302		19,325		4,967	2006	2000	10115 Forest Hill Blvd.
Wellington, FL		-		388		13,697		925		388		14,622		3,832	2007	2003	1395 State Rd. 7
West Allis, WI		3,190		1,106		3,309		-		1,106		3,309		938	2010	1961	11333 W. National Ave.
West Seneca, NY		-		917		22,435		2,623		1,665		24,310		7,547	2007	1990	550 Orchard Park Rd
Zephyrhills, FL		-		3,875		27,270		-		3,875		27,270		4,063	2011	1974	38135 Market Square Dr
Outpatient medical total:	$	627,689	$	490,437	$	4,274,941	$	278,333	$	535,720	$	4,507,983	$	794,063

116

Assets held for sale:
Akron, OH	$	-	$	300	$	20,200	$	-	$	-	$	-	$	-	2009	2008	200 E. Market St.
Amelia Island, FL		-		3,290		24,310		-		-		-		-	2005	1998	48 Osprey Village Dr.
Austin, TX		-		730		18,970		-		-		-		-	2007	2006	3200 W. Slaughter Lane
Baytown, TX		-		450		6,150		-		-		-		-	2002	2000	3921 N. Main St.
Baytown, TX		-		540		11,110		-		-		-		-	2009	2008	2000 West Baker Lane
Bellaire, TX		-		4,551		46,105		-		-		-		-	2006	2005	5410 W. Loop S.
Bellaire, TX		-		2,972		33,445		-		-		-		-	2006	2005	5420 W. Loop S.
Bellevue, WI		-		1,740		18,260		-		-		-		-	2006	2004	1660 Hoffman Rd.
Bellingham, MA		-		9,270		-		-		-		2,156		-	2007	2015	Maple Street and High Street
Bridgeton, MO		-		-		30,221		-		-		-		-	2011	2011	12380 DePaul Drive
Brookline, MA		-		2,760		9,217		-		-		-		-	2011	1984	30 Webster Street
Columbus, OH		-		-		-		6,710		-		6,710		-	2012	2013	750 Mt. Carmel Mall
Coral Springs, FL		-		1,598		10,627		-		-		9,246		-	2006	1992	1725 N. University Dr.
Corpus Christi, TX		-		400		1,916		-		-		-		-	2005	1985	1101 S. Alameda
DeForest, WI		-		250		5,350		-		-		-		-	2007	2006	6902 Parkside Circle
Denton, TX		-		-		19,407		-		-		-		-	2007	2005	2900 North I-35
Denver, CO		-		2,530		9,514		-		-		-		-	2005	1986	3701 W. Radcliffe Ave.
Fayetteville, GA		-		959		7,540		-		-		6,733		-	2006	1999	1275 Hwy. 54 W.
Frisco, TX		-		130		16,445		-		-		-		-	2012	2010	2990 Legacy Drive
Germantown, TN		-		3,049		12,456		-		-		12,202		-	2006	2002	1325 Wolf Park Drive
Grand Blanc, MI		-		700		7,843		-		-		-		-	2011	2012	5400 East Baldwin
Greenfield, WI		-		600		6,626		-		-		-		-	2006	2006	3933 S. Prairie Hill Lane
Greenville, SC		-		5,400		100,523		-		-		-		-	2006	2009	10 Fountainview Terrace
Hattiesburg, MS		-		450		15,518		-		-		14,089		-	2010	2012	217 Methodist Hospital Blvd
Hermitage, TN		-		1,500		9,856		-		-		10,213		-	2011	1983	4131 Andrew Jackson Parkway
Houston, TX		-		860		18,715		-		-		-		-	2007	2006	8702 South Course Drive
Houston, TX		-		630		5,970		-		-		-		-	2002	1995	3625 Green Crest Dr.
Kenosha, WI		-		1,500		9,139		-		-		-		-	2007	2009	6300 67th Street
Lapeer, MI		-		220		7,625		-		-		-		-	2011	2012	2323 Demille Road
McHenry, IL		-		3,550		15,300		-		-		-		-	2006	2004	3300 Charles Miller Rd.
Melbourne, FL		-		2,540		21,319		-		-		-		-	2010	2012	3260 N Harbor City Blvd
Memphis, TN		-		390		9,660		-		-		-		-	2010	1981	141 N. McLean Blvd.
Merrillville, IN		-		1,080		3,413		-		-		-		-	2010	2011	300 W. 89th Ave.
Merrillville, IN		-		643		7,084		-		-		-		-	1997	1999	101 W. 87th Ave.
Millersville, MD		-		680		1,020		-		-		680		-	2011	2000	899 Cecil Avenue
Morrow, GA		-		818		8,064		-		-		5,913		-	2007	1990	6635 Lake Drive
Mount Airy, NC		-		270		6,430		-		-		-		-	2005	1998	1000 Ridgecrest Lane
Murrieta, CA		-		8,800		202,412		-		-		-		-	2008	2010	28062 Baxter Road
Myrtle Beach, SC		-		6,890		41,526		-		-		-		-	2007	2009	101 Brightwater Dr.
Neenah, WI		-		630		15,120		-		-		-		-	2010	1991	131 E. North Water St.
Orange Village, OH		-		610		7,419		-		-		6,096		-	2007	1985	3755 Orange Place
Oshkosh, WI		-		900		3,800		-		-		-		-	2006	2005	711 Bayshore Drive
Oshkosh, WI		-		400		23,237		-		-		-		-	2007	2008	631 Hazel Street
Overland Park, KS		-		1,120		8,360		-		-		-		-	2005	1970	7541 Switzer St.
Panama City Beach, FL		-		900		7,717		-		-		7,716		-	2011	1996	6012 Magnolia Beach Road
Pasadena, TX		-		720		24,080		-		-		-		-	2007	2005	3434 Watters Rd.
Pawleys Island, SC		-		2,020		32,590		-		-		-		-	2005	1997	120 Lakes at Litchfield Dr.
Saint Simons Island, GA		-		6,440		50,060		-		-		-		-	2008	2007	136 Marsh's Edge Lane
San Antonio, TX		-		560		7,315		-		-		-		-	2002	2000	5437 Eisenhaur Rd.
San Antonio, TX		-		640		13,360		-		-		-		-	2007	2004	8503 Mystic Park
Scituate, MA		-		1,740		10,640		-		-		-		-	2005	1976	309 Driftway
Sheboygan, WI		-		80		5,320		-		-		-		-	2006	2006	4221 Kadlec Dr.
Silver Spring, MD		-		1,150		9,252		-		-		-		-	2012	1968	12325 New Hampshire
Spartanburg, SC		-		3,350		15,750		-		-		-		-	2005	1997	110 Summit Hills Dr.
St. Louis, MO		-		1,890		12,165		-		-		12,472		-	2010	1999	6543 Chippewa St
Tampa, FL		-		-		-		17,685		-		17,685		-	2012	1984	3000 Medical Park Drive
Thomasville, GA		-		530		13,899		-		-		13,193		-	2011	1987	423 Covington Avenue
Tucson, AZ		-		930		13,399		-		-		-		-	2005	1985	6211 N. La Cholla Blvd.
Virginia Beach, VA		-		-		-		16,555		-		16,555		-	2011	2007	828 Healthy Way
Waukesha, WI		-		1,100		14,910		-		-		-		-	2008	2009	3217 Fiddlers Creek Dr
Webster, TX		-		360		5,940		-		-		-		-	2002	2000	17231 Mill Forest
West Palm Beach, FL		-		628		14,740		-		-		10,762		-	2006	1993	5325 Greenwood Ave.
West Palm Beach, FL		-		610		14,618		-		-		10,575		-	2006	1991	927 45th St.
Westerville, OH		-		-		-		6,954		-		6,954		-	2012	2010	444 N Cleveland Avenue
Winston-Salem, NC	$	-	$	5,700	$	13,550	$	-	$	-	$	-	$	-	2005	1997	2101 Homestead Hills
Assets held for sale total	$	-	$	106,048	$	1,136,527	$	47,904	$	-	$	169,950		-

120

Summary:
Triple-net	$	554,014	$	1,003,748	$	10,800,837	$	600,549	$	1,032,860	$	11,372,276	$	1,539,033
Seniors housing operating		2,290,552		972,005		10,569,105		446,629		994,865		10,992,868		1,463,201
Outpatient medical		627,689		490,437		4,274,941		278,333		535,720		4,507,983		794,063
Construction in progress		-		-		258,968		-		-		258,968		-
Total continuing operating properties		3,472,255		2,466,190		25,903,851		1,325,511		2,563,445		27,132,095		3,796,297
Assets held for sale		-		106,048		1,136,527		47,904		-		169,950		-
Total investments in real property owned	$	3,472,255	$	2,572,238	$	27,040,378	$	1,373,415	$	2,563,445	$	27,302,045	$	3,796,297
(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.
(2) Represents real property asset associated with a capital lease.

121

					Year Ended December 31,
					2015		2014		2013
Reconciliation of real property:					(in thousands)
	Investment in real estate:
		Balance at beginning of year		$	25,491,935	$	23,734,733	$	18,082,399
		Additions:
			Acquisitions		3,364,891		2,210,600		3,597,955
			Improvements		445,625		380,298		408,844
			Assumed other items, net		389,256		160,897		772,972
			Assumed debt		1,064,810		265,152		1,340,939
		Total additions			5,264,582		3,016,947		6,120,710
		Deductions:
			Cost of real estate sold		(449,932)		(916,997)		(498,564)
			Reclassification of accumulated depreciation and amortization for assets held for sale		(41,464)		(64,476)		(3,730)
			Impairment of assets		(2,220)		-		-
		Total deductions			(493,616)		(981,473)		(502,294)
		Foreign currency translation			(397,411)		(278,272)		33,918
		Balance at end of year(1)		$	29,865,490	$	25,491,935	$	23,734,733
	Accumulated depreciation:
		Balance at beginning of year		$	3,020,908	$	2,386,658	$	1,555,055
		Additions:
			Depreciation and amortization expenses		826,240		844,130		873,960
			Amortization of above market leases		11,912		7,935		7,831
		Total additions			838,152		852,065		881,791
		Deductions:
			Sale of properties		(69,735)		(123,582)		(49,625)
			Reclassification of accumulated depreciation and amortization for assets held for sale		(41,464)		(64,476)		(3,730)
		Total deductions			(111,199)		(188,058)		(53,355)
		Foreign currency translation			48,436		(29,757)		3,167
		Balance at end of year		$	3,796,297	$	3,020,908	$	2,386,658
(1) The aggregate cost for tax purposes for real property equals $19,159,762,000, $21,621,760,000, and $20,260,297,000 at December 31, 2015, 2014 and 2013, respectively.

122

Welltower Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2015
							(in thousands)
Location	Segment	Interest Rate	Final Maturity Date		Monthly Payment Terms		Prior Liens		Face Amount of Mortgages		Carrying Amount of Mortgages		Principal Amount of Loans Subject to Delinquent Principal or Interest
First mortgages relating to 1 property located in:
California	Outpatient Medical	6.08%	12/22/17	$	309,681	$	-	$	65,000	$	60,902	$	-
United Kingdom	Triple-Net	7.00%	04/19/18		127,412		-		21,382		21,382		-
United Kingdom	Triple-Net	7.00%	11/21/18		121,437		-		20,497		20,497		-
Massachusetts	Triple-Net	7.86%	12/31/16		35,434		-		21,000		5,316		-
United Kingdom	Triple-Net	7.00%	12/31/19		55,858		-		27,133		9,737		-
United Kingdom	Triple-Net	8.25%	06/11/19		14,973		-		15,262		2,216		-
United Kingdom	Triple-Net	8.00%	07/31/19		4,737		-		22,119		1,629		-
United Kingdom	Triple-Net	8.50%	05/01/16		39,496		-		9,721		6,429		-
United Kingdom	Triple-Net	7.54%	07/31/15		9,437		-		3,097		1,474		-
Oklahoma	Triple-Net	8.42%	10/28/19		59,007		-		11,610		8,719		-
Oregon	Triple-Net	7.10%	05/01/16		1,357		-		225		225		-
Pennsylvania	Triple-Net	7.10%	03/01/16		1,479		-		250		250		-
Texas	Triple-Net	8.00%	02/28/21		53,507		-		7,875		7,875		-
First mortgage relating to multiple properties:
Four properties in the United Kingdom	Triple-Net	7.50%	11/30/19	$	85,135	$	-	$	13,742	$	13,409	$	-
49 properties in seven states	Triple-Net	9.75%	02/28/17		2,589,041		-		360,000		305,833		-
15 properties in eight states	Triple-Net	8.00%	11/30/17		440,877		-		171,090		134,100		-
Second mortgages relating to 1 property located in:
Connecticut	Triple-Net	8.11%	04/01/18	$	39,658	$	16,009	$	5,961	$	5,961	$	-
Texas	Triple-Net	12.17%	05/01/19		31,009		11,489		3,100		3,100		-
Florida	Triple-Net	12.17%	07/01/18		27,008		9,283		2,700		2,700		-
Florida	Triple-Net	12.17%	11/01/18		27,008		11,654		2,700		2,700		-
Indiana	Triple-Net	10.50%	04/01/19		25,264		11,211		2,887		2,887		-
Indiana	Triple-Net	10.50%	04/01/19		17,320		8,202		1,979		1,979		-
Kansas	Triple-Net	10.50%	09/19/19		15,403		1,228		1,760		1,760		-
Texas	Triple-Net	10.50%	11/01/19		17,123		-		1,957		1,957		-
Second mortgage relating to multiple properties:
Five properties in three states	Triple-Net	10.00%	12/30/18	$	212,329	$	51,467	$	25,000	$	12,455	$	-
Totals						$	120,543	$	818,047	$	635,492	$	-

				Year Ended December 31,
				2015		2014		2013
Reconciliation of mortgage loans:				(in thousands)
	Balance at beginning of year		$	188,651	$	146,987	$	87,955
	Additions:
		New mortgage loans		524,088		113,996		68,530
		Draws on existing loans		30,550		26,330		-
	Total additions			554,638		140,326		68,530
	Deductions:
		Collections of principal		(80,552)		(49,974)		(8,790)
		Conversions to real property		(23,288)		(45,836)		-
		Charge-offs		-		-		(2,110)
	Total deductions			(103,840)		(95,810)		(10,900)
	Change in balance due to foreign currency translation			(3,957)		(2,852)		1,402
	Balance at end of year		$	635,492	$	188,651	$	146,987

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EXHIBIT INDEX

1.1(a)     Form of Equity Distribution Agreement, dated as of November 12, 2010, entered into by and between the Company and each of UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. (filed with the Commission as Exhibit 1.1 to the Company’s Form 8-K filed November 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

1.1(b)     Form of Amendment No. 1, dated September 1, 2011, to the Equity Distribution Agreements entered into by and between the Company and each of UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. (filed with the Commission as Exhibit 1.1 to the Company’s Form 8-K filed September 8, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

1.1(c)      Form of Amendment No. 2, dated August 5, 2015, to the Equity Distribution Agreements entered into by and between the Company and each of UBS Securities LLC, KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. (filed with the Commission as Exhibit 1.3 to the Company’s Form 8-K filed August 5, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(a)     Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(b)     Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(c)      Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed June 13, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(d)     Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.9 to the Company’s Form 10-Q filed August 9, 2007 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(e)      Certificate of Change of Location of Registered Office and of Registered Agent of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-Q filed August 6, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(f)      Certificate of Designation of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 7, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(g)      Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 10, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(h)     Certificate of Designation of 6.50% Series J Cumulative Redeemable Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 8, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(i)       Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 6, 2014 (File No. 001-08923), and incorporated herein by reference thereto).

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3.1(j)      Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed September 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

3.2          Fifth Amended and Restated By-Laws of the Company (filed with the Commission as Exhibit 3.2 to the Company’s Form 10-Q filed October 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(a)     Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed September 9, 2002 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(b)     Supplemental Indenture No. 1, dated as of September 6, 2002, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 9, 2002 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(c)      Amendment No. 1, dated March 12, 2003, to Supplemental Indenture No. 1, dated as of September 6, 2002, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed March 14, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(d)     Supplemental Indenture No. 2, dated as of September 10, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 24, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(e)      Amendment No. 1, dated September 16, 2003, to Supplemental Indenture No. 2, dated as of September 10, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.4 to the Company’s Form 8-K filed September 24, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(f)      Supplemental Indenture No. 3, dated as of October 29, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed October 30, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(g)      Amendment No. 1, dated September 13, 2004, to Supplemental Indenture No. 3, dated as of October 29, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and The Bank of New York Trust Company, N.A., as successor to Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed September 13, 2004 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(h)     Supplemental Indenture No. 4, dated as of April 27, 2005, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and The Bank of New York Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed April 28, 2005 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(i)       Supplemental Indenture No. 5, dated as of November 30, 2005, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and The Bank of New York Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed November 30, 2005 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(a)     Indenture, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(b)     Supplemental Indenture No. 1, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

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4.2(c)      Amendment No. 1 to Supplemental Indenture No. 1, dated as of June 18, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 18, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(d)     Supplemental Indenture No. 2, dated as of April 7, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 7, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(e)      Amendment No. 1 to Supplemental Indenture No. 2, dated as of June 8, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 8, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(f)      Supplemental Indenture No. 3, dated as of September 10, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 13, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(g)      Supplemental Indenture No. 4, dated as of November 16, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 16, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(h)     Supplemental Indenture No. 5, dated as of March 14, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 14, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(i)       Supplemental Indenture No. 6, dated as of April 3, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 4, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(j)      Supplemental Indenture No. 7, dated as of December 6, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed December 11, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(k)     Supplemental Indenture No. 8, dated as of October 7, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed October 9, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(l)       Supplemental Indenture No. 9, dated as of November 20, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 20, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(m)    Supplemental Indenture No. 10, dated as of November 25, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 25, 2014 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(n)     Supplemental Indenture No. 11, dated as of May 26, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed May 27, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(o)     Amendment No. 1 to Supplemental Indenture No. 11, dated as of October 19, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed October 20, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

4.3          Form of Indenture for Senior Subordinated Debt Securities (filed with the Commission as Exhibit 4.9 to the Company’s Form S-3 (File No. 333-73936) filed November 21, 2001, and incorporated herein by reference thereto).

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4.4          Form of Indenture for Junior Subordinated Debt Securities (filed with the Commission as Exhibit 4.10 to the Company’s Form S-3 (File No. 333-73936) filed November 21, 2001, and incorporated herein by reference thereto).

4.5(a)     Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada.

4.5(b)     First Supplemental Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada.

10.1        Credit Agreement dated as of July 25, 2014 by and among the Company; the lenders listed therein; KeyBank National Association, as administrative agent, L/C issuer and a swingline lender; Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Deutsche Bank Securities Inc., as documentation agent; Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc. and Deutsche Bank Securities Inc., as U.S. joint lead arrangers; Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and RBC Capital Markets, as Canadian joint lead arrangers; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as joint book runners (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed July 31, 2014 (File No. 001-08923), and incorporated herein by reference thereto).

10.2        Equity Purchase Agreement, dated as of February 28, 2011, by and among the Company, FC-GEN Investment, LLC and FC-GEN Operations Investment, LLC (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 28, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

10.3(a)   Amended and Restated Health Care REIT, Inc. 2005 Long-Term Incentive Plan (filed with the Commission as Appendix A to the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, filed March 25, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(b)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.18 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(c)   Form of Amendment to Stock Option Agreements (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.6 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(d)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.8 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(e)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.19 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(f)    Form of Amendment to Stock Option Agreements (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.7 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(g)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.9 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(h)   Form of Stock Option Agreement (without Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.20 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

127

10.3(i)    Form of Stock Option Agreement (without Dividend Equivalent Rights) for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(j)    Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.21 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(k)   Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(l)    Form of Restricted Stock Agreement for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.22 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(m)  Form of Restricted Stock Agreement for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.23 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(n)   Form of Restricted Stock Agreement for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(o)   Form of Restricted Stock Agreement for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(p)   Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.24 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(q)   Form of Amendment to Deferred Stock Unit Grant Agreements for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.10 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(r)    Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.11 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(s)    Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.5 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.4        Retirement and Consulting Agreement, dated April 13, 2014, between the Company and George L. Chapman (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed May 8, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*

10.5(a)   Amended and Restated Employment Agreement, dated December 28, 2014, between the Company and Thomas J. DeRosa.*

10.5(b)   Performance-Based Restricted Stock Unit Grant Agreement, dated effective as of July 30, 2014, between the Company and Thomas J. DeRosa (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed November 4, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*

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10.6        Second Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Scott A. Estes (filed with the Commission as Exhibit 10.4 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.7(a)   Executive Retirement Agreement, effective July 1, 2015, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.7(b)   Consulting Agreement, effective July 1, 2015, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.8        Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Jeffrey H. Miller (filed with the Commission as Exhibit 10.8 to the Company’s Form 10-K filed March 2, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.9        Employment Agreement, dated March 11, 2013, by and between the Company and Scott M. Brinker (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 7, 2013 (File No. 001-08923), and incorporated herein by reference thereto).*

10.10      Third Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Erin C. Ibele (filed with the Commission as Exhibit 10.11 to the Company’s Form 10-K filed March 2, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.11      Amended and Restated Health Care REIT, Inc. Supplemental Executive Retirement Plan, dated December 29, 2008 (filed with the Commission as Exhibit 10.12 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12      Form of Indemnification Agreement between the Company and each director, executive officer and officer of the Company (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 18, 2005 (File No. 001-08923), and incorporated herein by reference thereto).*

10.13      Summary of Director Compensation (filed with the Commission as Exhibit 10.13 to the Company’s Form 10-K filed February 20, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.14      Health Care REIT, Inc. 2013-2015 Long-Term Incentive Program, as Amended and Restated (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 8, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*

10.15(a) Health Care REIT, Inc. 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.15(b) Form of Performance Restricted Stock Unit Award Agreement under the 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

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

21           Subsidiaries of the Company.

23           Consent of Ernst & Young LLP, independent registered public accounting firm.

24           Powers of Attorney.

129

31.1        Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2        Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1        Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.

32.2        Certification pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer.

101.INS     XBRL Instance Document**

101.SCH   XBRL Taxonomy Extension Schema Document**

101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document**

101.LAB   XBRL Taxonomy Extension Label Linkbase Document**

101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document**

101.DEF    XBRL Taxonomy Extension Definition Linkbase Document**

*

Management Contract or Compensatory Plan or Arrangement.

**

Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at December 31, 2015 and 2014, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iii) the Consolidated Statements of Equity for the years ended December 31, 2015, 2014 and 2013, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, (v) the Notes to Consolidated Financial Statements, (vi) Schedule III – Real Estate and Accumulated Depreciation and (vii) Schedule IV – Mortgage Loans on Real Estate.

130