PROPERTIES (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Investment in Leased Real Estate Properties

A summary of our investment in leased real estate properties is as follows:


	December 31,
	2019		2018
	(in thousands)
Buildings	$	7,056,106	$	6,056,820
Land		901,246		786,174
Furniture and equipment		515,421		447,610
Site improvements		287,655		250,917
Construction in progress		225,566		204,889
Total real estate investments		8,985,994		7,746,410
Less accumulated depreciation		(1,787,425)		(1,562,619)
Real estate investments – net	$	7,198,569	$	6,183,791

Schedule of Significant Acquisitions

The following tables summarize the significant transactions that occurred in 2019:


	Number of					Total					Building & Site		Furniture		Initial
	Facilities				Country/	Investment			Land		Improvements		& Equipment		Annual
Period	SNF	ALF	Specialty	MOB	State	(in millions)									Cash Yield⁽¹⁾
Q1	1	—	—	—	OH	$	11.9	⁽³⁾	$	1.1	$	10.1	$	0.7	12.00	%
Q2	20	1	11	1	CA, CT, IN, NV, SC, TN, TX		421.6	⁽²⁾		40.1		368.9		12.6	10.27	%
Q2	7	1	3	—	PA, VA		131.8	⁽³⁾		9.9		112.7		9.2	9.35	%
Q3	3	—	—	—	NC, VA		24.9			4.2		18.6		2.1	9.50	%
Q4	58	2	—	—	FL, ID, KY, LA, MS, MO, MT, NC		735.2			61.5		619.4		54.3	8.71	%
Total	89	4	14	1		$	1,325.4		$	116.8	$	1,129.7	$	78.9

(1)

Initial annual cash yield reflects the initial annual cash rent divided by the purchase price.

(2)

The acquisition was accounted for as a business combination. The Company estimated the fair value of the real estate investments acquired on the acquisition date based on certain valuation analyses that have yet to be finalized, and accordingly, the real estate investments acquired, as detailed, are subject to adjustment once the analysis is completed which will be completed within the allowable measurement period. The other acquisitions were accounted for as asset acquisitions.

(3)

Acquired via a deed-in-lieu of foreclosure.


	Number of			Total					Building & Site		Furniture		Initial
	Facilities		Country/	Investment⁽⁴⁾			Land		Improvements		& Equipment		Annual
Period	SNF	ALF/ILF	State	(in millions)									Cash Yield⁽³⁾
Q1	—	1	UK	$	4.0	⁽¹⁾	$	0.9	$	2.9	$	0.2	8.50	%
Q1	—	1	UK		5.7	⁽²⁾		1.4		4.1		0.2	8.50	%
Q1	1	—	PA		7.4			1.6		5.4		0.4	9.50	%
Q1	1	—	VA		13.2			2.4		10.5		0.3	9.50	%
Q2	5	—	TX		22.8			0.5		20.4		1.9	9.50	%
Q4	3	1	PA		35.1			4.1		29.2		1.8	9.50	%
Q4	1	—	IN		8.3			1.7		6.0		0.6	9.50	%
Q4	1	—	OH		9.2			0.8		7.9		0.5	9.50	%
Total	12	3		$	105.7		$	13.4	$	86.4	$	5.9

(1)	We recorded a non-cash deferred tax liability of approximately $0.4 million in connection with this acquisition.

(2)	We recorded a non-cash deferred tax liability of approximately $0.2 million in connection with this acquisition.

(3)	Initial annual cash yield reflects the initial annual cash rent divided by the purchase price.

(4)	All of these acquisitions were accounted for as asset acquisitions.


	Number of			Total					Building & Site		Furniture		Initial
	Facilities		Country/	Investment⁽⁴⁾			Land		Improvements		& Equipment		Annual
Period	SNF	ALF/ILF	State	(in millions)									Cash Yield ⁽²⁾
Q1	—	1	VA	$	7.6		$	0.5	$	6.8	$	0.3	7.50	%
Q2	1	—	NC		8.6			0.7		7.3		0.6	9.50	%
Q2	—	18	UK		124.2	⁽¹⁾		34.1		85.1		5.0	8.50	%
Q3	—	1	TX		2.3			0.7		1.5		0.1	9.25	%
Q3	15	—	IN		211.0			18.0		180.2		12.8	9.50	%
Q3	9	—	TX		19.0	⁽³⁾		1.7		15.5		1.8	18.60	%
Q4	6	—	TX		40.0			1.0		35.1		3.9	9.25	%
Total	31	20		$	412.7		$	56.7	$	331.5	$	24.5

(1)	We recorded a non-cash deferred tax liability and acquisition costs of approximately $8.2 million and $1.2 million, respectively, in connection with this acquisition.

(2)	Initial annual cash yield reflects the initial annual cash rent divided by the purchase price.

(3)

In July 2017, we transitioned nine SNFs formerly subject to a direct financing lease to another operator. As a result of terminating the direct financing lease, we wrote down the facilities to our original cost basis and recorded an impairment on the direct financing lease of approximately $1.8 million. See Note 4 – Direct Financing Leases for additional information.

(4)	All of these acquisitions were accounted for as asset acquisitions.

Schedule of recognized identified assets acquired and liabilities assumed


	(in thousands)
Fair value of net assets acquired:
Real estate investments ⁽³⁾	$	421,600
Mortgage notes receivable (see Note 5)		108,097
Other investments		19,192
Investment in unconsolidated joint venture		73,834
Cash		4,067
Contractual receivables		1,461
Other assets ^{(1) (3)}		32,819
Total investments		661,070
Debt		(285,100)
Accrued expenses and other liabilities ⁽²⁾⁽³⁾		(30,421)
Fair value of net assets acquired	$	345,549

(1) Includes approximately $26.8 million in above market lease assets.

(2) Includes approximately $7.5 million in below market lease liabilities.

(3)	With the exception of real estate investments, above market lease assets and below market lease liabilities, the fair value estimates above are final.

Schedule of pro forma information not indicative of future operations



	Pro Forma
	Year Ended December 31,
	2019			2018
		(in thousands, except per share amounts, unaudited)

Pro forma revenues	$	950,318	$	938,782
Pro forma net income	$	362,220	$	321,232

Earnings per share – diluted:
Net income – as reported	$	1.58	$	1.40
Net income – pro forma	$	1.60	$	1.48

Encore Portfolio [Member]

Real Estate Properties [Line Items]

Schedule of recognized identified assets acquired and liabilities assumed


	(in thousands)
Fair value of net assets acquired:
Real estate investments	$	735,182
Other investments		600
Contractual receivables		2,216
Cash		227
Other assets		28,173
Total investments		766,398
Secured borrowings		(388,627)
Accrued expenses and other liabilities		(8,978)
Fair value of net assets acquired	$	368,793