Maryland
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04-3445278
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(State or Other Jurisdiction of Incorporation or
Organization)
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(IRS Employer Identification No.)
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Page
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March 31,
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December 31,
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2018
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2017
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ASSETS
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Real estate properties:
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Land
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$
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848,261
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$
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824,879
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Buildings and improvements
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7,110,013
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6,999,884
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7,958,274
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7,824,763
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Accumulated depreciation
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(1,505,427
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)
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(1,454,477
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)
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6,452,847
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6,370,286
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Cash and cash equivalents
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39,161
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31,238
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Restricted cash
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14,080
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16,083
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Acquired real estate leases and other intangible assets, net
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490,505
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472,265
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Other assets, net
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387,471
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404,147
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Total assets
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$
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7,384,064
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$
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7,294,019
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LIABILITIES AND EQUITY
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Unsecured revolving credit facility
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$
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55,000
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$
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596,000
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Unsecured term loans, net
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547,666
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547,460
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Senior unsecured notes, net
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2,213,811
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1,725,662
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Secured debt and capital leases, net
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828,318
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805,404
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Accrued interest
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35,075
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17,987
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Assumed real estate lease obligations, net
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93,543
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96,018
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Other liabilities
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194,534
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228,300
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Total liabilities
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3,967,947
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4,016,831
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Commitments and contingencies
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Equity:
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Equity attributable to common shareholders:
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Common shares of beneficial interest, $.01 par value: 300,000,000 shares authorized, 237,628,781 and 237,630,409 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
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2,376
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2,376
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Additional paid in capital
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4,609,274
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4,609,316
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Cumulative net income
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2,089,090
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1,766,495
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Cumulative other comprehensive income
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565
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87,231
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Cumulative distributions
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(3,453,142
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)
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(3,360,468
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)
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Total equity attributable to common shareholders
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3,248,163
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3,104,950
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Noncontrolling interest:
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Total equity attributable to noncontrolling interest
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167,954
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172,238
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Total equity
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3,416,117
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3,277,188
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Total liabilities and equity
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$
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7,384,064
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$
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7,294,019
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Three Months Ended March 31,
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2018
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2017
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Revenues:
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Rental income
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$
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173,728
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$
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166,443
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Residents fees and services
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102,087
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98,118
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Total revenues
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275,815
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264,561
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Expenses:
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Property operating expenses
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108,143
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101,057
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Depreciation and amortization
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70,339
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73,175
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General and administrative
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25,118
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15,083
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Acquisition and certain other transaction related costs
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20
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292
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Total expenses
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203,620
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189,607
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Operating income
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72,195
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74,954
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Dividend income
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659
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659
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Unrealized gains and losses on equity securities, net
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27,241
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—
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Interest and other income
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54
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|
120
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Interest expense
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(43,552
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)
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(43,488
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)
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Loss on early extinguishment of debt
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(130
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)
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—
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Income from continuing operations before income tax expense and equity in earnings of an investee
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56,467
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32,245
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Income tax expense
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(260
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)
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(92
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)
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Equity in earnings of an investee
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44
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128
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Income before gain on sale of properties
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56,251
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32,281
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Gain on sale of properties
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181,154
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—
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Net income
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237,405
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32,281
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Net income attributable to noncontrolling interest
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(1,383
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)
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(126
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)
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Net income attributable to common shareholders
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$
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236,022
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$
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32,155
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Other comprehensive income:
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Unrealized gain on investments in available for sale securities
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—
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24,045
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Equity in unrealized (loss) gain of an investee
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(93
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)
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122
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Other comprehensive (loss) income
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(93
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)
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24,167
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Comprehensive income
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237,312
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56,448
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Comprehensive income attributable to noncontrolling interest
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(1,383
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)
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(126
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)
|
||
Comprehensive income attributable to common shareholders
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$
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235,929
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$
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56,322
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Weighted average common shares outstanding (basic)
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237,478
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|
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237,391
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Weighted average common shares outstanding (diluted)
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|
237,493
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|
237,416
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||
|
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Per common share amounts (basic and diluted):
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Net income attributable to common shareholders
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$
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0.99
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$
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0.14
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Three Months Ended March 31,
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||||||
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2018
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2017
|
||||
Cash flows from operating activities:
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Net income
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$
|
237,405
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$
|
32,281
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Adjustments to reconcile net income to cash provided by operating activities:
|
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Depreciation and amortization
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70,339
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73,175
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Amortization of debt issuance costs and debt discounts and premiums
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1,411
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|
|
1,459
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Straight line rental income
|
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(2,993
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)
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(3,429
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)
|
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Amortization of acquired real estate leases and other intangible assets
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(1,381
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)
|
|
(1,291
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)
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||
Loss on early extinguishment of debt
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|
130
|
|
|
—
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|
||
Gain on sale of properties
|
|
(181,154
|
)
|
|
—
|
|
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Unrealized gains and losses on equity securities, net
|
|
(27,241
|
)
|
|
—
|
|
||
Other non-cash adjustments
|
|
(943
|
)
|
|
(943
|
)
|
||
Equity in earnings of an investee
|
|
(44
|
)
|
|
(128
|
)
|
||
Change in assets and liabilities:
|
|
|
|
|
|
|
||
Other assets
|
|
3,097
|
|
|
3,901
|
|
||
Accrued interest
|
|
17,088
|
|
|
15,051
|
|
||
Other liabilities
|
|
(31,680
|
)
|
|
(6,001
|
)
|
||
Net cash provided by operating activities
|
|
84,034
|
|
|
114,075
|
|
||
|
|
|
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|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
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Real estate acquisitions and deposits
|
|
(122,221
|
)
|
|
(14,326
|
)
|
||
Real estate improvements
|
|
(13,443
|
)
|
|
(30,171
|
)
|
||
Proceeds from sale of properties
|
|
216,013
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
|
80,349
|
|
|
(44,497
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Proceeds from issuance of senior unsecured notes, net
|
|
491,560
|
|
|
—
|
|
||
Proceeds from borrowings on revolving credit facility
|
|
316,000
|
|
|
94,000
|
|
||
Repayments of borrowings on revolving credit facility
|
|
(857,000
|
)
|
|
(324,000
|
)
|
||
Repayment of other debt
|
|
(6,166
|
)
|
|
(2,929
|
)
|
||
Loss on early extinguishment of debt settled in cash
|
|
(130
|
)
|
|
—
|
|
||
Payment of debt issuance costs
|
|
(4,296
|
)
|
|
—
|
|
||
Repurchase of common shares
|
|
(90
|
)
|
|
—
|
|
||
Proceeds from noncontrolling interest, net
|
|
—
|
|
|
255,813
|
|
||
Distributions to noncontrolling interest
|
|
(5,667
|
)
|
|
—
|
|
||
Distributions to shareholders
|
|
(92,674
|
)
|
|
(92,642
|
)
|
||
Net cash used in financing activities
|
|
(158,463
|
)
|
|
(69,758
|
)
|
||
|
|
|
|
|
||||
Increase (decrease) in cash and cash equivalents and restricted cash
|
|
5,920
|
|
|
(180
|
)
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
|
47,321
|
|
|
35,578
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
53,241
|
|
|
$
|
35,398
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||
|
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2018
|
|
2017
|
||
Supplemental cash flows information:
|
|
|
|
|
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Interest paid
|
|
25,053
|
|
|
26,978
|
|
|
|
|
|
|
||
Non-cash investing activities:
|
|
|
|
|
||
Acquisitions funded by assumed debt
|
|
(27,798
|
)
|
|
—
|
|
|
|
|
|
|
||
Non-cash financing activities:
|
|
|
|
|
||
Assumption of mortgage notes payable
|
|
27,798
|
|
|
—
|
|
|
|
As of March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
|
$
|
39,161
|
|
|
$
|
32,272
|
|
Restricted cash
|
|
14,080
|
|
|
3,126
|
|
||
Total cash and cash equivalents and restricted cash shown in the statements of cash flows
|
|
$
|
53,241
|
|
|
$
|
35,398
|
|
Date
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|
Location
|
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Leased/Managed
|
|
Number of Properties
|
|
Units
|
|
Cash Paid Plus Assumed Debt
(1)
|
|
Land
|
|
Building and Improvements
|
|
FF&E
|
|
Acquired Real Estate Intangible Assets
|
|
Assumed Debt
|
|
Premium on Assumed Debt
|
|||||||||||||||
January 2018
|
|
Tennessee
|
|
Managed
|
|
1
|
|
88
|
|
|
$
|
19,868
|
|
|
$
|
580
|
|
|
$
|
14,884
|
|
|
$
|
1,209
|
|
|
$
|
3,195
|
|
|
$
|
—
|
|
|
$
|
—
|
|
February 2018
|
|
Arizona
|
|
Managed
|
|
1
|
|
127
|
|
|
22,622
|
|
|
2,017
|
|
|
17,123
|
|
|
390
|
|
|
4,451
|
|
|
16,748
|
|
|
(1,359
|
)
|
|||||||
|
|
|
|
|
|
2
|
|
215
|
|
|
$
|
42,490
|
|
|
$
|
2,597
|
|
|
$
|
32,007
|
|
|
$
|
1,599
|
|
|
$
|
7,646
|
|
|
$
|
16,748
|
|
|
$
|
(1,359
|
)
|
(1)
|
Cash paid plus assumed debt, if any, includes closing costs.
|
Date
|
|
Location
|
|
Number of Properties
|
|
Number of Buildings
|
|
Square Feet (000’s)
|
|
Cash Paid Plus Assumed Debt
(1)
|
|
Land
|
|
Building and Improvements
|
|
Acquired Real Estate Leases
(2)
|
|
Assumed Debt
|
|||||||||||
January 2018
|
|
3 States
|
|
3
|
|
3
|
|
400
|
|
|
$
|
91,698
|
|
|
$
|
16,873
|
|
|
$
|
54,605
|
|
|
$
|
20,220
|
|
|
$
|
—
|
|
March 2018
|
|
Virginia
|
|
1
|
|
1
|
|
135
|
|
|
23,275
|
|
|
2,863
|
|
|
11,105
|
|
|
9,307
|
|
|
11,050
|
|
|||||
|
|
|
|
4
|
|
4
|
|
535
|
|
|
$
|
114,973
|
|
|
$
|
19,736
|
|
|
$
|
65,710
|
|
|
$
|
29,527
|
|
|
$
|
11,050
|
|
(1)
|
Cash paid plus assumed debt, if any, includes closing costs.
|
(2)
|
The weighted average amortization period for acquired real estate leases as of the acquisition dates was
5.8
years.
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
|
|
|
Quoted Prices in
|
|
|
|
Significant
|
||||||||
|
|
|
|
Active Markets for
|
|
Significant Other
|
|
Unobservable
|
||||||||
|
|
|
|
Identical Assets
|
|
Observable Inputs
|
|
Inputs
|
||||||||
Description
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Recurring Fair Value Measurements
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Investment in RMR Inc.
(1)
|
|
$
|
184,487
|
|
|
$
|
184,487
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment in Five Star
(2)
|
|
$
|
5,506
|
|
|
$
|
5,506
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Our
2,637,408
shares of class A common stock of The RMR Group Inc., or RMR Inc., which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is
$69,826
as of
March 31, 2018
. During the three months ended
March 31, 2018
, we recorded an unrealized gain of
$28,088
to adjust the carrying value of our investment in RMR Inc. class A common shares to their fair value.
|
(2)
|
Our
4,235,000
common shares of Five Star, which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is
$6,353
as of
March 31, 2018
. During the three months ended
March 31, 2018
, we recorded an unrealized loss of
$847
to adjust the carrying value of our investment in Five Star common shares to their fair value.
|
|
|
As of March 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
Description
|
|
Carrying Amount
(1)
|
|
Estimated Fair Value
|
|
Carrying Amount
(1)
|
|
Estimated Fair Value
|
||||||||
Senior unsecured notes
|
|
$
|
2,213,811
|
|
|
$
|
2,292,648
|
|
|
$
|
1,725,662
|
|
|
$
|
1,810,882
|
|
Secured debts
(2)
|
|
817,834
|
|
|
793,815
|
|
|
794,710
|
|
|
783,353
|
|
||||
|
|
$
|
3,031,645
|
|
|
$
|
3,086,463
|
|
|
$
|
2,520,372
|
|
|
$
|
2,594,235
|
|
(1)
|
Includes unamortized debt issuance costs, premiums and discounts.
|
(2)
|
We assumed certain of these secured debts in connection with our acquisitions of certain properties. We recorded the assumed secured debts at estimated fair value on the date of assumption and we are amortizing the fair value adjustments, if any, to interest expense over their respective terms to adjust interest expense to the estimated market interest rates as of the date of assumption.
|
|
|
For the Three Months Ended March 31, 2018
|
||||||||||||||||||
|
|
Triple Net Leased Senior Living Communities
|
|
Managed Senior Living Communities
|
|
MOBs
|
|
All Other Operations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rental income
|
|
$
|
67,975
|
|
|
$
|
—
|
|
|
$
|
101,151
|
|
|
$
|
4,602
|
|
|
$
|
173,728
|
|
Residents fees and services
|
|
—
|
|
|
102,087
|
|
|
—
|
|
|
—
|
|
|
102,087
|
|
|||||
Total revenues
|
|
67,975
|
|
|
102,087
|
|
|
101,151
|
|
|
4,602
|
|
|
275,815
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property operating expenses
|
|
—
|
|
|
77,205
|
|
|
30,938
|
|
|
—
|
|
|
108,143
|
|
|||||
Depreciation and amortization
|
|
20,195
|
|
|
14,811
|
|
|
34,385
|
|
|
948
|
|
|
70,339
|
|
|||||
General and administrative
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,118
|
|
|
25,118
|
|
|||||
Acquisition and certain other transaction related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|||||
Total expenses
|
|
20,195
|
|
|
92,016
|
|
|
65,323
|
|
|
26,086
|
|
|
203,620
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income (loss)
|
|
47,780
|
|
|
10,071
|
|
|
35,828
|
|
|
(21,484
|
)
|
|
72,195
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividend income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
659
|
|
|
659
|
|
|||||
Unrealized gains and losses on equity securities, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,241
|
|
|
27,241
|
|
|||||
Interest and other income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|||||
Interest expense
|
|
(571
|
)
|
|
(1,327
|
)
|
|
(5,909
|
)
|
|
(35,745
|
)
|
|
(43,552
|
)
|
|||||
Loss on early extinguishment of debt
|
|
—
|
|
|
(130
|
)
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||||
Income (loss) from continuing operations before income tax expense and equity in earnings of an investee
|
|
47,209
|
|
|
8,614
|
|
|
29,919
|
|
|
(29,275
|
)
|
|
56,467
|
|
|||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(260
|
)
|
|
(260
|
)
|
|||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|||||
Income (loss) before gain on sale of properties
|
|
47,209
|
|
|
8,614
|
|
|
29,919
|
|
|
(29,491
|
)
|
|
56,251
|
|
|||||
Gain on sale of properties
|
|
181,154
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,154
|
|
|||||
Net income (loss)
|
|
228,363
|
|
|
8,614
|
|
|
29,919
|
|
|
(29,491
|
)
|
|
237,405
|
|
|||||
Net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(1,383
|
)
|
|
—
|
|
|
(1,383
|
)
|
|||||
Net income (loss) attributable to common shareholders
|
|
$
|
228,363
|
|
|
$
|
8,614
|
|
|
$
|
28,536
|
|
|
$
|
(29,491
|
)
|
|
$
|
236,022
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
As of March 31, 2018
|
||||||||||||||||||
|
|
Triple Net Leased Senior Living Communities
|
|
Managed Senior Living Communities
|
|
MOBs
|
|
All Other Operations
|
|
Consolidated
|
||||||||||
Total assets
|
|
$
|
2,199,708
|
|
|
$
|
1,313,777
|
|
|
$
|
3,454,428
|
|
|
$
|
416,151
|
|
|
$
|
7,384,064
|
|
|
|
For the Three Months Ended March 31, 2017
|
||||||||||||||||||
|
|
Triple Net Leased Senior Living Communities
|
|
Managed Senior Living Communities
|
|
MOBs
|
|
All Other Operations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rental income
|
|
$
|
67,252
|
|
|
$
|
—
|
|
|
$
|
94,646
|
|
|
$
|
4,545
|
|
|
$
|
166,443
|
|
Residents fees and services
|
|
—
|
|
|
98,118
|
|
|
—
|
|
|
—
|
|
|
98,118
|
|
|||||
Total revenues
|
|
67,252
|
|
|
98,118
|
|
|
94,646
|
|
|
4,545
|
|
|
264,561
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property operating expenses
|
|
—
|
|
|
73,880
|
|
|
27,177
|
|
|
—
|
|
|
101,057
|
|
|||||
Depreciation and amortization
|
|
20,334
|
|
|
20,215
|
|
|
31,678
|
|
|
948
|
|
|
73,175
|
|
|||||
General and administrative
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,083
|
|
|
15,083
|
|
|||||
Acquisition and certain other transaction related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|
292
|
|
|||||
Total expenses
|
|
20,334
|
|
|
94,095
|
|
|
58,855
|
|
|
16,323
|
|
|
189,607
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income (loss)
|
|
46,918
|
|
|
4,023
|
|
|
35,791
|
|
|
(11,778
|
)
|
|
74,954
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividend income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
659
|
|
|
659
|
|
|||||
Interest and other income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
120
|
|
|||||
Interest expense
|
|
(5,339
|
)
|
|
(1,176
|
)
|
|
(6,321
|
)
|
|
(30,652
|
)
|
|
(43,488
|
)
|
|||||
Income (loss) from continuing operations before income tax expense and equity in earnings of an investee
|
|
41,579
|
|
|
2,847
|
|
|
29,470
|
|
|
(41,651
|
)
|
|
32,245
|
|
|||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|
(92
|
)
|
|||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
128
|
|
|||||
Net income (loss)
|
|
41,579
|
|
|
2,847
|
|
|
29,470
|
|
|
(41,615
|
)
|
|
32,281
|
|
|||||
Net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
(126
|
)
|
|||||
Net income (loss) attributable to common shareholders
|
|
$
|
41,579
|
|
|
$
|
2,847
|
|
|
$
|
29,344
|
|
|
$
|
(41,615
|
)
|
|
$
|
32,155
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
As of December 31, 2017
|
||||||||||||||||||
|
|
Triple Net Leased Senior Living Communities
|
|
Managed Senior Living Communities
|
|
MOBs
|
|
All Other Operations
|
|
Consolidated
|
||||||||||
Total assets
|
|
$
|
2,251,756
|
|
|
$
|
1,273,757
|
|
|
$
|
3,367,485
|
|
|
$
|
401,021
|
|
|
$
|
7,294,019
|
|
|
|
Three Months Ended March 31,
|
||||
|
|
2018
|
|
2017
|
||
Weighted average common shares for basic earnings per share
|
|
237,478
|
|
|
237,391
|
|
Effect of dilutive securities: unvested share awards
|
|
15
|
|
|
25
|
|
Weighted average common shares for diluted earnings per share
|
|
237,493
|
|
|
237,416
|
|
(As of March 31, 2018)
|
|
Number of Properties
|
|
Number of Units or Square Feet
|
|
|
|
Carrying Value of Investment
(1)
|
|
% of Total Investment
|
|
Investment per Unit or Square Foot
(2)
|
|
Q1 2018 Revenues
|
|
% of Q1 2018 Revenues
|
|
Q1 2018 NOI
(3)
|
|
% of Q1 2018 NOI
(3)
|
|||||||||||||
Facility Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Independent living
(4)
|
|
67
|
|
|
15,434
|
|
|
|
|
$
|
2,311,544
|
|
|
26.8
|
%
|
|
$
|
149,770
|
|
|
$
|
91,274
|
|
|
33.0
|
%
|
|
$
|
47,515
|
|
|
28.4
|
%
|
Assisted living
(4)
|
|
199
|
|
|
14,640
|
|
|
|
|
2,164,885
|
|
|
25.0
|
%
|
|
$
|
147,875
|
|
|
74,437
|
|
|
27.0
|
%
|
|
40,991
|
|
|
24.4
|
%
|
|||
Skilled nursing facilities
(4)
|
|
39
|
|
|
4,131
|
|
|
|
|
183,854
|
|
|
2.1
|
%
|
|
$
|
44,506
|
|
|
4,351
|
|
|
1.6
|
%
|
|
4,351
|
|
|
2.6
|
%
|
|||
Subtotal senior living communities
|
|
305
|
|
|
34,205
|
|
|
|
|
4,660,283
|
|
|
53.9
|
%
|
|
$
|
136,246
|
|
|
170,062
|
|
|
61.6
|
%
|
|
92,857
|
|
|
55.4
|
%
|
|||
MOBs
(5)
|
|
129
|
|
|
12,602,012
|
|
|
sq. ft.
|
|
3,801,658
|
|
|
44.0
|
%
|
|
$
|
302
|
|
|
101,151
|
|
|
36.7
|
%
|
|
70,213
|
|
|
41.9
|
%
|
|||
Wellness centers
|
|
10
|
|
|
812,000
|
|
|
sq. ft.
|
|
178,110
|
|
|
2.1
|
%
|
|
$
|
219
|
|
|
4,602
|
|
|
1.7
|
%
|
|
4,602
|
|
|
2.7
|
%
|
|||
Total
|
|
444
|
|
|
|
|
|
|
$
|
8,640,051
|
|
|
100.0
|
%
|
|
|
|
|
$
|
275,815
|
|
|
100.0
|
%
|
|
$
|
167,672
|
|
|
100.0
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Tenant / Operator / Managed Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Five Star
|
|
185
|
|
|
20,133
|
|
|
|
|
$
|
2,330,630
|
|
|
27.0
|
%
|
|
$
|
115,762
|
|
|
$
|
51,759
|
|
|
18.8
|
%
|
|
$
|
51,759
|
|
|
30.9
|
%
|
Sunrise / Marriott
(6)
|
|
1
|
|
|
354
|
|
|
|
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
2,776
|
|
|
1.0
|
%
|
|
2,776
|
|
|
1.7
|
%
|
|||
Brookdale
|
|
18
|
|
|
940
|
|
|
|
|
69,669
|
|
|
0.8
|
%
|
|
$
|
74,116
|
|
|
2,019
|
|
|
0.7
|
%
|
|
2,019
|
|
|
1.2
|
%
|
|||
11 private senior living companies (combined)
|
|
29
|
|
|
3,520
|
|
|
|
|
571,760
|
|
|
6.6
|
%
|
|
$
|
162,432
|
|
|
11,421
|
|
|
4.1
|
%
|
|
11,421
|
|
|
6.8
|
%
|
|||
Subtotal triple net leased senior living communities
|
|
233
|
|
|
24,947
|
|
|
|
|
2,972,059
|
|
|
34.4
|
%
|
|
$
|
119,135
|
|
|
67,975
|
|
|
24.6
|
%
|
|
67,975
|
|
|
40.6
|
%
|
|||
Managed senior living communities
(7)
|
|
72
|
|
|
9,258
|
|
|
|
|
1,688,224
|
|
|
19.5
|
%
|
|
$
|
182,353
|
|
|
102,087
|
|
|
37.0
|
%
|
|
24,882
|
|
|
14.8
|
%
|
|||
Subtotal senior living communities
|
|
305
|
|
|
34,205
|
|
|
|
|
4,660,283
|
|
|
53.9
|
%
|
|
$
|
136,246
|
|
|
170,062
|
|
|
61.6
|
%
|
|
92,857
|
|
|
55.4
|
%
|
|||
MOBs
(5)
|
|
129
|
|
|
12,602,012
|
|
|
sq. ft.
|
|
3,801,658
|
|
|
44.0
|
%
|
|
$
|
302
|
|
|
101,151
|
|
|
36.7
|
%
|
|
70,213
|
|
|
41.9
|
%
|
|||
Wellness centers
|
|
10
|
|
|
812,000
|
|
|
sq. ft.
|
|
178,110
|
|
|
2.1
|
%
|
|
$
|
219
|
|
|
4,602
|
|
|
1.7
|
%
|
|
4,602
|
|
|
2.7
|
%
|
|||
Total
|
|
444
|
|
|
|
|
|
|
$
|
8,640,051
|
|
|
100.0
|
%
|
|
|
|
$
|
275,815
|
|
|
100.0
|
%
|
|
$
|
167,672
|
|
|
100.0
|
%
|
|
|
Rent Coverage
|
|
Occupancy
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Five Star
|
|
1.15
|
x
|
|
1.19
|
x
|
|
82.1
|
%
|
|
83.6
|
%
|
Brookdale
|
|
2.30
|
x
|
|
2.59
|
x
|
|
84.0
|
%
|
|
84.5
|
%
|
11 private senior living companies (combined)
|
|
1.21
|
x
|
|
1.28
|
x
|
|
86.6
|
%
|
|
89.3
|
%
|
Subtotal triple net leased senior living communities
|
|
1.20
|
x
|
|
1.26
|
x
|
|
82.8
|
%
|
|
84.5
|
%
|
Managed senior living communities
(7)
|
|
NA
|
|
|
NA
|
|
|
85.8
|
%
|
|
87.2
|
%
|
Subtotal senior living communities
|
|
1.2
|
x
|
|
1.26
|
x
|
|
83.6
|
%
|
|
85.2
|
%
|
MOBs
(5)
|
|
NA
|
|
|
NA
|
|
|
95.1
|
%
|
|
96.4
|
%
|
Wellness centers
|
|
1.78
|
x
|
|
1.91
|
x
|
|
100.0
|
%
|
|
100.0
|
%
|
Total
|
|
1.23
|
x
|
|
1.30
|
x
|
|
|
|
|
|
(1)
|
Represents the gross book value of real estate assets before depreciation and purchase price allocations, less impairment write downs, if any. Amounts exclude the investment carrying value of two of our senior living communities that were classified as held for sale as of
March 31, 2018
and are included in other assets in our condensed consolidated balance sheets.
|
(2)
|
Represents carrying value of investment divided by number of living units or rentable square feet, as applicable, at
March 31, 2018
.
|
(3)
|
NOI is defined and calculated by reportable segment. Our definition of NOI and our reconciliation of net income to consolidated NOI are included below under the heading “Non-GAAP Financial Measures”.
|
(4)
|
Senior living communities are categorized by the type of living units which constitute a majority of the living units at the community.
|
(5)
|
These
129
MOB properties are comprised of 155 buildings. Our MOB leases include some triple net leases where, in addition to paying fixed rents, the tenants assume the obligation to operate and maintain the properties at their expense, and some net and modified gross leases where we are responsible for the operation and maintenance of the properties, and we charge tenants for some or all of the property operating costs. A small percentage of our MOB leases are "full-service" leases where we receive fixed rent from our tenants and no reimbursement for our property operating costs.
|
(6)
|
Marriott International, Inc., or Marriott, guarantees the lessee’s obligations under this lease. In March 2018, we sold two senior living communities leased to a subsidiary of Sunrise and we currently have one senior living community leased to Sunrise that is under agreement to sell. We expect the closing of this sale to occur before the end of the second quarter of 2018. The net carrying value of this community was $15.7 million as of
March 31, 2018
.
|
(7)
|
These senior living communities are managed by Five Star. The occupancy for the 12 month period ended, or, if shorter, from the date of acquisitions through,
March 31, 2018
was 86.2%.
|
(8)
|
Operating data for MOBs are presented as of
March 31, 2018
and
2017
and include (i) space being fitted out for occupancy and (ii) space which is leased but is not occupied or is being offered for sublease by tenants; operating data for other properties, tenants and managers are presented based upon the operating results provided by our tenants and managers for the 12 months ended December 31, 2017 and 2016, or the most recent prior period for which tenant operating results are made available to us. Rent coverage is calculated as operating cash flows from our tenants’ facility operations of our properties, before subordinated charges, if any, divided by rents payable to us. We have not independently verified tenant operating data. Excludes data for periods prior to our ownership of certain properties, as well as data for properties sold or classified as held for sale during the periods presented.
|
|
|
Annualized Rental Income
(1)(2)
|
|
Percent of
Total
Annualized
Rental
Income
Expiring
|
|
Cumulative
Percentage of
Annualized
Rental
Income
Expiring
|
||||||||||||||||
Year
|
|
Triple Net
Senior Living Communities |
|
MOBs
|
|
Wellness Centers
|
|
Total
|
|
|
||||||||||||
2018
|
|
$
|
1,828
|
|
(3)
|
$
|
17,274
|
|
|
$
|
—
|
|
|
$
|
19,102
|
|
|
2.8
|
%
|
|
2.8
|
%
|
2019
|
|
721
|
|
|
44,753
|
|
|
—
|
|
|
45,474
|
|
|
6.6
|
%
|
|
9.4
|
%
|
||||
2020
|
|
—
|
|
|
34,930
|
|
|
—
|
|
|
34,930
|
|
|
5.1
|
%
|
|
14.5
|
%
|
||||
2021
|
|
1,492
|
|
|
25,315
|
|
|
—
|
|
|
26,807
|
|
|
3.9
|
%
|
|
18.4
|
%
|
||||
2022
|
|
—
|
|
|
31,225
|
|
|
—
|
|
|
31,225
|
|
|
4.5
|
%
|
|
22.9
|
%
|
||||
2023
|
|
18,366
|
|
(4)
|
21,318
|
|
|
7,546
|
|
|
47,230
|
|
|
6.9
|
%
|
|
29.8
|
%
|
||||
2024
|
|
64,911
|
|
(5)
|
43,536
|
|
|
|
|
108,447
|
|
|
15.8
|
%
|
|
45.6
|
%
|
|||||
2025
|
|
—
|
|
|
16,470
|
|
|
—
|
|
|
16,470
|
|
|
2.4
|
%
|
|
48.0
|
%
|
||||
2026
|
|
68,552
|
|
|
19,886
|
|
|
—
|
|
|
88,438
|
|
|
12.9
|
%
|
|
60.9
|
%
|
||||
2027 and thereafter
|
|
113,964
|
|
|
144,050
|
|
|
10,550
|
|
|
268,564
|
|
|
39.1
|
%
|
|
100.0
|
%
|
||||
Total
|
|
$
|
269,834
|
|
|
$
|
398,757
|
|
|
$
|
18,096
|
|
|
$
|
686,687
|
|
|
100.0
|
%
|
|
|
(1)
|
Annualized rental income is based on rents pursuant to existing leases as of
March 31, 2018
, including estimated percentage rents, straight line rent adjustments, estimated recurring expense reimbursements for certain net and modified gross leases and excluding lease value amortization at certain of our MOBs and wellness centers. Rental income amounts also include 100% of rental income as reported under GAAP from a property owned by a joint venture in which we own a 55% equity interest.
|
(2)
|
Excludes rent received from our managed senior living communities leased to our TRSs. If the NOI from our TRSs (three months ended
March 31, 2018
, annualized) were included in the foregoing table, the percent of total annualized rental income expiring in each of the following years would be:
2018
—
2.4%
;
2019
—
5.8%
;
2020
—
4.4%
;
2021
—
3.4%
;
2022
—
4.0%
;
2023
—
6.0%
;
2024
—
13.8%
;
2025
—
2.1%
;
2026
—
11.2%
; and thereafter —
46.9%
. In addition, if our leases to our TRSs using the terms of the management agreements for these communities were included in the foregoing table, the average remaining lease term for all properties (weighted by annualized rental income) would be
8.6
years.
|
(3)
|
Includes one community leased to Pacifica where the tenant has defaulted on the lease effective February 2018 and one community leased to a private senior living company where the tenant has provided notice of its exercise of its purchase option. The closing of this sale is expected to occur before the end of 2018. The annualized rental income associated with the community with the tenant purchase option is $1,305.
|
(4)
|
Includes one senior living community leased to Sunrise that we have agreed and expect to sell before the end of the second quarter of 2018.
|
(5)
|
Includes one SNF leased to Five Star that we have agreed and expect to sell before the end of 2018.
|
|
|
Number of Tenants
(1)
|
|
Percent of Total Number of Tenancies Expiring
(1)
|
|
Cumulative Percentage of Number of Tenancies Expiring
(1)
|
||||||||||||
Year
|
|
Triple Net
Senior Living Communities |
|
MOBs
|
|
Wellness Centers
|
|
Total
|
|
|
||||||||
2018
|
|
2
|
|
(2)
|
105
|
|
|
—
|
|
|
107
|
|
|
15.1
|
%
|
|
15.1
|
%
|
2019
|
|
1
|
|
|
100
|
|
|
—
|
|
|
101
|
|
|
14.2
|
%
|
|
29.3
|
%
|
2020
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|
14.2
|
%
|
|
43.5
|
%
|
2021
|
|
1
|
|
|
88
|
|
|
—
|
|
|
89
|
|
|
12.6
|
%
|
|
56.1
|
%
|
2022
|
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
|
12.8
|
%
|
|
68.9
|
%
|
2023
|
|
5
|
|
(3)
|
44
|
|
|
3
|
|
|
52
|
|
|
7.3
|
%
|
|
76.2
|
%
|
2024
|
|
3
|
|
(4)
|
42
|
|
|
—
|
|
|
45
|
|
|
6.3
|
%
|
|
82.5
|
%
|
2025
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|
4.5
|
%
|
|
87.0
|
%
|
2026
|
|
1
|
|
|
25
|
|
|
—
|
|
|
26
|
|
|
3.7
|
%
|
|
90.7
|
%
|
2027 and thereafter
|
|
12
|
|
|
52
|
|
|
1
|
|
|
65
|
|
|
9.3
|
%
|
|
100.0
|
%
|
Total
|
|
25
|
|
|
680
|
|
|
4
|
|
|
709
|
|
|
100.0
|
%
|
|
|
(1)
|
Excludes our managed senior living communities leased to our TRSs.
|
(2)
|
Includes one community leased to Pacifica where the tenant has defaulted on the lease effective February 2018 and one community leased to a private senior living company where the tenant has provided notice of its exercise of its purchase option. The closing of this sale is expected to occur before the end of 2018.
|
(3)
|
Includes one senior living community leased to Sunrise that we have agreed and expect to sell before the end of the second quarter of 2018.
|
(4)
|
Includes one SNF leased to Five Star that we have agreed and expect to sell before the end of 2018.
|
|
|
Living Units
(1)
|
|
Square Feet
(2)
|
||||||||||||||||||||
Year
|
|
Triple Net
Senior Living Communities |
|
Percent of Total Living Units Expiring
|
|
Cumulative Percentage of Total Living Units Expiring
|
|
MOBs (Square Feet)
|
|
Wellness Centers (Square Feet)
|
|
Total Square Feet
|
|
Percent of Total Square Feet Expiring
|
|
Cumulative Percent of Total Square Feet Expiring
|
||||||||
2018
|
|
177
|
|
(3)
|
0.7
|
%
|
|
0.7
|
%
|
|
590,191
|
|
|
—
|
|
|
590,191
|
|
|
4.6
|
%
|
|
4.6
|
%
|
2019
|
|
175
|
|
|
0.7
|
%
|
|
1.4
|
%
|
|
1,407,763
|
|
|
—
|
|
|
1,407,763
|
|
|
11.0
|
%
|
|
15.6
|
%
|
2020
|
|
—
|
|
|
—
|
%
|
|
1.4
|
%
|
|
1,458,379
|
|
|
—
|
|
|
1,458,379
|
|
|
11.4
|
%
|
|
27.0
|
%
|
2021
|
|
361
|
|
|
1.4
|
%
|
|
2.8
|
%
|
|
781,477
|
|
|
—
|
|
|
781,477
|
|
|
6.1
|
%
|
|
33.1
|
%
|
2022
|
|
—
|
|
|
—
|
%
|
|
2.8
|
%
|
|
1,159,325
|
|
|
—
|
|
|
1,159,325
|
|
|
9.1
|
%
|
|
42.2
|
%
|
2023
|
|
1,051
|
|
(4)
|
4.2
|
%
|
|
7.0
|
%
|
|
1,076,213
|
|
|
354,000
|
|
|
1,430,213
|
|
|
11.2
|
%
|
|
53.4
|
%
|
2024
|
|
6,277
|
|
(5)
|
25.2
|
%
|
|
32.2
|
%
|
|
1,679,136
|
|
|
—
|
|
|
1,679,136
|
|
|
13.1
|
%
|
|
66.5
|
%
|
2025
|
|
—
|
|
|
—
|
%
|
|
32.2
|
%
|
|
647,474
|
|
|
—
|
|
|
647,474
|
|
|
5.1
|
%
|
|
71.6
|
%
|
2026
|
|
6,857
|
|
|
27.5
|
%
|
|
59.7
|
%
|
|
658,539
|
|
|
—
|
|
|
658,539
|
|
|
5.1
|
%
|
|
76.7
|
%
|
2027 and thereafter
|
|
10,049
|
|
|
40.3
|
%
|
|
100.0
|
%
|
|
2,530,134
|
|
|
458,000
|
|
|
2,988,134
|
|
|
23.3
|
%
|
|
100.0
|
%
|
Total
|
|
24,947
|
|
|
100.0
|
%
|
|
|
|
11,988,631
|
|
|
812,000
|
|
|
12,800,631
|
|
|
100.0
|
%
|
|
|
(1)
|
Excludes
9,258
living units from our managed senior living communities leased to our TRSs. If the number of living units included in our TRS leases using the terms of the management agreements for these communities were included in the foregoing table, the percent of total living units expiring in each of the following years would be:
2018
—
0.5%
;
2019
—
0.5%
;
2020
—
0.0%
;
2021
—
1.1%
;
2022
—
0.0%
;
2023
—
3.1%
;
2024
—
18.4%
;
2025
—
0.0%
;
2026
—
20.0%
; and thereafter —
56.4%
.
|
(2)
|
Includes 100% of square feet from a property owned by a joint venture in which we own a 55% equity interest.
|
(3)
|
Includes one community leased to Pacifica with 78 living units where the tenant has defaulted on the lease effective February 2018 and one community leased to a private senior living company with 99 living units where the tenant has provided notice of its exercise of its purchase option. The closing of this sale is expected to occur before the end of 2018.
|
(4)
|
Includes one senior living community leased to Sunrise with 354 living units that we have agreed and expect to sell before the end of the second quarter of 2018.
|
(5)
|
Includes one SNF leased to Five Star with 98 living units that we have agreed and expect to sell before the end of 2018.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
|
||||
Triple net leased senior living communities
|
|
$
|
67,975
|
|
|
$
|
67,252
|
|
Managed senior living communities
|
|
102,087
|
|
|
98,118
|
|
||
MOBs
|
|
101,151
|
|
|
94,646
|
|
||
All other operations
|
|
4,602
|
|
|
4,545
|
|
||
Total revenues
|
|
$
|
275,815
|
|
|
$
|
264,561
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common shareholders:
|
|
|
|
|
||||
Triple net leased senior living communities
|
|
$
|
228,363
|
|
|
$
|
41,579
|
|
Managed senior living communities
|
|
8,614
|
|
|
2,847
|
|
||
MOBs
|
|
28,536
|
|
|
29,344
|
|
||
All other operations
|
|
(29,491
|
)
|
|
(41,615
|
)
|
||
Net income attributable to common shareholders
|
|
$
|
236,022
|
|
|
$
|
32,155
|
|
|
|
All Properties
|
|
Comparable Properties
(1)
|
||||||||
|
|
As of and For the Three Months
|
|
As of and For the Three Months
|
||||||||
|
|
Ended March 31,
|
|
Ended March 31,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Total properties
|
|
233
|
|
|
236
|
|
|
233
|
|
|
233
|
|
# of units
|
|
24,947
|
|
|
26,220
|
|
|
24,947
|
|
|
24,947
|
|
Tenant operating data
(2)
|
|
|
|
|
|
|
|
|
||||
Occupancy
|
|
82.8
|
%
|
|
84.5
|
%
|
|
82.8
|
%
|
|
84.5
|
%
|
Rent coverage
|
|
1.20
|
x
|
|
1.26
|
x
|
|
1.20
|
x
|
|
1.26
|
x
|
(1)
|
Consists of triple net leased senior living communities we have owned continuously since January 1, 2017; excludes communities classified as held for sale, if any.
|
(2)
|
All tenant operating data presented are based upon the operating results provided by our tenants for the 12 months ended December 31, 2017 and 2016 or the most recent prior period for which tenant operating results are available to us. Rent coverage is calculated as operating cash flows from our triple net lease tenants’ operations of our properties, before subordinated charges, if any, divided by triple net lease minimum rents payable to us. We have not independently verified tenant operating data. Excludes data for historical periods prior to our ownership of certain properties, as well as data for properties sold or classified as held for sale during the periods presented.
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Rental Income
|
|
$
|
67,975
|
|
|
$
|
67,252
|
|
|
$
|
723
|
|
|
1.1
|
%
|
Net operating income (NOI)
|
|
67,975
|
|
|
67,252
|
|
|
723
|
|
|
1.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
|
(20,195
|
)
|
|
(20,334
|
)
|
|
(139
|
)
|
|
(0.7
|
)%
|
|||
Operating income
|
|
47,780
|
|
|
46,918
|
|
|
862
|
|
|
1.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(571
|
)
|
|
(5,339
|
)
|
|
(4,768
|
)
|
|
(89.3
|
)%
|
|||
Gain on sale of properties
|
|
181,154
|
|
|
—
|
|
|
181,154
|
|
|
100.0
|
%
|
|||
Net income
|
|
$
|
228,363
|
|
|
$
|
41,579
|
|
|
$
|
186,784
|
|
|
449.2
|
%
|
|
|
All Properties
|
|
Comparable Properties
(1)
|
||||||||||||
|
|
As of and For the Three Months
|
|
As of and For the Three Months
|
||||||||||||
|
|
Ended March 31,
|
|
Ended March 31,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total properties
|
|
72
|
|
|
68
|
|
|
68
|
|
|
68
|
|
||||
# of units
|
|
9,258
|
|
|
8,798
|
|
|
8,814
|
|
|
8,814
|
|
||||
Occupancy
|
|
85.8
|
%
|
|
86.0
|
%
|
|
85.8
|
%
|
|
86.0
|
%
|
||||
Average monthly rate
(2)
|
|
$
|
4,308
|
|
|
$
|
4,322
|
|
|
$
|
4,336
|
|
|
$
|
4,322
|
|
(1)
|
Consists of managed senior living communities owned and managed by the same operator continuously since January 1, 2017; excludes communities classified as held for sale, if any.
|
(2)
|
Average monthly rate is calculated by taking the average daily rate, which is defined as total residents fees and services divided by occupied units during the period, and multiplying it by 30 days.
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Residents fees and services
|
|
$
|
102,087
|
|
|
$
|
98,118
|
|
|
$
|
3,969
|
|
|
4.0
|
%
|
Property operating expenses
|
|
(77,205
|
)
|
|
(73,880
|
)
|
|
3,325
|
|
|
4.5
|
%
|
|||
Net operating income (NOI)
|
|
24,882
|
|
|
24,238
|
|
|
644
|
|
|
2.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
|
(14,811
|
)
|
|
(20,215
|
)
|
|
(5,404
|
)
|
|
(26.7
|
)%
|
|||
Operating income
|
|
10,071
|
|
|
4,023
|
|
|
6,048
|
|
|
150.3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(1,327
|
)
|
|
(1,176
|
)
|
|
151
|
|
|
12.8
|
%
|
|||
Loss on early extinguishment of debt
|
|
(130
|
)
|
|
—
|
|
|
130
|
|
|
100.0
|
%
|
|||
Net income
|
|
$
|
8,614
|
|
|
$
|
2,847
|
|
|
$
|
5,767
|
|
|
202.6
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Residents fees and services
|
|
$
|
98,407
|
|
|
$
|
98,118
|
|
|
$
|
289
|
|
|
0.3
|
%
|
Property operating expenses
|
|
(74,550
|
)
|
|
(73,885
|
)
|
|
665
|
|
|
0.9
|
%
|
|||
Net operating income (NOI)
|
|
23,857
|
|
|
24,233
|
|
|
(376
|
)
|
|
(1.6
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
|
(12,782
|
)
|
|
(20,212
|
)
|
|
(7,430
|
)
|
|
(36.8
|
)%
|
|||
Operating income
|
|
11,075
|
|
|
4,021
|
|
|
7,054
|
|
|
175.4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(1,179
|
)
|
|
(1,176
|
)
|
|
3
|
|
|
0.3
|
%
|
|||
Loss on early extinguishment of debt
|
|
(130
|
)
|
|
—
|
|
|
130
|
|
|
100.0
|
%
|
|||
Net income
|
|
$
|
9,766
|
|
|
$
|
2,845
|
|
|
$
|
6,921
|
|
|
243.3
|
%
|
|
|
All Properties
|
|
Comparable Properties
(1)
|
||||||||
|
|
As of and For the Three Months
|
|
As of and For the Three Months
|
||||||||
|
|
Ended March 31,
|
|
Ended March 31,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Total properties
|
|
129
|
|
|
120
|
|
|
119
|
|
|
119
|
|
Total buildings
|
|
155
|
|
|
146
|
|
|
145
|
|
|
145
|
|
Total square feet
(2)
|
|
12,602
|
|
|
11,552
|
|
|
11,436
|
|
|
11,435
|
|
Occupancy
(3)
|
|
95.1
|
%
|
|
96.4
|
%
|
|
94.9
|
%
|
|
96.3
|
%
|
(1)
|
Consists of MOBs we have owned continuously since January 1, 2017; includes our MOB (two buildings) that is owned in a joint venture arrangement; excludes properties classified as held for sale, if any.
|
(2)
|
Prior periods exclude space re-measurements made subsequent to those periods.
|
(3)
|
MOB occupancy includes (i) space being fitted out for occupancy and (ii) space which is leased but is not occupied or is being offered for sublease by tenants.
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Rental income
|
|
$
|
101,151
|
|
|
$
|
94,646
|
|
|
$
|
6,505
|
|
|
6.9
|
%
|
Property operating expenses
|
|
(30,938
|
)
|
|
(27,177
|
)
|
|
3,761
|
|
|
13.8
|
%
|
|||
Net operating income (NOI)
|
|
70,213
|
|
|
67,469
|
|
|
2,744
|
|
|
4.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
|
(34,385
|
)
|
|
(31,678
|
)
|
|
2,707
|
|
|
8.5
|
%
|
|||
Operating income
|
|
35,828
|
|
|
35,791
|
|
|
37
|
|
|
0.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(5,909
|
)
|
|
(6,321
|
)
|
|
(412
|
)
|
|
(6.5
|
)%
|
|||
Net income
|
|
29,919
|
|
|
29,470
|
|
|
449
|
|
|
1.5
|
%
|
|||
Net income attributable to noncontrolling interest
|
|
(1,383
|
)
|
|
(126
|
)
|
|
1,257
|
|
|
997.6
|
%
|
|||
Net income attributable to common shareholders
|
|
$
|
28,536
|
|
|
$
|
29,344
|
|
|
$
|
(808
|
)
|
|
(2.8
|
)%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Rental income
|
|
$
|
94,263
|
|
|
$
|
94,168
|
|
|
$
|
95
|
|
|
0.1
|
%
|
Property operating expenses
|
|
(28,676
|
)
|
|
(26,965
|
)
|
|
1,711
|
|
|
6.3
|
%
|
|||
Net operating income (NOI)
|
|
65,587
|
|
|
67,203
|
|
|
(1,616
|
)
|
|
(2.4
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
|
(31,327
|
)
|
|
(31,502
|
)
|
|
(175
|
)
|
|
(0.6
|
)%
|
|||
Operating income
|
|
34,260
|
|
|
35,701
|
|
|
(1,441
|
)
|
|
(4.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(5,907
|
)
|
|
(6,321
|
)
|
|
(414
|
)
|
|
(6.5
|
)%
|
|||
Net income
|
|
28,353
|
|
|
29,380
|
|
|
(1,027
|
)
|
|
(3.5
|
)%
|
|||
Net income attributable to noncontrolling interest
|
|
(1,383
|
)
|
|
(126
|
)
|
|
1,257
|
|
|
997.6
|
%
|
|||
Net income attributable to common shareholders
|
|
$
|
26,970
|
|
|
$
|
29,254
|
|
|
$
|
(2,284
|
)
|
|
(7.8
|
)%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Rental income
|
|
$
|
4,602
|
|
|
$
|
4,545
|
|
|
$
|
57
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
|
(948
|
)
|
|
(948
|
)
|
|
—
|
|
|
—
|
%
|
|||
General and administrative
|
|
(25,118
|
)
|
|
(15,083
|
)
|
|
10,035
|
|
|
66.5
|
%
|
|||
Acquisition and certain other transaction related costs
|
|
(20
|
)
|
|
(292
|
)
|
|
(272
|
)
|
|
(93.2
|
)%
|
|||
Total expenses
|
|
(26,086
|
)
|
|
(16,323
|
)
|
|
9,763
|
|
|
59.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Operating loss
|
|
(21,484
|
)
|
|
(11,778
|
)
|
|
9,706
|
|
|
82.4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Dividend income
|
|
659
|
|
|
659
|
|
|
—
|
|
|
—
|
%
|
|||
Unrealized gains and losses on equity securities, net
|
|
27,241
|
|
|
—
|
|
|
27,241
|
|
|
100.0
|
%
|
|||
Interest and other income
|
|
54
|
|
|
120
|
|
|
(66
|
)
|
|
(55.0
|
)%
|
|||
Interest expense
|
|
(35,745
|
)
|
|
(30,652
|
)
|
|
5,093
|
|
|
16.6
|
%
|
|||
Net income
|
|
(29,275
|
)
|
|
(41,651
|
)
|
|
(12,376
|
)
|
|
(29.7
|
)%
|
|||
Income tax expense
|
|
(260
|
)
|
|
(92
|
)
|
|
168
|
|
|
182.6
|
%
|
|||
Equity in earnings of an investee
|
|
44
|
|
|
128
|
|
|
(84
|
)
|
|
(65.6
|
)%
|
|||
Net loss
|
|
$
|
(29,491
|
)
|
|
$
|
(41,615
|
)
|
|
$
|
(12,124
|
)
|
|
(29.1
|
)%
|
(1)
|
All other operations includes all of our other operations, including certain properties that offer wellness, fitness and spa services to members, which segment we do not consider to be sufficiently material to constitute a separate reporting segment, and any operating expenses that are not attributable to a specific reporting segment.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Net income attributable to common shareholders
|
|
$
|
236,022
|
|
|
$
|
32,155
|
|
Depreciation and amortization expense
|
|
70,339
|
|
|
73,175
|
|
||
FFO allocated to noncontrolling interest
|
|
(5,300
|
)
|
|
(456
|
)
|
||
Gain on sale of properties
|
|
(181,154
|
)
|
|
—
|
|
||
FFO
|
|
119,907
|
|
|
104,874
|
|
||
|
|
|
|
|
||||
Estimated business management incentive fees
(1)
|
|
14,347
|
|
|
3,266
|
|
||
Acquisition and certain other transaction related costs
|
|
20
|
|
|
292
|
|
||
Loss on early extinguishment of debt
|
|
130
|
|
|
—
|
|
||
Unrealized gains and losses on equity securities, net
|
|
(27,241
|
)
|
|
—
|
|
||
Normalized FFO
|
|
$
|
107,163
|
|
|
$
|
108,432
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding (basic)
|
|
237,478
|
|
|
237,391
|
|
||
Weighted average common shares outstanding (diluted)
|
|
237,493
|
|
|
237,416
|
|
||
|
|
|
|
|
||||
Per common share data (basic and diluted):
|
|
|
|
|
||||
Net income attributable to common shareholders
|
|
$
|
0.99
|
|
|
$
|
0.14
|
|
FFO
|
|
$
|
0.50
|
|
|
$
|
0.44
|
|
Normalized FFO
|
|
$
|
0.45
|
|
|
$
|
0.46
|
|
Distributions declared per common share
|
|
$
|
0.39
|
|
|
$
|
0.39
|
|
(1)
|
Incentive fees under our business management agreement are payable after the end of each calendar year, are calculated based on common share total return, as defined, and are included in general and administrative expense in our condensed consolidated statements of comprehensive income. In calculating net income attributable to common shareholders in accordance with GAAP, we recognize estimated business management incentive fee expense, if any, in the first, second and third quarters. Although we recognize this expense, if any, in the first, second and third quarters for purposes of calculating net income attributable to common shareholders, we do not include these amounts in the calculation of Normalized FFO until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Reconciliation of Net Income to NOI:
|
|
|
|
|
|
|
||
Net income
|
|
$
|
237,405
|
|
|
$
|
32,281
|
|
Gain on sale of properties
|
|
(181,154
|
)
|
|
—
|
|
||
Income before gain on sale of properties
|
|
56,251
|
|
|
32,281
|
|
||
|
|
|
|
|
||||
Equity in earnings of an investee
|
|
(44
|
)
|
|
(128
|
)
|
||
Income tax expense
|
|
260
|
|
|
92
|
|
||
Income from continuing operations before income tax expense and equity in earnings of an investee
|
|
56,467
|
|
|
32,245
|
|
||
Loss on early extinguishment of debt
|
|
130
|
|
|
—
|
|
||
Interest expense
|
|
43,552
|
|
|
43,488
|
|
||
Interest and other income
|
|
(54
|
)
|
|
(120
|
)
|
||
Unrealized gains and losses on equity securities, net
|
|
(27,241
|
)
|
|
—
|
|
||
Dividend income
|
|
(659
|
)
|
|
(659
|
)
|
||
Operating income
|
|
72,195
|
|
|
74,954
|
|
||
|
|
|
|
|
||||
Acquisition and certain other transaction related costs
|
|
20
|
|
|
292
|
|
||
General and administrative expense
|
|
25,118
|
|
|
15,083
|
|
||
Depreciation and amortization expense
|
|
70,339
|
|
|
73,175
|
|
||
Total NOI
|
|
$
|
167,672
|
|
|
$
|
163,504
|
|
|
|
|
|
|
||||
Triple net leased communities NOI
|
|
$
|
67,975
|
|
|
$
|
67,252
|
|
Managed communities NOI
|
|
24,882
|
|
|
24,238
|
|
||
MOB NOI
|
|
70,213
|
|
|
67,469
|
|
||
All other operations NOI
|
|
4,602
|
|
|
4,545
|
|
||
Total NOI
|
|
$
|
167,672
|
|
|
$
|
163,504
|
|
|
|
|
|
|
•
|
our ability to maintain or increase the occupancy of, and the rental rates at, our properties;
|
•
|
our ability to control operating expenses and capital expenses at our properties;
|
•
|
our manager's ability to operate our managed senior living communities so as to maintain or increase our returns; and
|
•
|
our ability to purchase additional properties which produce cash flows in excess of our cost of acquisition capital and the related property operating expenses.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
MOB tenant improvements
(1)
|
$
|
1,600
|
|
|
$
|
2,265
|
|
MOB leasing costs
(2)
|
422
|
|
|
1,090
|
|
||
MOB building improvements
(3)
|
2,556
|
|
|
1,583
|
|
||
Managed senior living communities capital improvements
|
2,407
|
|
|
3,786
|
|
||
Development, redevelopment and other activities
(4)
|
3,221
|
|
|
9,492
|
|
||
Total capital expenditures
|
$
|
10,206
|
|
|
$
|
18,216
|
|
(1)
|
MOB tenant improvements generally include capital expenditures to improve tenants’ space or amounts paid directly to tenants to improve their space.
|
(2)
|
MOB leasing costs generally include leasing related costs, such as brokerage commissions and tenant inducements.
|
(3)
|
MOB building improvements generally include capital expenditures to replace obsolete building components and capital expenditures that extend the useful life of existing assets.
|
(4)
|
Development, redevelopment and other activities generally include (i) capital expenditures that are identified at the time of acquisition of a property and incurred within a short period thereafter and (ii) capital expenditure projects that reposition a property or result in new sources of revenues.
|
|
|
New Leases
|
|
Renewals
|
|
Total
|
||||||
Square feet leased during the quarter
|
|
27
|
|
|
69
|
|
|
96
|
|
|||
Total leasing costs and concession commitments
(1)
|
|
$
|
1,030
|
|
|
$
|
677
|
|
|
$
|
1,707
|
|
Total leasing costs and concession commitments per square foot
(1)
|
|
$
|
37.49
|
|
|
$
|
9.80
|
|
|
$
|
17.68
|
|
Weighted average lease term (years)
(2)
|
|
4.9
|
|
|
5.1
|
|
|
5.1
|
|
|||
Total leasing costs and concession commitments per square foot per year
(1)
|
|
$
|
7.59
|
|
|
$
|
1.93
|
|
|
$
|
3.49
|
|
(1)
|
Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.
|
(2)
|
Weighted based on annualized rental income pursuant to existing leases as of
March 31, 2018
, including straight line rent adjustments and estimated recurring expense reimbursements, and excluding lease value amortization.
|
|
|
|
|
Annual
|
|
Annual
|
|
|
|
|
|||||
|
|
Principal
|
|
Interest
|
|
Interest
|
|
|
|
Interest
|
|||||
Debt
|
|
Balance
(1)
|
|
Rate
(1)
|
|
Expense
|
|
Maturity
|
|
Payments Due
|
|||||
Senior unsecured notes
|
|
$
|
500,000
|
|
|
4.75
|
%
|
|
$
|
23,750
|
|
|
2028
|
|
Semi-Annually
|
Senior unsecured notes
|
|
400,000
|
|
|
3.25
|
%
|
|
13,000
|
|
|
2019
|
|
Semi-Annually
|
||
Senior unsecured notes
|
|
350,000
|
|
|
5.63
|
%
|
|
19,705
|
|
|
2042
|
|
Quarterly
|
||
Senior unsecured notes
|
|
300,000
|
|
|
6.75
|
%
|
|
20,250
|
|
|
2021
|
|
Semi-Annually
|
||
Senior unsecured notes
|
|
250,000
|
|
|
4.75
|
%
|
|
11,875
|
|
|
2024
|
|
Semi-Annually
|
||
Senior unsecured notes
|
|
250,000
|
|
|
6.25
|
%
|
|
15,625
|
|
|
2046
|
|
Quarterly
|
||
Senior unsecured notes
|
|
200,000
|
|
|
6.75
|
%
|
|
13,500
|
|
|
2020
|
|
Semi-Annually
|
||
Mortgage notes
|
|
12,493
|
|
|
6.31
|
%
|
|
788
|
|
|
2018
|
|
Monthly
|
||
Mortgage notes
|
|
11,803
|
|
|
6.24
|
%
|
|
737
|
|
|
2018
|
|
Monthly
|
||
Mortgage notes
|
|
67,182
|
|
|
4.47
|
%
|
|
3,003
|
|
|
2018
|
|
Monthly
|
||
Mortgage note
|
|
6,394
|
|
|
4.69
|
%
|
|
300
|
|
|
2019
|
|
Monthly
|
||
Mortgage notes
|
|
43,320
|
|
|
3.79
|
%
|
|
1,642
|
|
|
2019
|
|
Monthly
|
||
Mortgage note
|
|
2,465
|
|
|
7.49
|
%
|
|
185
|
|
|
2022
|
|
Monthly
|
||
Mortgage note
|
|
13,596
|
|
|
6.28
|
%
|
|
854
|
|
|
2022
|
|
Monthly
|
||
Mortgage note
|
|
11,340
|
|
|
4.85
|
%
|
|
550
|
|
|
2022
|
|
Monthly
|
||
Mortgage note
|
|
16,711
|
|
|
6.64
|
%
|
|
1,110
|
|
|
2023
|
|
Monthly
|
||
Mortgage notes
(2)
|
|
620,000
|
|
|
3.53
|
%
|
|
21,886
|
|
|
2026
|
|
Monthly
|
||
Mortgage note
|
|
2,118
|
|
|
6.25
|
%
|
|
132
|
|
|
2033
|
|
Monthly
|
||
Mortgage note
|
|
11,035
|
|
|
4.44
|
%
|
|
490
|
|
|
2043
|
|
Monthly
|
||
|
|
$
|
3,068,457
|
|
|
|
|
$
|
149,382
|
|
|
|
|
|
(1)
|
The principal balances and interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we assumed these debts. This table does not include obligations under capital leases.
|
(2)
|
The property encumbered by these mortgages is subject to a joint venture in which we own a 55% equity interest.
|
|
|
Impact of Changes in Interest Rates
|
|||||||||||||
|
|
|
|
Outstanding
|
|
Total Interest
|
|
Annual Earnings
|
|||||||
|
|
Interest Rate
(1)
|
|
Floating Rate Debt
|
|
Expense Per Year
|
|
Per Share Impact
(2)
|
|||||||
At March 31, 2018
|
|
3.11
|
%
|
|
$
|
605,000
|
|
|
$
|
18,816
|
|
|
$
|
0.08
|
|
One percentage point increase
|
|
4.11
|
%
|
|
$
|
605,000
|
|
|
$
|
24,866
|
|
|
$
|
0.10
|
|
(1)
|
Weighted based on the respective interest rates and outstanding borrowings under our credit facility and term loans as of
March 31, 2018
.
|
(2)
|
Based on weighted average number of shares outstanding (diluted) for the
three
months ended
March 31, 2018
.
|
|
|
Impact of Changes in Interest Rates
|
|||||||||||||
|
|
|
|
Outstanding
|
|
Total Interest
|
|
Annual Earnings
|
|||||||
|
|
Interest Rate
(1)
|
|
Floating Rate Debt
|
|
Expense Per Year
|
|
Per Share Impact
(2)
|
|||||||
At March 31, 2018
|
|
3.00
|
%
|
|
$
|
1,550,000
|
|
|
$
|
46,500
|
|
|
$
|
0.20
|
|
One percentage point increase
|
|
4.00
|
%
|
|
$
|
1,550,000
|
|
|
$
|
62,000
|
|
|
$
|
0.26
|
|
(1)
|
Weighted based on the respective interest rates and outstanding borrowings under our credit facility (assuming fully drawn) and term loans as of
March 31, 2018
.
|
(2)
|
Based on weighted average number of shares outstanding (diluted) for the
three
months ended
March 31, 2018
.
|
•
|
OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,
|
•
|
OUR ABILITY TO RETAIN OUR EXISTING TENANTS, ATTRACT NEW TENANTS AND MAINTAIN OR INCREASE CURRENT RENTAL RATES,
|
•
|
THE CREDIT QUALITIES OF OUR TENANTS,
|
•
|
OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
|
•
|
OUR ACQUISITIONS AND SALES OF PROPERTIES,
|
•
|
THE ABILITY OF THE MANAGER OF OUR MANAGED SENIOR LIVING COMMUNITIES TO MAINTAIN AND INCREASE OCCUPANCY, REVENUES AND OPERATING INCOME AT THOSE COMMUNITIES,
|
•
|
OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO SUSTAIN THE AMOUNT OF SUCH DISTRIBUTIONS,
|
•
|
OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL,
|
•
|
THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
|
•
|
OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
|
•
|
OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,
|
•
|
OUR CREDIT RATINGS,
|
•
|
OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN AND OTHER RELATIONSHIPS WITH RMR INC.,
|
•
|
OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN AND OTHER RELATIONSHIPS WITH AIC AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY AIC,
|
•
|
OUR QUALIFICATION FOR TAXATION AS A REIT,
|
•
|
OUR BELIEF THAT THE AGING U.S. POPULATION AND INCREASING LIFE SPANS OF SENIORS WILL INCREASE THE DEMAND FOR SENIOR LIVING SERVICES, WELLNESS CENTERS AND OTHER MEDICAL AND HEALTHCARE RELATED PROPERTIES,
|
•
|
OUR BELIEF THAT FIVE STAR, OUR FORMER SUBSIDIARY AND LARGEST TENANT AND THE MANAGER OF OUR MANAGED SENIOR LIVING COMMUNITIES, HAS ADEQUATE FINANCIAL RESOURCES AND LIQUIDITY AND THE ABILITY TO MEET ITS OBLIGATIONS TO US AND TO MANAGE OUR SENIOR LIVING COMMUNITIES SUCCESSFULLY, AND
|
•
|
OTHER MATTERS.
|
•
|
THE IMPACT OF CONDITIONS AND CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS AND MANAGERS,
|
•
|
COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,
|
•
|
LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY FOR TAXATION AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES,
|
•
|
COMPETITION WITHIN THE HEALTHCARE AND REAL ESTATE INDUSTRIES,
|
•
|
THE IMPACT OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT, AS AMENDED BY THE HEALTH CARE AND EDUCATION RECONCILIATION ACT, OR COLLECTIVELY, THE ACA, OR THE POSSIBLE FUTURE REPEAL, REPLACEMENT OR MODIFICATION OF THE ACA AND OTHER EXISTING OR PROPOSED LEGISLATION OR REGULATIONS ON US, ON OUR TENANTS AND MANAGERS, AND ON THEIR ABILITY TO PAY OUR RENTS AND RETURNS,
|
•
|
ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, FIVE STAR, RMR LLC, RMR INC., AIC, AND OTHERS AFFILIATED WITH THEM, AND
|
•
|
ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL.
|
•
|
FIVE STAR IS OUR LARGEST TENANT AND THE MANAGER OF OUR MANAGED SENIOR LIVING COMMUNITIES AND IT MAY EXPERIENCE FINANCIAL DIFFICULTIES AS A RESULT OF A NUMBER OF FACTORS, INCLUDING, BUT NOT LIMITED TO:
|
◦
|
CHANGES IN MEDICARE OR MEDICAID POLICIES, INCLUDING THOSE THAT MAY RESULT FROM THE ACA OR THE POSSIBLE FUTURE REPEAL, REPLACEMENT OR MODIFICATION OF THE ACA AND OTHER EXISTING OR PROPOSED LEGISLATION OR REGULATIONS, WHICH COULD RESULT IN REDUCED MEDICARE OR MEDICAID RATES OR A FAILURE OF SUCH RATES TO COVER FIVE STAR’S COSTS OR LIMIT THE SCOPE OR FUNDING OF EITHER OR BOTH PROGRAMS,
|
◦
|
THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON FIVE STAR AND ITS RESIDENTS AND OTHER CUSTOMERS,
|
◦
|
COMPETITION WITHIN THE SENIOR LIVING SERVICES BUSINESS,
|
◦
|
INCREASES IN TORT AND INSURANCE LIABILITY COSTS,
|
◦
|
INCREASES IN COMPLIANCE COSTS, AND
|
◦
|
INCREASES IN FIVE STAR’S LABOR COSTS OR IN COSTS FIVE STAR PAYS FOR GOODS AND SERVICES.
|
•
|
IF FIVE STAR’S OPERATIONS CONTINUE TO BE UNPROFITABLE, IT MAY DEFAULT ON ITS RENT OBLIGATIONS TO US,
|
•
|
IF FIVE STAR FAILS TO PROVIDE QUALITY SERVICES AT SENIOR LIVING COMMUNITIES THAT WE OWN, OUR INCOME FROM THESE COMMUNITIES MAY BE ADVERSELY AFFECTED,
|
•
|
IN RESPONSE TO COMPETITIVE PRESSURES RESULTING FROM RECENT AND EXPECTED NEW SUPPLY OF SENIOR LIVING COMMUNITIES, WE HAVE BEEN INVESTING IN IMPROVEMENTS TO OUR EXISTING SENIOR LIVING COMMUNITIES. OUR COMMUNITIES MAY FAIL TO BE COMPETITIVE AND THEY MAY FAIL TO ATTRACT RESIDENTS, DESPITE OUR CAPITAL INVESTMENTS,
|
•
|
OUR OTHER TENANTS MAY EXPERIENCE LOSSES AND DEFAULT ON THEIR RENT OBLIGATIONS TO US,
|
•
|
SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN OR INCREASE THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,
|
•
|
OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS, THE CAPITAL COSTS WE INCUR TO LEASE AND OPERATE OUR PROPERTIES AND OUR WORKING CAPITAL REQUIREMENTS. WE MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES AND FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED,
|
•
|
OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND ARRANGE FOR THEIR PROFITABLE OPERATION OR LEASE THEM FOR RENTS, LESS THEIR PROPERTY OPERATING EXPENSES, THAT EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING, MANAGEMENT CONTRACTS OR LEASE TERMS FOR NEW PROPERTIES,
|
•
|
RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE BECAUSE OF CHANGING MARKET CONDITIONS OR OTHERWISE,
|
•
|
CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES AND ANY RELATED LEASES OR MANAGEMENT ARRANGEMENTS WE MAY EXPECT TO ENTER INTO MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS OR ARRANGEMENTS MAY CHANGE,
|
•
|
WE EXPECT TO ENTER INTO ADDITIONAL LEASE OR MANAGEMENT ARRANGEMENTS WITH FIVE STAR FOR ADDITIONAL SENIOR LIVING COMMUNITIES THAT WE OWN OR MAY ACQUIRE IN THE FUTURE. HOWEVER, WE CANNOT BE SURE THAT WE WILL ENTER INTO ANY ADDITIONAL LEASES, MANAGEMENT ARRANGEMENTS OR OTHER TRANSACTIONS WITH FIVE STAR,
|
•
|
CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,
|
•
|
ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE DEBT WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH DEBT,
|
•
|
THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOANS MAY BE INCREASED TO UP TO $3.1 BILLION ON A COMBINED BASIS IN CERTAIN CIRCUMSTANCES. HOWEVER, INCREASING THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOANS IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,
|
•
|
WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS; HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET,
|
•
|
THE PREMIUMS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR REVOLVING CREDIT FACILITY AND TERM LOANS AND THE FACILITY FEE PAYABLE ON OUR REVOLVING CREDIT FACILITY
|
•
|
WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,
|
•
|
WE INTEND TO CONDUCT OUR BUSINESS ACTIVITIES IN A MANNER THAT WILL AFFORD US REASONABLE ACCESS TO CAPITAL FOR INVESTMENT AND FINANCING ACTIVITIES. HOWEVER, WE MAY NOT SUCCEED IN THIS REGARD AND WE MAY NOT HAVE REASONABLE ACCESS TO CAPITAL,
|
•
|
FOR THE THREE MONTHS ENDED
MARCH 31, 2018
, APPROXIMATELY 97% OF OUR NOI WAS GENERATED FROM PROPERTIES WHERE A MAJORITY OF THE REVENUES ARE DERIVED FROM OUR TENANTS’ AND RESIDENTS’ PRIVATE RESOURCES. THIS MAY IMPLY THAT WE WILL MAINTAIN OR INCREASE THE PERCENTAGE OF OUR NOI GENERATED FROM PRIVATE RESOURCES AT OUR SENIOR LIVING COMMUNITIES. HOWEVER, OUR RESIDENTS AND PATIENTS MAY BECOME UNABLE TO FUND OUR CHARGES WITH PRIVATE RESOURCES AND WE MAY BE REQUIRED OR MAY ELECT FOR BUSINESS REASONS TO ACCEPT OR PURSUE REVENUES FROM GOVERNMENT SOURCES, WHICH COULD RESULT IN AN INCREASED PART OF OUR NOI AND REVENUE BEING GENERATED FROM GOVERNMENT PAYMENTS AND OUR BECOMING MORE DEPENDENT ON GOVERNMENT PAYMENTS,
|
•
|
CIRCUMSTANCES THAT ADVERSELY AFFECT THE ABILITY OF SENIORS OR THEIR FAMILIES TO PAY FOR OUR TENANTS' AND MANAGER'S SERVICES, SUCH AS ECONOMIC DOWNTURNS, WEAK HOUSING MARKET CONDITIONS, HIGHER LEVELS OF UNEMPLOYMENT AMONG OUR RESIDENTS' FAMILY MEMBERS, LOWER LEVELS OF CONSUMER CONFIDENCE, STOCK MARKET VOLATILITY AND/OR CHANGES IN DEMOGRAPHICS GENERALLY COULD AFFECT THE PROFITABILITY OF OUR SENIOR LIVING COMMUNITIES,
|
•
|
AS OF
MARCH 31, 2018
, WE HAD ESTIMATED UNSPENT LEASING RELATED OBLIGATIONS OF
$21.8
MILLION. IT IS DIFFICULT TO ACCURATELY ESTIMATE TENANT SPACE PREPARATION COSTS. OUR UNSPENT LEASING RELATED OBLIGATIONS MAY COST MORE OR LESS AND MAY TAKE LONGER TO COMPLETE THAN WE CURRENTLY EXPECT, AND WE MAY INCUR INCREASING AMOUNTS FOR THESE AND SIMILAR PURPOSES IN THE FUTURE,
|
•
|
WE MAY NOT BE ABLE TO SELL PROPERTIES THAT WE MAY DETERMINE TO OFFER FOR SALE ON TERMS ACCEPTABLE TO US OR OTHERWISE, AND WE MAY INCUR LOSSES ON ANY SUCH SALES OR IN CONNECTION WITH DECISIONS TO PURSUE SELLING OUR PROPERTIES,
|
•
|
WE AGREED TO ACQUIRE TWO SENIOR LIVING COMMUNITIES FOR APPROXIMATELY
$23.3
MILLION, INCLUDING OUR ASSUMPTION OF APPROXIMATELY
$16.8
MILLION OF MORTGAGE DEBT AND EXCLUDING CLOSING COSTS. WE EXPECT TO ENTER MANAGEMENT AND POOLING AGREEMENTS WITH FIVE STAR FOR FIVE STAR TO MANAGE THESE SENIOR LIVING COMMUNITIES FOR US. THESE ACQUISITIONS ARE SUBJECT TO CONDITIONS. THESE CONDITIONS MAY NOT BE MET AND THESE ACQUISITIONS AND ANY RELATED MANAGEMENT AND POOLING AGREEMENTS MAY NOT OCCUR, MAY BE DELAYED BEYOND THE SECOND QUARTER OF 2018 OR THEIR TERMS MAY CHANGE,
|
•
|
WE AGREED TO SELL TWO SENIOR LIVING COMMUNITIES FOR AN AGGREGATE SALES PRICE OF APPROXIMATELY $102.5 MILLION, EXCLUDING CLOSING COSTS. THESE SALES ARE SUBJECT TO CONDITIONS. THESE CONDITIONS MAY NOT BE MET AND THESE SALES MAY NOT OCCUR, MAY BE DELAYED OR THEIR TERMS MAY CHANGE,
|
•
|
WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING FIVE STAR, RMR LLC, RMR INC., ABP TRUST, AIC AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND PROVIDE US WITH COMPETITIVE ADVANTAGES IN OPERATING AND GROWING OUR BUSINESS. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE,
|
•
|
RMR INC. MAY REDUCE THE AMOUNT OF ITS DISTRIBUTIONS TO ITS SHAREHOLDERS, INCLUDING US,
|
•
|
OUR SENIOR LIVING COMMUNITIES ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION, LICENSURE AND OVERSIGHT. WE SOMETIMES EXPERIENCE DEFICIENCIES IN THE OPERATION OF OUR SENIOR LIVING COMMUNITIES AND SOME OF OUR COMMUNITIES MAY BE PROHIBITED FROM
|
•
|
THE BUSINESS AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS, AND
|
•
|
THE CONSULTING FEES WE HAVE INCURRED MAY NOT REDUCE OUR FUTURE OPERATING AND CAPITAL EXPENDITURE COSTS AS WE EXPECT, AND SUCH COSTS MAY IN FACT INCREASE.
|
Calendar Month
|
|
Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
January 2018
|
|
4,628
|
|
|
$
|
19.15
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
4,628
|
|
|
$
|
19.15
|
|
|
—
|
|
|
$
|
—
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
4.11
|
|
|
10.1
|
|
|
10.2
|
|
|
12.1
|
|
|
31.1
|
|
|
31.2
|
|
|
31.3
|
|
|
31.4
|
|
|
32.1
|
|
|
101.1
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) related notes to these financial statements, tagged as blocks of text and in detail. (Filed herewith.)
|
|
SENIOR HOUSING PROPERTIES TRUST
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jennifer F. (Francis) Mintzer
|
|
|
Jennifer F. (Francis) Mintzer
|
|
|
President and Chief Operating Officer
|
|
|
|
Dated: May 10, 2018
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Richard W. Siedel, Jr.
|
|
|
Richard W. Siedel, Jr.
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(principal financial and accounting officer)
|
|
|
|
Dated: May 10, 2018
|
|
SNH PARTIES:
|
|
SENIOR HOUSING PROPERTIES TRUST, on behalf of itself and its subsidiaries
|
|
|
|
|
|
|
|
By:
|
/s/ David J. Hegarty
|
|
|
|
David J. Hegarty
|
|
|
|
President
|
|
|
|
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FVE PARTIES:
|
|
FIVE STAR SENIOR LIVING INC., on behalf of itself and its subsidiaries
|
|
|
|
By:
|
/s/ Bruce J. Mackey Jr.
|
|
|
|
Bruce J. Mackey Jr.
|
|
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(SEAL)
|
Name of Signatory
|
|
Date
|
Frank J. Bailey
|
|
March 10, 2004
|
Former Independent Trustee
|
|
|
|
|
|
John L. Harrington
|
|
March 10, 2004
|
Independent Trustee
|
|
|
|
|
|
David J. Hegarty
|
|
March 10, 2004
|
President, Chief Operating Officer and Assistant Secretary
|
|
|
|
|
|
Barry M. Portnoy
|
|
March 10, 2004
|
Managing Trustee
|
|
|
|
|
|
Frederick N. Zeytoonjian
|
|
March 10, 2004
|
Former Independent Trustee
|
|
|
|
|
|
William J. Sheehan
|
|
May 7, 2004
|
Former Director of Internal Audit
|
|
|
|
|
|
Adam D. Portnoy
|
|
May 30, 2007
|
Managing Trustee
|
|
|
|
|
|
Richard A. Doyle
|
|
February 27,2008
|
Former Treasurer and Chief Financial Officer
|
|
|
|
|
|
Jeffrey P. Somers
|
|
January 30, 2009
|
Independent Trustee
|
|
|
|
|
|
Jacquelyn S. Anderson
|
|
May 17, 2012
|
Assistant Secretary
|
|
|
|
|
|
Jennifer B. Clark
|
|
May 17, 2012
|
Secretary
|
|
|
|
|
|
Vern D. Larkin
|
|
May 17, 2012
|
Director of Internal Audit
|
|
|
|
|
|
Lisa Harris Jones
|
|
September 26, 2015
|
Independent Trustee
|
|
|
|
|
|
Richard W. Siedel, Jr.
|
|
January 1, 2016
|
Treasurer and Chief Financial Officer
|
|
|
|
|
|
Jennifer F. (Francis) Mintzer
|
|
May 1, 2018
|
President and Chief Operating Officer
|
|
|
|
|
Three Months Ended March 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings of an investee
|
|
$
|
237,621
|
|
|
$
|
151,649
|
|
|
$
|
141,582
|
|
|
$
|
125,474
|
|
|
$
|
162,141
|
|
|
$
|
183,997
|
|
Fixed charges
|
|
43,552
|
|
|
165,019
|
|
|
167,574
|
|
|
150,881
|
|
|
135,114
|
|
|
117,819
|
|
||||||
Adjusted earnings
|
|
$
|
281,173
|
|
|
$
|
316,668
|
|
|
$
|
309,156
|
|
|
$
|
276,355
|
|
|
$
|
297,255
|
|
|
$
|
301,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense (including net amortization of debt premiums and discounts and debt issuance costs)
|
|
$
|
43,552
|
|
|
$
|
165,019
|
|
|
$
|
167,574
|
|
|
$
|
150,881
|
|
|
$
|
135,114
|
|
|
$
|
117,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of Earnings to Fixed Charges
|
|
6.5
|
x
|
|
1.9
|
x
|
|
1.8
|
x
|
|
1.8
|
x
|
|
2.2
|
x
|
|
2.6
|
x
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Senior Housing Properties Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: May 10, 2018
|
/s/ Adam D. Portnoy
|
|
Adam D. Portnoy
|
|
Managing Trustee
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Senior Housing Properties Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: May 10, 2018
|
/s/ Jennifer B. Clark
|
|
Jennifer B. Clark
|
|
Managing Trustee
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Senior Housing Properties Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: May 10, 2018
|
/s/ Jennifer F. (Francis) Mintzer
|
|
Jennifer F. (Francis) Mintzer
|
|
President and Chief Operating Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Senior Housing Properties Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: May 10, 2018
|
/s/ Richard W. Siedel, Jr.
|
|
Richard W. Siedel, Jr.
|
|
Chief Financial Officer and Treasurer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Adam D. Portnoy
|
|
/s/ Jennifer F. (Francis) Mintzer
|
Adam D. Portnoy
|
|
Jennifer F. (Francis) Mintzer
|
Managing Trustee
|
|
President and Chief Operating Officer
|
|
|
|
|
|
|
/s/ Jennifer B. Clark
|
|
/s/ Richard W. Siedel, Jr.
|
Jennifer B. Clark
|
|
Richard W. Siedel, Jr.
|
Managing Trustee
|
|
Chief Financial Officer and Treasurer
|
Date: May 10, 2018
|