Real Estate and Lending Activities (Tables)

9 Months Ended

Sep. 30, 2017

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Assets Acquired

We acquired the following assets (in thousands):

	Nine Months Ended September 30,
	2017			2016
Assets Acquired
Land and land improvements	$	196,094		$	13,602
Building		987,442			125,744
Intangible lease assets — subject to amortization (weighted average useful life 28.7 years for 2017 and 19.4 years for 2016)		128,961			10,754
Net investments in direct financing leases		40,450			63,000
Mortgage loans		700,000			—
Equity investments		100,000			—
Liabilities assumed		(878	)		—
Total assets acquired	$	2,152,069		$	213,100
Loans repaid (1)		—			(93,262	)
Total net assets acquired	$	2,152,069		$	119,838

(1) $93.3 million loans advanced to Capella (now RCCH Healthcare Partners (“RCCH”)) in 2015 and repaid in 2016 as a part of the Capella Transaction.

Schedule of Unaudited Supplemental Pro Forma Operating Data

The unaudited supplemental pro forma operating data is not necessarily indicative of what the actual results of operations would have been assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods (in thousands, except per share/unit amounts).

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2017		2016		2017		2016
Total revenues	$	209,368	$	207,898	$	623,635	$	622,798
Net income	$	102,112	$	107,863	$	311,306	$	307,645
Net income per share/unit — diluted	$	0.28	$	0.30	$	0.85	$	0.86

Summary of Status Update on Current Development Projects

See table below for a status update on our current development projects (in thousands):

Property	Commitment		Costs Incurred as of September 30, 2017		Estimated Completion Date
Ernest (Flagstaff, Arizona)	$	28,067	$	16,619		1Q 2018
Circle (Birmingham, England)		43,221		11,389		1Q 2019
	$	71,288	$	28,008

Summary of Operations for Assets Disposed in 2016

The following represents the operating results (excluding gain on sale, transaction costs, and impairment or other non-cash charges) from the properties which sold during 2016 (excluding loans repaid in the Capella Transaction) for the periods presented (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Revenues	$	—	$	244	$	—	$	7,851
Real estate depreciation and amortization		—		—		—		(1,754	)
Property-related expenses		—		—		—		(114	)
Other income (expense)		—		45		—		(23	)
Income from real estate dispositions, net	$	—	$	289	$	—	$	5,960

Components of Net Investment in Direct Financing Leases

The components of our net investment in DFLs consisted of the following (in thousands):

	As of September 30, 2017			As of December 31, 2016
Minimum lease payments receivable	$	2,312,621		$	2,207,625
Estimated residual values		448,098			407,647
Less: Unearned income		(2,064,890	)		(1,967,170	)
Net investment in direct financing leases	$	695,829		$	648,102

Summary of Loans

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

	As of September 30, 2017		As of December 31, 2016
Mortgage loans	$	1,777,555	$	1,060,400
Acquisition loans		119,256		121,464
Working capital and other loans		32,453		34,257
	$	1,929,264	$	1,216,121

Schedule of Revenue by Operator

Revenue by Operator

	For the Nine Months Ended September 30, 2017					For the Nine Months Ended September 30, 2016
Operators	Total Revenue		Percentage of Total Revenue			Total Revenue		Percentage of Total Revenue
Steward (1)	$	114,776		23.0	%	$	20,969		5.4	%
Prime		94,644		18.9	%		89,389		23.1	%
MEDIAN		73,793		14.8	%		70,242		18.1	%
Ernest		53,007		10.6	%		50,564		13.0	%
Adeptus Health		39,638		7.9	%		25,873		6.7	%
RCCH		30,668		6.1	%		42,776		11.0	%
Other operators		93,258		18.7	%		88,041		22.7	%
Total	$	499,784		100.0	%	$	387,854		100.0	%

(1) Includes approximately $21.6 million and $21 million of revenue for the nine months ended September 30, 2017 and 2016, respectively, from facilities leased to IASIS prior to it being acquired by Steward on September 29, 2017.

Schedule of Revenue from External Customers by Geographic Areas

Revenue by U.S. State and Country

	For the Nine Months Ended September 30, 2017					For the Nine Months Ended September 30, 2016
U.S. States and Other Countries	Total Revenue		Percentage of Total Revenue			Total Revenue		Percentage of Total Revenue
Massachusetts	$	79,741		16.0	%	$	—		—
Texas		74,489		14.9	%		72,811		18.8	%
California		49,681		9.9	%		49,724		12.8	%
New Jersey		32,756		6.6	%		28,398		7.3	%
Arizona		23,902		4.8	%		17,678		4.6	%
All other states		147,606		29.5	%		143,289		36.9	%
Total U.S.	$	408,175		81.7	%	$	311,900		80.4	%
Germany	$	88,525		17.7	%	$	72,718		18.8	%
United Kingdom, Italy, and Spain		3,084		0.6	%		3,236		0.8	%
Total International	$	91,609		18.3	%	$	75,954		19.6	%
Grand Total	$	499,784		100.0	%	$	387,854		100.0	%

Schedule of Gross Assets by Operator

Gross Assets by Operator

	As of September 30, 2017					As of December 31, 2016
Operators	Total Gross Assets		Percentage of Total Gross Assets			Total Gross Assets		Percentage of Total Gross Assets
Steward (1)	$	3,445,379		36.8	%	$	1,609,583		22.5	%
MEDIAN		1,209,767		12.9	%		993,677		13.9	%
Prime		1,118,070		12.0	%		1,144,055		16.0	%
Ernest		631,501		6.7	%		627,906		8.8	%
RCCH		506,265		5.4	%		566,600		7.9	%
Other operators		1,992,448		21.3	%		1,900,397		26.7	%
Other assets		452,505		4.9	%		300,903		4.2	%
Total	$	9,355,935		100.0	%	$	7,143,121		100.0	%

(1) Includes approximately $360 million of gross assets as of December 31, 2016 related to facilities leased to IASIS prior to it being acquired by Steward on September 29, 2017.

Schedule of Gross Assets by Geographic Areas

Gross Assets by U.S. State and Country

	As of September 30, 2017					As of December 31, 2016
U.S. States and Other Countries	Total Gross Assets		Percentage of Total Gross Assets			Total Gross Assets		Percentage of Total Gross Assets
Massachusetts	$	1,284,156		13.7	%	$	1,250,000		17.5	%
Texas		1,275,784		13.6	%		947,443		13.3	%
Utah		1,035,793		11.1	%		107,151		1.5	%
California		542,879		5.8	%		542,889		7.6	%
Arizona		498,844		5.3	%		331,834		4.6	%
All other states		2,506,538		26.8	%		2,234,332		31.3	%
Other domestic assets		397,850		4.3	%		264,215		3.7	%
Total U.S.	$	7,541,844		80.6	%	$	5,677,864		79.5	%
Germany	$	1,556,392		16.6	%	$	1,281,649		17.9	%
United Kingdom, Italy, and Spain		203,044		2.2	%		146,920		2.1	%
Other international assets		54,655		0.6	%		36,688		0.5	%
Total International	$	1,814,091		19.4	%	$	1,465,257		20.5	%
Grand Total	$	9,355,935		100.0	%	$	7,143,121		100.0	%