Item 1A. RISK FACTORS

This section supplements and updates certain of the information found under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 24, 2020 (the “2019 Form 10-K”) and Part II, Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the SEC on April 8, 2020 (the “Q1 2020 Form 10-Q”) based on information currently known to us and recent developments since the date of the Q1 2020 Form 10-Q. The matters discussed below should be read in conjunction with the risk factors set forth in the 2019 Form 10-K and the Q1 2020 Form 10-Q. However, the risks and uncertainties that we face are not limited to those described below and those set forth in the 2019 Form 10-K and the Q1 2020 Form 10-Q. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, results of operations and financial condition.

There is a high degree of uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation, if any. There can be no assurance as to the total amount of financial assistance we will receive or that we will be able to comply with the applicable terms and conditions to retain such assistance.

The CARES Act was signed into law on March 27, 2020, in response to the COVID-19 pandemic. The PPPHCE Act, an expansion of the CARES Act that includes additional emergency appropriations, was signed into law on April 24, 2020. Together, the CARES Act and PPPHCE Act authorize $175 billion in funding to be distributed to healthcare providers through the Provider Relief Fund administered by HHS. These funds must be used to prevent, prepare for and respond to COVID-19 and reimburse healthcare-related expenses or lost revenues attributable to COVID-19. Under current guidance, which could change, distributions from the Provider Relief Fund are not subject to repayment, provided that the recipient uses the funds first for expenses attributable to COVID-19 and then for lost revenue attributable to COVID-19, and is able to attest to and comply with certain terms and conditions, including not using funds received from the Provider Relief Fund to reimburse expenses or losses that other sources are obligated to reimburse, providing detailed reporting to HHS, maintaining records in accordance with law and submitting to government audit and investigation. HHS has paid or allocated a portion of the total Provider Relief Fund, but may change the existing guidelines, and has not yet announced the precise method by which some future payments from the Provider Relief Fund will be determined or allocated.

We have applied for funding under Phase II and Phase III of the Provider Relief Fund on behalf of the assisted living communities in our senior living operating business and may apply for additional funding in the future. While we have begun to receive amounts under some of our Phase II applications, there can be no assurance that all our applications will be approved or that additional funds will ultimately be received in full or in part. The Company continues to evaluate the terms, conditions and permitted uses associated with the grants, including the requirements and restrictions imposed by HHS, and is in the process of determining what portions of these grants the Company will be able to retain and use. Any funds that are ultimately received and retained by us are not expected to fully offset the losses incurred in the Company’s senior living operating portfolio that are attributable to COVID-19.

We will be required to attest to and comply with the terms and conditions of any funding that we receive under the Provider Relief Fund, and to track our use of the funds in order to demonstrate such compliance. We cannot assure you that we will be in compliance with all requirements related to the payments received under the Provider Relief Fund. If we fail to appropriately comply with all of the terms and conditions, we may be required to repay some or all of these amounts and may be subject to other enforcement action, which could have a material adverse impact.

Due to the recent enactment of the CARES Act, the PPPHCE Act and other enacted legislation, there is still a high degree of uncertainty surrounding the implementation of such legislation. There can be no assurance that the terms and conditions of provider relief funding or other relief programs will not change or be interpreted in ways that affect our ability to comply with such terms and conditions in the future (which could affect our ability to retain any funding that we receive), the amount of total stimulus funding we may ultimately receive or our eligibility to participate in any future stimulus funding. We

continue to assess the potential impact of the COVID-19 pandemic and government responses to the pandemic on our business, results of operations, financial position and cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

We do not have a publicly announced repurchase plan or program in effect. The table below summarizes other repurchases of our common stock made during the quarter ended September 30, 2020.

(1)Repurchases represent shares withheld to pay taxes on the vesting of restricted stock granted to employees under our 2006 Incentive Plan or 2012 Incentive Plan or restricted stock units granted to employees under the Nationwide Health Properties, Inc. (“NHP”) 2005 Performance Incentive Plan and assumed by us in connection with our acquisition of NHP. The value of the shares withheld is the closing price of our common stock on the date the vesting or exercise occurred (or, if not a trading day, the immediately preceding trading day) or the fair market value of our common stock at the time of exercise, as the case may be.