SEC Company Response from WELLTOWER INC. (WELL) (CIK 0000766704) (WELL) — Jun 27, 2017
WELLTOWER INC. (WELL) (CIK 0000766704)
Date: June 27, 2017 · CIK: 0000766704 · Accession: 0001193125-17-214938
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-08923
Letter
VIA EDGAR Office of Real Estate and Commodities United States Securities and Exchange Commission File No. 001-08923 Form 8-K Filed February 22, 2017 File No. 001-08923
Dear Ms. Monick:
The purpose of this letter is to respond to the comments raised in your letter addressed to Welltower Inc. (the “Company”) dated June 5, 2017. Our response to each comment is set forth below and, as indicated below, a disclosure will be included in future periodic filings, amendments and updates thereto or future proxy statements, as the case may be.
Form 10-K for the fiscal year ended December 31, 2016
Notes to Consolidated Financial Statements
General
1. We note your response to our prior comment 2 and that you have determined disclosure of the terms and amounts of the various management agreements with Sunrise is not necessary. We refer you to your disclosure in your Form 10-K which states that your relationship with Sunrise accounted for 23% of your total revenues for the year ended December 31, 2016. In light of the significance of your relationship with Sunrise, please confirm that you will disclose your percentage ownership interest in Sunrise and the terms and amounts of your management agreements with Sunrise in future periodic filings. This information should be disclosed for each of the periods for which income statements are presented. Please refer to ASC 850-10-50.
June 27, 2017
Page
RESPONSE:
Beginning with our Annual Reports on Form 10-K for the year ended December 31, 2017, we will add disclosure in our Notes to Consolidated Financial Statements to describe our related party transactions with Sunrise similar to the following:
As of December 31, 2016, we owned 24% of Sunrise Senior Living Management, Inc. (“Sunrise”). Sunrise provides comprehensive property management and accounting services with respect to certain of our seniors housing operating properties that Sunrise operates, for which we pay annual management fees pursuant to long-term management agreements. Our management agreements with Sunrise have initial terms expiring between January 2018 and April 2032 plus, if applicable, optional renewal periods ranging from an additional five to 15 years depending upon the property. The management fees payable to Sunrise under the management agreements include a fee based on a percentage of revenues generated by the applicable properties plus, if applicable, positive or negative adjustments based on specified performance targets. For the years ended December 31, 2016, 2015 and 2014, we recognized fees to Sunrise of $37.8 million, $36.4 million, and $37.5 million, respectively, the majority of which are reflected within property operating expenses in our Consolidated Statements of Comprehensive Income.
* * *
We hope you will find the foregoing responsive to your comments. If you have any questions regarding any of the above, please do not hesitate to call Paul D. Nungester, Senior Vice President & Controller of the Company, or the undersigned, Scott A. Estes, at 419-247-2800. Thank you very much.
Very truly yours,
Welltower Inc.
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CORRESP 1 filename1.htm CORRESP VIA EDGAR June 27, 2017 Jennifer Monick Assistant Chief Accountant Office of Real Estate and Commodities United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549-6010 Re: Welltower Inc. Form 10-K for the fiscal year ended December 31, 2016 Filed February 22, 2017 File No. 001-08923 Form 8-K Filed February 22, 2017 File No. 001-08923 Dear Ms. Monick: The purpose of this letter is to respond to the comments raised in your letter addressed to Welltower Inc. (the “Company”) dated June 5, 2017. Our response to each comment is set forth below and, as indicated below, a disclosure will be included in future periodic filings, amendments and updates thereto or future proxy statements, as the case may be. Form 10-K for the fiscal year ended December 31, 2016 Notes to Consolidated Financial Statements General 1. We note your response to our prior comment 2 and that you have determined disclosure of the terms and amounts of the various management agreements with Sunrise is not necessary. We refer you to your disclosure in your Form 10-K which states that your relationship with Sunrise accounted for 23% of your total revenues for the year ended December 31, 2016. In light of the significance of your relationship with Sunrise, please confirm that you will disclose your percentage ownership interest in Sunrise and the terms and amounts of your management agreements with Sunrise in future periodic filings. This information should be disclosed for each of the periods for which income statements are presented. Please refer to ASC 850-10-50. June 27, 2017 Page 2 RESPONSE: Beginning with our Annual Reports on Form 10-K for the year ended December 31, 2017, we will add disclosure in our Notes to Consolidated Financial Statements to describe our related party transactions with Sunrise similar to the following: As of December 31, 2016, we owned 24% of Sunrise Senior Living Management, Inc. (“Sunrise”). Sunrise provides comprehensive property management and accounting services with respect to certain of our seniors housing operating properties that Sunrise operates, for which we pay annual management fees pursuant to long-term management agreements. Our management agreements with Sunrise have initial terms expiring between January 2018 and April 2032 plus, if applicable, optional renewal periods ranging from an additional five to 15 years depending upon the property. The management fees payable to Sunrise under the management agreements include a fee based on a percentage of revenues generated by the applicable properties plus, if applicable, positive or negative adjustments based on specified performance targets. For the years ended December 31, 2016, 2015 and 2014, we recognized fees to Sunrise of $37.8 million, $36.4 million, and $37.5 million, respectively, the majority of which are reflected within property operating expenses in our Consolidated Statements of Comprehensive Income. * * * We hope you will find the foregoing responsive to your comments. If you have any questions regarding any of the above, please do not hesitate to call Paul D. Nungester, Senior Vice President & Controller of the Company, or the undersigned, Scott A. Estes, at 419-247-2800. Thank you very much. Very truly yours, Welltower Inc. By: /s/ Scott A. Estes Name: Scott A. Estes Title: Executive Vice President – Chief Financial Officer cc: Paul D. Nungester, Senior Vice President & Controller, Welltower Inc. Matthew McQueen, Senior Vice President – General Counsel & Corporate Secretary, Welltower Inc. Zachary Madden, Esq., Shumaker, Loop & Kendrick, LLP