VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2019

Variable Interest Entities [Abstract]

VARIABLE INTEREST ENTITIES

NOTE 7 – VARIABLE INTEREST ENTITIES

The following operators are considered VIEs as of December 31, 2019 and 2018.  Below is a summary of our assets and liabilities associated with each operator as of December 31, 2019 and 2018:

	December 31, 2019		December 31, 2018
	Agemo		Agemo		Orianna
	(in thousands)			(in thousands)
Assets
Real estate investments – net	$	403,389	$	413,396	$	30,459
Investments in direct financing leases - net		—		—		120,545
Other investments		58,687		46,287		40,242
Contractual receivables		18,113		18,017		249
Straight-line rent receivables		46,247		34,203		—
Lease inducement		6,810		2,362		—
Above market lease		—		2		—
Subtotal		533,246		514,267		191,495
Collateral
Letters of credit		(9,253)		(9,253)		—
Personal guarantee		(8,000)		(15,000)		—
Other collateral		(403,389)		(413,396)		(176,253)
Subtotal		(420,642)		(437,649)		(176,253)
Maximum exposure to loss	$	112,604	$	76,618	$	15,242

In determining our maximum exposure to loss from these VIEs, we considered the underlying value of the real estate subject to leases with these operators and other collateral, if any, supporting our other investments, which may include accounts receivable, security deposits, letters of credit or personal guarantees, if any. See Note 4 – Direct Financing Leases regarding our relationship with Orianna, Note 6 – Other Investments regarding the terms of the other investments and Note 20 – Commitments and Contingencies regarding our commitment to provide capital expenditure funding to our operators which includes Agemo.  In May 2018, we reached an out-of-court restructuring agreement with Agemo that provided for the deferral of rent, the extension of the maturity of our lease and loans, and a working capital loan.  If Agemo’s operations deteriorate any further and they are unable to meet their contractual obligations to us, we may be required to account for rental income from them on a cash basis and reserve approximately $71.2 million of contractual receivables, straight-line rent receivables and lease inducements.

The table below reflects our total revenues from Agemo and Orianna for the years ended December 31, 2019, 2018 and 2017:

	2019		2018				2017
	Agemo		Agemo			Orianna		Agemo		Orianna
	(in thousands)
Revenue
Rental income	$	60,639	$	59,291	$	—	$	62,287	$	2,401
Income from direct financing leases		—		—		—		—		29,877
Other investment income		4,502		3,500		3,477		4,884		906
Total (1)	$	65,141	$	62,791	$	3,477	$	67,171	$	33,184

(1) For the years ended December 31, 2019, 2018 and 2017, we received cash rental income and other investment income from Agemo of approximately $53.7 million, $56.8 million and $39.8 million, respectively.