Real Estate Activities (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Revenue by Operator

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Schedule of Revenue from External Customers by Geographic Areas

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Assets Acquired

For the years ended December 31, 2018, 2017, and 2016, we acquired the following assets:

	2018			2017			2016
	(in thousands)
Assets Acquired
Land	$	71,880		$	240,993		$	91,071
Building		686,739			985,219			655,324
Intangible lease assets — subject to amortization    (weighted average useful life of 27.9 years in 2018,    27.7 years in 2017, and 28.5 years in 2016)		90,651			181,004			94,167
Net investments in direct financing leases		—			40,450			178,000
Mortgage loans		—			700,000			600,000
Other loans		336,458			—			—
Equity investments and other assets		245,267			100,000			70,166
Liabilities assumed		—			(878	)		(6,319	)
Total assets acquired	$	1,430,995		$	2,246,788		$	1,682,409
Loans repaid(1)		(764,447	)		—			(193,262	)
Total net assets acquired	$	666,548		$	2,246,788		$	1,489,147

(1) The 2018 column includes $0.8 billion of loans advanced to Steward in 2016 and repaid in 2018 as part of sale leaseback conversion described below. The 2016 column includes $93.3 million of loans advanced to Capella⁽²⁾ in 2015 and repaid in 2016 as a part of the Capella transaction (2), along with $100.0 million of loans advanced to Prime Healthcare Services, Inc. (“Prime”) in 2015 and repaid in 2016 as part of the sale leaseback conversion of four properties in New Jersey.

(2) In 2018, LifePoint Health, Inc. (“LifePoint”) merged with RCCH, who acquired Capella Healthcare, Inc. (“Capella”) in 2016.  Any reference to either LifePoint, RCCH, or Capella represent the same entity.

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, 2018		Estimated Rent Commencement Date
Circle Health (Birmingham, England)	$	43,288	$	28,881	2Q 2019
Circle Health Rehabilitation (Birmingham, England)		21,505		9,081	3Q 2019
Surgery Partners (Idaho Falls, Idaho)		113,468		46,210	1Q 2020
	$	178,261	$	84,172

Amortization Expense from Existing Lease Intangible Assets

We recorded amortization expense related to intangible lease assets of $17.6 million, $15.8 million, and $13.4 million in 2018, 2017, and 2016, respectively, and expect to recognize amortization expense from existing lease intangible assets as follows (amounts in thousands):

For the Year Ended December 31:
2019	$	16,687
2020		16,507
2021		16,493
2022		16,479
2023		16,413

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, 2018			As of December 31, 2017
Minimum lease payments receivable	$	2,091,504		$	2,294,081
Estimated residual values		424,719			448,339
Less unearned income		(1,832,170	)		(2,043,693	)
Net investment in direct financing leases	$	684,053		$	698,727

Minimum Rental Payments Due over the Remaining Lease Term under Operating Leases

Minimum rental payments due to us over the remaining lease term under operating leases and DFLs at December 31, 2018, are as follows (amounts in thousands):

	Total Under Operating Leases		Total Under DFLs		Total
2019	$	433,542	$	64,971	$	498,513
2020		437,025		66,270		503,295
2021		445,598		67,595		513,193
2022		450,592		68,947		519,539
2023		457,732		70,326		528,058
Thereafter		9,612,430		1,544,035		11,156,465
	$	11,836,919	$	1,882,144	$	13,719,063

Summary of Loans

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

	As of December 31, 2018					As of December 31, 2017
	Balance		Weighted Average Interest Rate			Balance		Weighted Average Interest Rate
Mortgage loans	$	1,213,322		8.8	%	$	1,778,316		8.3	%
Acquisition loans		3,454		10.8	%		118,448		13.8	%
Working capital and other loans		369,744		5.4	%		31,760		7.6	%
	$	1,586,520				$	1,928,524

2018 [Member]

Summary of Operations for Disposed Assets

The properties sold during 2018 did not meet the definition of discontinued operations. However, the following represents the operating results (excluding the St. Joseph sale in March 2018) from these properties for the periods presented (in thousands):

	For the Year Ended December 31,
	2018			2017			2016
Revenues	$	88,838		$	132,039		$	109,544
Real estate depreciation and amortization		(15,849	)		(31,870	)		(26,410	)
Property-related expenses		(531	)		(404	)		(45	)
Other income (expense) (1)		709,717			(14,168	)		(23,937	)
Income from real estate dispositions, net	$	782,175		$	85,597		$	59,152

(1) Includes approximately $720 million of gains on sale for the twelve months ended December 31, 2018.

2016 [Member]

Summary of Operations for Disposed Assets

The properties sold during 2016 did not meet the definition of discontinued operations. However, the following represents the operating results from these properties (excluding loans repaid in the Capella Disposal Transaction) for the periods presented (in thousands):

	For the Year Ended December 31, 2016
Revenues	$	8,350
Real estate depreciation and amortization		(2,870	)
Property-related expenses		(113	)
Other income(1)		60,283
Income from real estate dispositions, net	$	65,650

(1) Includes approximately $60 million of net gains on sale for the year ended December 31, 2016.