Real Estate and Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2017

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Assets Acquired

We acquired the following assets:

	2017			2016			2015
	(in thousands)
Assets Acquired
Land	$	229,091		$	91,071		$	120,746
Building		1,027,154			655,324			741,935
Intangible lease assets — subject to amortization (weighted average useful life of 28.0 years in 2017, 28.5 years in 2016 and 30.0 years in 2015)		150,971			94,167			176,383
Net investments in direct financing leases		40,450			178,000			174,801
Mortgage loans		700,000			600,000			380,000
Other loans		—			—			523,605
Equity investments and other assets		100,000			70,166			101,716
Liabilities assumed		(878	)		(6,319	)		(317	)
Total assets acquired	$	2,246,788		$	1,682,409		$	2,218,869
Loans repaid(1)		—			(193,262	)		(385,851	)
Total net assets acquired	$	2,246,788		$	1,489,147		$	1,833,018

(1) The 2016 column includes $93.3 million of loans advanced to Capella in 2015 and repaid in 2016 as a part of the Capella transaction, along with $100.0 million loans advanced to Prime in 2015 and repaid in 2016 as part of the sale leaseback conversion of four properties in New Jersey. The 2015 column includes $385.9 million of loans advanced to MEDIAN in 2014 and repaid in 2015 as a part of the MEDIAN transaction.

Schedule of Unaudited Supplemental Pro Forma Operating Data

The following unaudited supplemental pro forma operating data is presented below as if each acquisition was completed on January 1, 2016 and January 1, 2015 for the year ended December 31, 2017 and 2016, respectively. The unaudited supplemental pro forma operating data is not necessarily indicative of what actuals 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 Year Ended December 31, (Unaudited)
	2017		2016
Total revenues	$	839,568	$	836,211
Net income		418,811		427,295
Net income per share/unit-diluted	$	1.14	$	1.17

Summary of Status on Current Development Projects

See table below for a status summary of our current development projects (in thousands):

Property	Commitment		Costs Incurred as of December 31, 2017		Estimated Completion Date
Ernest (Flagstaff, Arizona)	$	28,067	$	21,794		1Q 2018
Circle (Birmingham, England)		43,592		14,694		1Q 2019
Surgery Partners (Idaho Falls, Idaho)		113,468		11,207		1Q 2020
	$	185,127	$	47,695

Summary of Operations for Disposed Assets in 2016

The properties sold during 2016 did not meet the definition of discontinued operations. However, the following represents the operating results (excluding gain on sale, transaction costs, and impairment or other non-cash charges) from these properties (excluding loans repaid in the Capella Disposal Transaction) for the periods presented (in thousands):

	For the Year Ended December 31,
	2016			2015
Revenues	$	7,851		$	18,112
Real estate depreciation and amortization		(1,754	)		(3,795	)
Property-related expenses		(114	)		(121	)
Other income (expense)		(23	)		1,079
Income from real estate dispositions, net	$	5,960		$	15,275

Amortization Expense from Existing Lease Intangible Assets

We recorded amortization expense related to intangible lease assets of $15.8 million, $13.4 million, and $9.1 million in 2017, 2016, and 2015, respectively, and expect to recognize amortization expense from existing lease intangible assets as follows (amounts in thousands):

For the Year Ended December 31:
2018	$	17,707
2019		17,654
2020		17,440
2021		17,373
2022		17,359

Components of Net Investment in Direct Financing Leases

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

	As of December 31, 2017			As of December 31, 2016
Minimum lease payments receivable	$	2,294,081		$	2,207,625
Estimated residual values		448,339			407,647
Less unearned income		(2,043,693	)		(1,967,170	)
Net investment in direct financing leases	$	698,727		$	648,102

Minimum Rental Payments Due under Operating Leases with Non-Cancelable Terms

Minimum rental payments due to us in future periods under operating leases and DFLs, which have non-cancelable terms extending beyond one year at December 31, 2017, are as follows (amounts in thousands):

	Total Under Operating Leases		Total Under DFLs		Total
2018	$	496,379	$	67,436	$	563,815
2019		499,417		68,784		568,201
2020		502,309		70,160		572,469
2021		509,991		71,563		581,554
2022		503,679		72,994		576,673
Thereafter		10,472,481		1,734,085		12,206,566
	$	12,984,256	$	2,085,022	$	15,069,278

Summary of Loans

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

	As of December 31, 2017					As of December 31, 2016
	Balance		Weighted Average Interest Rate			Balance		Weighted Average Interest Rate
Mortgage loans	$	1,778,316		8.3	%	$	1,060,400		8.8	%
Acquisition loans		118,448		13.8	%		121,464		13.7	%
Working capital and other loans		31,760		7.6	%		34,257		9.0	%
	$	1,928,524				$	1,216,121

Schedule of Revenue by Operator

Revenue by Operator

(Dollar amounts in thousands)

	For the Years Ended December 31,
	2017					2016
Operators	Total Revenue		Percentage of Total Revenue			Total Revenue		Percentage of Total Revenue
Steward(1)	$	190,172		27.0	%	$	54,068		10.0	%
Prime		126,269		17.9	%		120,558		22.3	%
MEDIAN		100,531		14.3	%		93,425		17.3	%
Ernest		70,665		10.0	%		67,742		12.5	%
RCCH		41,890		5.9	%		52,720		9.7	%
Other operators		175,218		24.9	%		152,624		28.2	%
Total	$	704,745		100.0	%	$	541,137		100.0	%

(1) Includes revenue from IASIS prior to being acquired by Steward on September 29, 2017.

Schedule of Revenue from External Customers by Geographic Areas

Revenue by U.S. State and Country

(Dollar amounts in thousands)

	For the Years Ended December 31,
	2017					2016
U.S. States and Other Countries	Total Revenue		Percentage of Total Revenue			Total Revenue		Percentage of Total Revenue
Massachusetts	$	107,195		15.2	%	$	26,098		4.8	%
Texas		102,926		14.6	%		96,992		17.9	%
California		66,241		9.4	%		66,197		12.2	%
Arizona		36,393		5.2	%		23,798		4.4	%
Utah		28,831		4.1	%		9,942		1.8	%
Other states		235,545		33.4	%		216,505		40.1	%
Total U.S.	$	577,131		81.9	%	$	439,532		81.2	%
Germany	$	123,453		17.5	%	$	97,382		18.0	%
United Kingdom, Italy, and Spain		4,161		0.6	%		4,223		0.8	%
Total International	$	127,614		18.1	%	$	101,605		18.8	%
Total	$	704,745		100.0	%	$	541,137		100.0	%