IRVINE, Calif., Nov. 1, 2016 /PRNewswire/ --
THIRD QUARTER 2016 AND RECENT HIGHLIGHTS
-- EPS and FFO per share were $0.32 and $0.65,
respectively; FFO as adjusted was $0.72 per share
-- Completed spin-off of Quality Care
Properties, Inc. ("QCP") (NYSE:QCP) on October 31, 2016; see separate press release
dated October 31, 2016
-- Entered into definitive agreements to sell
64 communities triple-net leased to Brookdale Senior Living, Inc.
("Brookdale") for $1.125 billion and announced other planned
transactions, resulting in reduced tenant concentration and
improved lease coverage; see separate press release dated
November 1, 2016
-- Anticipate using proceeds from QCP
financing and Brookdale asset
sales to deleverage
-- Achieved year-over-year three-month SPP
Cash NOI and SPP NOI growth of 3.1% and 1.6%, respectively,
excluding QCP, led by strong life science and senior housing
operating portfolio ("SHOP") performance
-- Completed $254
million of acquisitions and announced $204 million of other dispositions
-- Commencing $211
million development of Phase III of The Cove life science
project, consisting of two Class A buildings representing up to
336,000 sq. ft.; see separate press release dated November 1, 2016
-- Executed 991,000 sq. ft. of leasing in our
life science and medical office portfolios, bringing Phase I of The
Cove to 73% leased and Phase II to 50% pre-leased
UPDATED 2016 GUIDANCE
-- Full year 2016 guidance reflects the QCP
spin-off completed on October 31,
2016, but does not include the impact of unannounced future
transactions: EPS of $1.49 –
$1.55, FFO per share of $2.35 – $2.41 and
FFO as adjusted per share of $2.69 –
$2.75
-- Excluding QCP, full year 2016 guidance for
SPP Cash NOI growth of 2.75% – 3.75% and SPP NOI growth of 1.7% –
2.7%, led by SHOP and life science
FULL YEAR 2017 OUTLOOK
-- 2017 outlook does not include the impact
from unannounced future transactions other than capital recycling
activities: EPS of $1.07 –
$1.13, FFO per share of $1.88 – $1.94 and
FFO as adjusted per share of $1.89 –
$1.95
-- 2017 outlook for SPP Cash NOI growth of
2.5% – 3.5% and SPP NOI growth of 1.5% – 2.5%
IRVINE, CA, November 1, 2016 - HCP (NYSE:HCP) announced
results for quarter ended September 30,
2016.
|
|
Three Months
Ended
September 30,
2016
|
|
Three Months
Ended
September 30,
2015
|
|
Per Share
|
|
(in thousands,
except per share amounts)
|
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
|
Change
|
|
Net
income
|
|
$
|
150,924
|
|
$
|
0.32
|
|
$
|
115,046
|
|
$
|
0.25
|
|
$
|
0.07
|
|
FFO
|
|
$
|
304,387
|
|
$
|
0.65
|
|
$
|
263,370
|
|
$
|
0.57
|
|
$
|
0.08
|
|
Other
impairments(1)
|
|
|
—
|
|
|
—
|
|
|
96,856
|
|
|
0.21
|
|
|
(0.21)
|
|
Transaction-related items(2)
|
|
|
17,568
|
|
|
0.04
|
|
|
1,538
|
|
|
—
|
|
|
0.04
|
|
Severance-related charges(3)
|
|
|
14,464
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
Foreign
currency remeasurement losses
|
|
|
94
|
|
|
—
|
|
|
4,036
|
|
|
0.01
|
|
|
(0.01)
|
|
FFO as
adjusted
|
|
$
|
336,513
|
|
$
|
0.72
|
|
$
|
365,800
|
|
$
|
0.79
|
|
$
|
(0.07)
|
|
FAD
|
|
$
|
317,540
|
|
|
|
|
$
|
309,946
|
|
|
|
|
|
|
|
________________________________________
(1)
|
For the quarter ended
September 30, 2015, other impairments reflect $70 million related
to our Four Seasons Health Care senior notes ("Four Seasons Notes")
and $27 million related to our 9% equity investment in HCR
ManorCare, Inc. ("HCRMC").
|
(2)
|
Transaction-related
items for the quarter ended September 30, 2016 primarily consist of
costs incurred for the spin-off of QCP.
|
(3)
|
Severance-related
charges for the quarter ended September 30, 2016 primarily relate
to the previously announced departure of our former President and
CEO.
|
During the third quarter 2016, operating results, excluding FAD,
reflect placing our HCRMC investments on cash basis effective
January 1, 2016. The prior year
comparable period included non-cash HCRMC income of $0.08 per share. Results for the third
quarter 2016 included the impact of an interest income benefit of
$0.01 per share from the payoff of a
senior housing development loan, representing our participation in
the appreciation of the real estate.
FFO, FFO as adjusted, FAD, SPP Cash NOI excluding QCP and SPP
NOI excluding QCP are supplemental non-GAAP financial measures that
we believe are useful in evaluating the operating performance of
real estate investment trusts. See the "Funds From Operations",
"Funds Available for Distribution" and "Net Operating Income and
Same Property Performance" sections of this release for additional
information regarding these non-GAAP financial measures.
STRATEGIC BROOKDALE
TRANSACTIONS AND OTHER DISPOSITIONS
BROOKDALE ASSET SALES &
TRANSITIONS
Today we announced that we entered into definitive agreements to
sell 64 communities triple-net leased to Brookdale for $1.125
billion to affiliates of Blackstone Real Estate Partners
VIII L.P. The transaction is expected to close in the first quarter
of 2017, and we intend to use the proceeds to pay down debt. In
addition, we have agreed with Brookdale to sell or transition 25 triple-net
leased assets within the next 12 months and transfer eight expiring
Brookdale leases to RIDEA
structures, including the transition of four assets to a new
regional operator during the fourth quarter of 2016. Combined,
these transactions will advance our strategic initiatives to reduce
Brookdale concentration while
improving lease coverage, diversifying our operator relationships
and strengthening our balance sheet and credit profile. A copy of
the corresponding press release with additional details is
available on the Investor Relations section of our website at
http://ir.hcpi.com.
OTHER DISPOSITIONS & TRANSITIONS
During the third quarter and through October 31, 2016, we announced $204 million of additional dispositions.
Significant transactions include:
- In October, we sold seven of ten properties subject to a master
lease to the current operator for an aggregate purchase price of
$88 million. As part of this
transaction, we provided a $10
million mezzanine loan with a 5-year term at a 9% interest
rate. Concurrently, we modified the in-place master lease to
transition the operations of the remaining three properties to a
new regional operator.
- Executed definitive agreements to sell four life science
facilities in Salt Lake City, UT
encompassing 324,000 sq. ft. for $76
million to the current tenant. The transaction is expected
to close in the first quarter of 2017.
For full year 2016, we expect to generate approximately
$1.3 billion of proceeds from
dispositions, inclusive of proceeds from the previously announced
RIDEA II transaction.
INVESTMENT TRANSACTIONS
During the third quarter and through October 31, 2016, we completed $254 million of acquisitions, bringing our
year-to-date total investments to $711
million. Significant transactions included:
- We completed the previously announced acquisition of seven
private pay senior housing communities for $186 million, welcoming a new operating partner
to our SHOP platform, Senior Lifestyle Corporation.
- As announced last quarter, we acquired two Class A life science
buildings totaling 137,000 sq. ft. and a four-acre parcel of land
in San Diego, CA for $49 million, growing our life science footprint
in a core market.
BALANCE SHEET AND FINANCING ACTIVITIES
THIRD QUARTER 2016 AND RECENT HIGHLIGHTS
In September, we repaid $400
million of maturing senior notes with an interest rate of
6.3%. We ended the third quarter with $1.4
billion drawn on our revolving line of credit facility and
$0.6 billion of remaining
capacity.
In October, S&P reaffirmed our BBB credit ratings, while
Fitch reaffirmed our BBB credit ratings and improved our outlook to
stable.
LIFE SCIENCE AND MEDICAL OFFICE LEASING
During the third quarter, we completed 991,000 sq. ft. of
leasing in our life science and medical office portfolios,
consisting of 429,000 sq. ft. of new leases and 562,000 sq. ft. of
renewals. Significant leasing transactions were primarily in our
life science portfolio, including:
- 10-year lease with AstraZeneca Pharmaceuticals LP, a
biopharmaceutical company, for 116,000 sq. ft. at The Cove Phase
II, bringing this phase to 50% pre-leased
- Two 8-year leases totaling 65,000 sq. ft. at The Cove Phase I,
bringing this phase to 73% leased
- 8.5-year lease for 77,000 sq. ft. in San Diego, CA
In response to the leasing success at The Cove and continued
strong demand from life science users in South San Francisco, we are commencing the
$211 million development of Phase
III, which adds two Class A buildings representing up to 336,000
sq. ft., expected to be delivered by the fourth quarter of 2018. A
copy of the press release is available on the Investor Relations
section of our website at http://ir.hcpi.com.
Visit our website for additional information, including a link
to view our development progress at The Cove, at
www.hcpi.com/portfolio-diversification/life-science.
HCR MANORCARE ("HCRMC") UPDATE
SPIN TRANSACTION
On October 31, 2016, we completed
the spin-off of QCP into an independent publicly-traded REIT. A
copy of the press release and our HCP 3.0 Post-Spin Outlook
Presentation are available on the Investor Relations section of our
website at http://ir.hcpi.com.
HCRMC THIRD QUARTER OPERATING PERFORMANCE
For the third quarter 2016, HCRMC reported normalized EBITDAR of
$119 million, bringing the
year-to-date total to $382 million.
HCRMC's normalized fixed charge coverage ratio for the trailing
twelve months ended September 30,
2016 was 1.02x. EBITDAR losses from the 33 non-strategic
assets that have sold to date, including transaction costs, totaled
$9 million for the reported twelve-month period. In addition,
EBITDAR losses for the remaining 17 non-strategic assets were
$10 million for the same period. Upon excluding EBITDAR losses
and the rent associated with the 33 assets sold to date, the
trailing twelve month normalized fixed charge coverage would have
been 1.04x. HCRMC ended the third quarter with $164 million of cash and cash equivalents.
DIVIDEND
This morning we announced that our Board of Directors declared a
quarterly cash dividend of $0.37 per
common share. The dividend will be paid on November 25, 2016 to stockholders of record as of
the close of business on November 10,
2016. A copy of the corresponding press release is available
on the Investor Relations section of our website at
http://ir.hcpi.com.
SUSTAINABILITY
In September 2016, HCP was named
to the Dow Jones Sustainability North America Index for the fourth
consecutive year and the Dow Jones Sustainability World Index for
the second consecutive year. In addition, we achieved the "Green
Star" designation from the Global Real Estate Sustainability
Benchmark (GRESB) for the fifth year in a row, representing the
highest quadrant of achievement in GRESB's annual sustainability
survey. Information about HCP's sustainability efforts can be found
on our website at www.hcpi.com/sustainable-growth.
OUTLOOK
2016 GUIDANCE
Full year 2016 guidance reflects the QCP spin-off completed on
October 31, 2016 and the impact of
$1.3 billion of dispositions expected
in 2016, inclusive of the RIDEA II transaction. Our guidance does
not include the impact of unannounced future transactions. For full
year 2016, we expect: EPS to range between $1.49 and $1.55; FFO per share to range between
$2.35 and $2.41; and FFO as adjusted
per share to range between $2.69 and
$2.75. Excluding QCP, we expect 2016 SPP Cash NOI to range
between 2.75% and 3.75%, and SPP NOI to range between 1.7% and
2.7%. Refer to the "Projected Future Operations" and "Projected SPP
Cash NOI and SPP NOI" sections of this release for additional
information regarding these estimates.
|
|
Projected Full Year
2016
SPP Cash
NOI(1)
|
|
Projected Full Year
2016
SPP
NOI(1)
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Senior housing
triple-net
|
|
0.5%
|
|
1.5%
|
|
0.3%
|
|
1.3%
|
Senior housing
operating portfolio (SHOP)
|
|
3.75%
|
|
4.75%
|
|
3.75%
|
|
4.75%
|
Life
science
|
|
7.25%
|
|
8.25%
|
|
3.7%
|
|
4.7%
|
Medical
office
|
|
2.3%
|
|
3.3%
|
|
1.3%
|
|
2.3%
|
Other(2)
|
|
0.75%
|
|
1.75%
|
|
1.4%
|
|
2.4%
|
SPP
growth
|
|
2.75%
|
|
3.75%
|
|
1.7%
|
|
2.7%
|
________________________________________
(1)
|
SPP Cash NOI and SPP
NOI exclude assets transferred to QCP and include the impact from
our pro rata share of unconsolidated joint ventures. Applying our
current methodology of including our pro rata share of
unconsolidated joint ventures, the August 9, 2016 mid-point 2016
full year projected SPP Cash NOI for total HCP, excluding QCP,
would be 2.8% and for our SHOP platform would be 4.1%.
|
(2)
|
Other primarily
includes our hospitals, U.K. real estate and all debt investments.
See our Supplemental Report for additional details.
|
2017 OUTLOOK
Full year 2017 outlook is preliminary and subject to change. It
does not include the impact from unannounced future transactions
other than capital recycling activities, but does reflect the
impact of the Brookdale
transactions announced today and other dispositions expected in
2017. For full year 2017, we expect: EPS to range between
$1.07 and $1.13; FFO per share to
range between $1.88 and $1.94; and
FFO as adjusted per share to range between $1.89 and $1.95. In addition, we expect 2017 SPP
Cash NOI to range between 2.5% and 3.5%, and SPP NOI to range
between 1.5% and 2.5%. Refer to the "Projected Future Operations"
and "Projected SPP Cash NOI and SPP NOI" sections of this release
for additional information regarding these estimates.
|
|
Projected Full Year
2017
SPP Cash
NOI
|
|
Projected Full Year
2017
SPP NOI
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Senior housing
triple-net
|
|
3.25%
|
|
4.25%
|
|
1.2%
|
|
2.2%
|
SHOP
|
|
4.0%
|
|
5.0%
|
|
4.0%
|
|
5.0%
|
Life
science
|
|
1.7%
|
|
2.7%
|
|
(0.9)%
|
|
0.1%
|
Medical
office
|
|
2.0%
|
|
3.0%
|
|
2.2%
|
|
3.2%
|
Other
|
|
0.75%
|
|
1.75%
|
|
1.7%
|
|
2.7%
|
SPP
growth
|
|
2.5%
|
|
3.5%
|
|
1.5%
|
|
2.5%
|
COMPANY INFORMATION
HCP has scheduled a conference call and webcast for Tuesday, November 1, 2016 at 9:00 a.m.
Pacific Time (12:00 p.m. Eastern Time) to present its
performance and operating results for the quarter ended
September 30, 2016. The conference call is accessible by
dialing (888) 317-6003 (U.S.) or (412) 317-6061 (International).
The conference ID number is 8126374. You may also access the
conference call via webcast at www.hcpi.com. This link can be found
in the "News and Events" section, which is under "Investor
Relations". Through November 16,
2016, an archive of the webcast will be available on our
website, and a telephonic replay can be accessed by dialing (877)
344-7529 (U.S.) or (412) 317-0088 (International) and entering
conference ID number 10094605. Our HCP 3.0 Post-Spin Outlook
Presentation and supplemental information package for the current
period are available with this earnings release on our website in
the "Financial Information" section under "Investor
Relations".
ABOUT HCP
HCP, Inc. is a fully integrated real estate investment trust
(REIT) that invests primarily in real estate serving the healthcare
industry in the United States. HCP
owns a large-scale portfolio diversified across multiple sectors,
led by senior housing, life science and medical office. Recognized
as a global leader in sustainability, HCP has been a
publicly-traded company since 1985 and was the first healthcare
REIT selected to the S&P 500 index. For more information
regarding HCP, visit www.hcpi.com.
FORWARD-LOOKING STATEMENTS
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: The statements contained in this
release which are not historical facts are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements include, among other things,
(i) all statements under the heading "Outlook," including without
limitation with respect to expected EPS, FFO per share, FFO as
adjusted per share, SPP Cash NOI and SPP NOI projections, and other
financial projections and assumptions, including those in the
"Projected Future Operations," "Other Supplemental Information" and
"Projected SPP NOI and SPP Cash NOI" sections of this release, as
well as comparable statements included in other sections of this
release; (ii) statements regarding the payment of the quarterly
cash dividend; and (iii) statements regarding timing, outcomes and
other details relating to the pending or contemplated acquisitions,
dispositions, developments, joint venture transactions, capital
recycling and financing activities, and other transactions
discussed in this release, including without limitation those
described under the heading "Strategic Brookdale Transactions and
Other Dispositions." These statements are made as of the date
hereof, are not guarantees of future performance and are subject to
known and unknown risks, uncertainties, assumptions and other
factors—many of which are out of HCP's and its management's control
and difficult to forecast—that could cause actual results to differ
materially from those set forth in or implied by such
forward-looking statements. These risks and uncertainties include,
but are not limited to: our reliance on a concentration of a small
number of tenants and operators for a significant portion of our
revenues, with our concentration in Brookdale increasing as a result of the
consummation of the spin-off of QCP on October 31, 2016; the financial condition of our
existing and future tenants, operators and borrowers, including
potential bankruptcies and downturns in their businesses, and their
legal and regulatory proceedings, which results in uncertainties
regarding our ability to continue to realize the full benefit of
such tenants' and operators' leases and borrowers' loans; the
ability of our existing and future tenants, operators and borrowers
to conduct their respective businesses in a manner sufficient to
maintain or increase their revenues and to generate sufficient
income to make rent and loan payments to us and our ability to
recover investments made, if applicable, in their operations;
competition for tenants and operators, including with respect to
new leases and mortgages and the renewal or rollover of existing
leases; competition for skilled management and other key personnel;
availability of suitable properties to acquire at favorable prices
and the competition for the acquisition and financing of those
properties; our ability to negotiate the same or better terms with
new tenants or operators if existing leases are not renewed or we
exercise our right to replace an existing tenant or operator upon
default; the risks associated with our investments in joint
ventures and unconsolidated entities, including our lack of sole
decision making authority and our reliance on our partners'
financial condition and continued cooperation; our ability to
achieve the benefits of investments, including those investments
discussed above, within expected time frames or at all, or within
expected cost projections; the potential impact on us and our
tenants, operators and borrowers from current and future litigation
matters, including the possibility of larger than expected
litigation costs, adverse results and related developments; the
effect on our tenants and operators of legislation and other legal
requirements, including licensure, certification and inspection
requirements, and laws addressing entitlement programs and related
services, including Medicare and Medicaid, which may result in
future reductions in reimbursements; changes in federal, state or
local laws and regulations, including those affecting the
healthcare industry that affect our costs of compliance or increase
the costs, or otherwise affect the operations, of our tenants and
operators; volatility or uncertainty in the capital markets, the
availability and cost of capital as impacted by interest rates,
changes in our credit ratings, and the value of our common stock,
and other conditions that may adversely impact our ability to fund
our obligations or consummate transactions, or reduce the earnings
from potential transactions; changes in global, national and local
economic conditions, and currency exchange rates; changes in the
credit ratings on U.S. government debt securities or default or
delay in payment by the government of its obligations; our ability
to manage our indebtedness level and changes in the terms of such
indebtedness; the ability to maintain our qualification as a real
estate investment trust; the impact of the spin-off transaction on
our business; and other risks and uncertainties described from time
to time in HCP's Securities and Exchange Commission filings. The
Company cautions investors not to place undue reliance on any
forward-looking statements. HCP assumes no, and hereby disclaims
any, obligation to update any of the foregoing or any other
forward-looking statements as a result of new information or new or
future developments, except as otherwise required by law.
CONTACT
Thomas M. Herzog
Executive Vice President and Chief Financial Officer
949-407-0400
HCP,
Inc.
|
Consolidated
Balance Sheets
|
In thousands,
except share and per share data
|
(Unaudited)
|
|
|
September
30,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
Assets
|
|
|
|
|
Real
estate:
|
|
|
|
|
|
|
Buildings and
improvements
|
$
|
12,534,471
|
|
$
|
12,198,704
|
|
Development costs and
construction in progress
|
|
395,349
|
|
|
388,576
|
|
Land
|
|
1,971,601
|
|
|
1,948,757
|
|
Accumulated
depreciation and amortization
|
|
(2,799,969)
|
|
|
(2,541,334)
|
|
Net real
estate
|
|
12,101,452
|
|
|
11,994,703
|
|
|
|
|
|
|
|
|
Net investment in
direct financing leases ("DFLs")
|
|
5,860,401
|
|
|
5,905,009
|
|
Loans receivable,
net
|
|
682,994
|
|
|
768,743
|
|
Investments in and
advances to unconsolidated joint ventures
|
|
592,097
|
|
|
605,244
|
|
Accounts receivable,
net of allowance of $4,704 and $3,261, respectively
|
|
41,371
|
|
|
48,929
|
|
Cash and cash
equivalents
|
|
132,891
|
|
|
346,500
|
|
Restricted
cash
|
|
71,727
|
|
|
60,616
|
|
Intangible assets,
net
|
|
538,631
|
|
|
603,706
|
|
Real estate and
related assets held for sale, net
|
|
372,968
|
|
|
314,126
|
|
Other assets,
net
|
|
794,013
|
|
|
802,273
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
21,188,545
|
|
$
|
21,449,849
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Bank line of
credit
|
$
|
1,372,032
|
|
$
|
397,432
|
|
Term loans
|
|
462,181
|
|
|
524,807
|
|
Senior unsecured
notes
|
|
8,229,731
|
|
|
9,120,107
|
|
Mortgage
debt
|
|
762,715
|
|
|
932,212
|
|
Other debt
|
|
93,876
|
|
|
94,445
|
|
Intangible
liabilities, net
|
|
46,135
|
|
|
56,147
|
|
Intangible and other
liabilities related to assets held for sale, net
|
|
23,002
|
|
|
19,126
|
|
Accounts payable and
accrued liabilities
|
|
487,033
|
|
|
436,239
|
|
Deferred
revenue
|
|
136,406
|
|
|
123,017
|
|
Total
liabilities
|
|
11,613,111
|
|
|
11,703,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $1.00
par value: 750,000,000 shares authorized; 467,820,181 and
465,488,492 shares issued and outstanding, respectively
|
|
467,820
|
|
|
465,488
|
|
Additional paid-in
capital
|
|
11,720,552
|
|
|
11,647,039
|
|
Cumulative dividends
in excess of earnings
|
|
(2,975,096)
|
|
|
(2,738,414)
|
|
Accumulated other
comprehensive loss
|
|
(30,164)
|
|
|
(30,470)
|
|
Total stockholders'
equity
|
|
9,183,112
|
|
|
9,343,643
|
|
|
|
|
|
|
|
|
Joint venture
partners
|
|
212,807
|
|
|
217,066
|
|
Non-managing member
unitholders
|
|
179,515
|
|
|
185,608
|
|
Total noncontrolling
interests
|
|
392,322
|
|
|
402,674
|
|
|
|
|
|
|
|
|
Total
equity
|
|
9,575,434
|
|
|
9,746,317
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
21,188,545
|
|
$
|
21,449,849
|
|
HCP,
Inc.
|
Consolidated
Statements of Operations
|
In thousands,
except per share data
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related
revenues
|
$
|
297,178
|
|
$
|
293,566
|
|
$
|
893,448
|
|
$
|
845,382
|
|
Tenant
recoveries
|
|
35,195
|
|
|
33,084
|
|
|
100,862
|
|
|
94,356
|
|
Resident fees and
services
|
|
170,752
|
|
|
155,290
|
|
|
500,717
|
|
|
367,141
|
|
Income from direct
financing leases
|
|
130,663
|
|
|
155,717
|
|
|
390,731
|
|
|
478,976
|
|
Interest
income
|
|
20,482
|
|
|
19,842
|
|
|
71,298
|
|
|
89,049
|
|
Total
revenues
|
|
654,270
|
|
|
657,499
|
|
|
1,957,056
|
|
|
1,874,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
117,860
|
|
|
122,157
|
|
|
361,255
|
|
|
357,569
|
|
Depreciation and
amortization
|
|
142,874
|
|
|
134,704
|
|
|
425,582
|
|
|
369,629
|
|
Operating
|
|
188,747
|
|
|
173,515
|
|
|
545,827
|
|
|
441,888
|
|
General and
administrative
|
|
34,787
|
|
|
20,534
|
|
|
83,079
|
|
|
74,152
|
|
Acquisition and
pursuit costs
|
|
17,568
|
|
|
1,553
|
|
|
34,570
|
|
|
23,350
|
|
Impairments
|
|
—
|
|
|
69,622
|
|
|
—
|
|
|
592,921
|
|
Total costs and
expenses
|
|
501,836
|
|
|
522,085
|
|
|
1,450,313
|
|
|
1,859,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on sales
of real estate
|
|
(9)
|
|
|
52
|
|
|
119,605
|
|
|
6,377
|
|
Other income
(expense), net
|
|
1,454
|
|
|
(572)
|
|
|
5,128
|
|
|
13,125
|
|
Total other income
(expense), net
|
|
1,445
|
|
|
(520)
|
|
|
124,733
|
|
|
19,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes and equity (loss) income from and impairment of
unconsolidated joint ventures
|
|
153,879
|
|
|
134,894
|
|
|
631,476
|
|
|
34,897
|
|
Income tax benefit
(expense)
|
|
2,213
|
|
|
1,980
|
|
|
(48,822)
|
|
|
6,620
|
|
Equity (loss) income
from unconsolidated joint ventures
|
|
(2,053)
|
|
|
8,314
|
|
|
(4,028)
|
|
|
33,916
|
|
Impairment of
investments in unconsolidated joint ventures
|
|
—
|
|
|
(27,234)
|
|
|
—
|
|
|
(27,234)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
154,039
|
|
|
117,954
|
|
|
578,626
|
|
|
48,199
|
|
Noncontrolling
interests' share in earnings
|
|
(2,789)
|
|
|
(2,592)
|
|
|
(9,540)
|
|
|
(8,566)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to HCP, Inc.
|
|
151,250
|
|
|
115,362
|
|
|
569,086
|
|
|
39,633
|
|
Participating
securities' share in earnings
|
|
(326)
|
|
|
(316)
|
|
|
(977)
|
|
|
(1,020)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
applicable to common shares
|
$
|
150,924
|
|
$
|
115,046
|
|
$
|
568,109
|
|
$
|
38,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.32
|
|
$
|
0.25
|
|
$
|
1.22
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
0.32
|
|
$
|
0.25
|
|
$
|
1.22
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
467,628
|
|
|
463,337
|
|
|
466,931
|
|
|
462,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
467,835
|
|
|
463,586
|
|
|
467,132
|
|
|
462,302
|
|
HCP,
Inc.
|
Consolidated
Statements of Cash Flows
|
In
thousands
|
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2015
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
|
578,626
|
|
$
|
48,199
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
425,582
|
|
369,629
|
|
Amortization of market
lease intangibles, net
|
(1,393)
|
|
(980)
|
|
Amortization of
deferred compensation
|
19,307
|
|
21,068
|
|
Amortization of
deferred financing costs
|
15,598
|
|
14,950
|
|
Straight-line
rents
|
(14,412)
|
|
(24,817)
|
|
Loan and direct
financing lease non-cash interest
|
385
|
|
(71,243)
|
|
Deferred rental
revenues
|
(1,027)
|
|
(1,496)
|
|
Equity loss (income)
from unconsolidated joint ventures
|
4,028
|
|
(33,916)
|
|
Distributions of
earnings from unconsolidated joint ventures
|
5,919
|
|
4,587
|
|
Lease termination
income, net
|
—
|
|
(1,103)
|
|
Gain on sales of real
estate
|
(119,605)
|
|
(6,377)
|
|
Deferred income tax
expense
|
47,195
|
|
—
|
|
Foreign exchange and
other gains, net
|
(127)
|
|
(7,103)
|
|
Impairments
|
—
|
|
620,155
|
|
Changes
in:
|
|
|
|
|
Accounts receivable,
net
|
7,558
|
|
(10,634)
|
|
Other assets,
net
|
(9,674)
|
|
(1,186)
|
|
Accounts payable and
accrued liabilities
|
40,672
|
|
(52,073)
|
|
Net cash provided by
operating activities
|
998,632
|
|
867,660
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisitions of real
estate
|
(257,242)
|
|
(1,200,661)
|
|
Development of real
estate
|
(304,818)
|
|
(190,082)
|
|
Leasing costs and
tenant and capital improvements
|
(64,501)
|
|
(52,371)
|
|
Proceeds from sales
of real estate, net
|
211,810
|
|
19,555
|
|
Contributions to
unconsolidated joint ventures
|
(10,169)
|
|
(43,242)
|
|
Distributions in
excess of earnings from unconsolidated joint ventures
|
14,458
|
|
16,086
|
|
Proceeds from the
sales of marketable securities
|
—
|
|
782
|
|
Principal repayments
on loans receivable, DFLs and other
|
221,179
|
|
51,491
|
|
Investments in loans
receivable and other
|
(129,335)
|
|
(283,252)
|
|
Decrease (increase)
in restricted cash
|
4,459
|
|
(3,891)
|
|
Net cash used in
investing activities
|
(314,159)
|
|
(1,685,585)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net borrowings under
bank line of credit
|
1,157,897
|
|
282,099
|
|
Repayments under bank
line of credit
|
(135,000)
|
|
(102,063)
|
|
Borrowings under term
loan
|
—
|
|
333,014
|
|
Issuance of senior
unsecured notes
|
—
|
|
1,338,555
|
|
Repayments of senior
unsecured notes
|
(900,000)
|
|
(400,000)
|
|
Repayments of
mortgage and other debt
|
(249,540)
|
|
(50,187)
|
|
Deferred financing
costs
|
(1,057)
|
|
(14,556)
|
|
Issuance of common
stock and exercise of options
|
59,184
|
|
169,497
|
|
Repurchase of common
stock
|
(8,667)
|
|
(8,006)
|
|
Dividends paid on
common stock
|
(806,243)
|
|
(783,578)
|
|
Issuance of
noncontrolling interests
|
4,785
|
|
4,812
|
|
Distributions to
noncontrolling interests
|
(18,687)
|
|
(13,707)
|
|
Net cash (used in)
provided by financing activities
|
(897,328)
|
|
755,880
|
|
Effect of foreign
exchange on cash and cash equivalents
|
(754)
|
|
(1,267)
|
|
Net decrease in cash
and cash equivalents
|
(213,609)
|
|
(63,312)
|
|
Cash and cash
equivalents, beginning of period
|
346,500
|
|
183,810
|
|
Cash and cash
equivalents, end of period
|
$
|
132,891
|
|
$
|
120,498
|
|
HCP,
Inc.
|
Funds From
Operations(1)
|
In thousands,
except per share data
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
applicable to common shares
|
$
|
150,924
|
|
$
|
115,046
|
|
$
|
568,109
|
|
$
|
38,613
|
|
Depreciation and
amortization
|
|
142,874
|
|
|
134,704
|
|
|
425,582
|
|
|
369,629
|
|
Other depreciation
and amortization(2)
|
|
2,986
|
|
|
5,204
|
|
|
8,922
|
|
|
17,016
|
|
Loss (gain) on sales
of real estate
|
|
9
|
|
|
(52)
|
|
|
(119,605)
|
|
|
(6,377)
|
|
Taxes associated with
real estate disposition(3)
|
|
257
|
|
|
—
|
|
|
53,434
|
|
|
—
|
|
Impairment of real
estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,948
|
|
Equity loss (income)
from unconsolidated joint ventures
|
|
2,053
|
|
|
(8,314)
|
|
|
4,028
|
|
|
(33,916)
|
|
FFO from
unconsolidated joint ventures
|
|
10,554
|
|
|
20,530
|
|
|
32,104
|
|
|
69,322
|
|
Noncontrolling
interests' and participating securities' share in
earnings
|
|
3,115
|
|
|
2,908
|
|
|
10,517
|
|
|
9,586
|
|
Noncontrolling
interests' and participating securities' share in FFO
|
|
(8,385)
|
|
|
(6,656)
|
|
|
(26,227)
|
|
|
(18,983)
|
|
FFO applicable to
common shares
|
$
|
304,387
|
|
$
|
263,370
|
|
$
|
956,864
|
|
$
|
447,838
|
|
Distributions on
dilutive convertible units
|
|
2,376
|
|
|
2,365
|
|
|
10,622
|
|
|
—
|
|
Diluted FFO
applicable to common shares
|
$
|
306,763
|
|
$
|
265,735
|
|
$
|
967,486
|
|
$
|
447,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per
common share
|
$
|
0.65
|
|
$
|
0.57
|
|
$
|
2.05
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate diluted FFO per share
|
|
471,994
|
|
|
467,772
|
|
|
473,011
|
|
|
462,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
adjustments to FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
impairments(4)
|
$
|
—
|
|
$
|
96,856
|
|
$
|
—
|
|
$
|
617,207
|
|
Transaction-related
items
|
|
17,568
|
|
|
1,538
|
|
|
34,570
|
|
|
28,973
|
|
Severance-related
charges(5)
|
|
14,464
|
|
|
—
|
|
|
14,464
|
|
|
6,713
|
|
Foreign currency
remeasurement losses (gains)
|
|
94
|
|
|
4,036
|
|
|
268
|
|
|
(5,497)
|
|
|
$
|
32,126
|
|
$
|
102,430
|
|
$
|
49,302
|
|
$
|
647,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO as adjusted
applicable to common shares
|
$
|
336,513
|
|
$
|
365,800
|
|
$
|
1,006,166
|
|
$
|
1,095,234
|
|
Distributions on
dilutive convertible units and other
|
|
3,467
|
|
|
3,443
|
|
|
10,549
|
|
|
10,198
|
|
Diluted FFO as
adjusted applicable to common shares
|
$
|
339,980
|
|
$
|
369,243
|
|
$
|
1,016,715
|
|
$
|
1,105,432
|
|
Per common share
impact of adjustments on diluted FFO
|
$
|
0.07
|
|
$
|
0.22
|
|
$
|
0.10
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO as
adjusted per common share
|
$
|
0.72
|
|
$
|
0.79
|
|
$
|
2.15
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate diluted FFO as adjusted per
share
|
|
473,692
|
|
|
469,590
|
|
|
473,011
|
|
|
468,320
|
|
_______________________________________
(1)
|
See "Results of
Operations-Non-GAAP Financial Measures" and "Non-GAAP Financial
Measures Reconciliations" included in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2016 for definitions
of FFO and FFO as adjusted and an important discussion of their
uses and inherent limitations.
|
(2)
|
Other depreciation
and amortization includes DFL depreciation and lease incentive
amortization (reduction of straight-line rents) for the
consideration given to terminate the 30 purchase options of the
153-property amended lease portfolio in the 2014 Brookdale
transaction. Beginning January 2016, we changed our accounting
treatment for the HCRMC DFL investments to recognize rental income
on a cash basis. As such, we no longer recognize non-cash
depreciation related to the HCRMC DFL investments.
|
(3)
|
For the nine months
ended September 30, 2016, net income includes $53 million, of which
$49 million relates to the HCRMC real estate portfolio, of income
tax expense associated with state built-in gain tax payable upon
the disposition of specific real estate assets. See Note 5 to the
Consolidated Financial Statements for the quarter ended September
30, 2016 included in our Quarterly Report on Form 10-Q.
|
(4)
|
For the three months
ended September 30, 2015, other impairments include: (i) $70
million related to our Four Seasons Notes and (ii) $27 million
related to our equity investment in HCRMC. For the nine months
ended September 30, 2015, other impairments include: (i) $478
million related to our DFL investments with HCRMC, (ii) $112
million related to our Four Seasons Notes and (iii) $27 million
related to our equity investment in HCRMC.
|
(5)
|
The severance-related
charges for the three and nine months ended September 30, 2016,
primarily relate to the departure of our former President and Chief
Executive Officer. The severance-related charges for the nine
months ended September 30, 2015, relate to the resignation of our
former Executive Vice President and Chief Investment
Officer.
|
HCP,
Inc.
|
Funds Available
for Distribution(1)
|
In
thousands
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO as adjusted
applicable to common shares
|
$
|
336,513
|
|
$
|
365,800
|
|
$
|
1,006,166
|
|
$
|
1,095,234
|
|
Amortization of
market lease intangibles, net
|
|
(421)
|
|
|
(344)
|
|
|
(1,393)
|
|
|
(980)
|
|
Amortization of
deferred compensation(2)
|
|
3,389
|
|
|
5,344
|
|
|
12,894
|
|
|
18,174
|
|
Amortization of
deferred financing costs
|
|
5,037
|
|
|
5,224
|
|
|
15,598
|
|
|
14,950
|
|
Straight-line
rents
|
|
(3,295)
|
|
|
(7,069)
|
|
|
(14,412)
|
|
|
(24,817)
|
|
DFL non-cash
interest(3)
|
|
637
|
|
|
(22,662)
|
|
|
1,967
|
|
|
(64,176)
|
|
Other depreciation
and amortization
|
|
(2,986)
|
|
|
(5,204)
|
|
|
(8,921)
|
|
|
(17,016)
|
|
Deferred revenues –
tenant improvement related
|
|
(459)
|
|
|
(746)
|
|
|
(1,451)
|
|
|
(2,137)
|
|
Deferred revenues –
additional rents
|
|
240
|
|
|
254
|
|
|
424
|
|
|
641
|
|
Leasing costs and
tenant and capital improvements
|
|
(22,722)
|
|
|
(23,212)
|
|
|
(62,774)
|
|
|
(50,879)
|
|
Lease restructure
payments(4)
|
|
1,868
|
|
|
6,067
|
|
|
14,480
|
|
|
16,368
|
|
Joint venture
adjustments – CCRC entrance fees(5)
|
|
7,201
|
|
|
8,386
|
|
|
22,424
|
|
|
22,048
|
|
Joint venture and
other FAD adjustments(3)
|
|
(7,462)
|
|
|
(21,892)
|
|
|
(20,565)
|
|
|
(59,153)
|
|
FAD applicable to
common shares
|
$
|
317,540
|
|
$
|
309,946
|
|
$
|
964,437
|
|
$
|
948,257
|
|
Distributions on
dilutive convertible units
|
|
3,513
|
|
|
3,547
|
|
|
10,622
|
|
|
10,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FAD
applicable to common shares
|
$
|
321,053
|
|
$
|
313,493
|
|
$
|
975,059
|
|
$
|
958,940
|
|
________________________________________
(1)
|
See "Results of
Operations-Non-GAAP Financial Measures" and "Non-GAAP Financial
Measures Reconciliations" included in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2016 for the definition of
FAD and an important discussion of its uses and inherent
limitations.
|
(2)
|
Excludes $6 million
primarily related to the acceleration of deferred compensation for
restricted stock units and stock options that vested upon the
departure of our former President and Chief Executive Officer,
which is included in the severance-related charges for the three
and nine months ended September 30, 2016. Excludes $3 million
related to the acceleration of deferred compensation for restricted
stock units and stock options that vested upon the resignation of
HCP's former Executive Vice President and Chief Investment Officer,
which is included in the severance-related charges for the nine
months ended September 30, 2015.
|
(3)
|
For the three and
nine months ended September 30, 2015, DFL non-cash interest
reflects an elimination of $14 million and $44 million,
respectively. Our equity investment in HCRMC is accounted for using
the equity method, which requires an elimination of DFL income that
is proportional to our ownership in HCRMC. Further, our share of
earnings from HCRMC (equity income) increases for the corresponding
elimination of related lease expense recognized at the HCRMC entity
level, which we present as a non-cash joint venture FAD adjustment.
Beginning January 2016, equity income is recognized only if cash
distributions are received from HCRMC; as a result, we no longer
eliminate our proportional ownership share of income from DFLs to
equity income (loss) from unconsolidated joint ventures for our
equity investment in HCRMC.
|
(4)
|
Over a period of
three years from the closing of a transaction with Brookdale in
2014, we will receive installment payments valued at $55 million
for terminating the leases on the HCP owned 49-property portfolio;
we include these installment payments in FAD as the payments are
collected.
|
(5)
|
Represents our 49%
share of non-refundable entrance fees included in FAD as the fees
are collected by our CCRC JV.
|
HCP,
Inc.
|
Net Operating
Income and Same Property
Performance(1)
|
Dollars in
thousands
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net
income
|
$
|
154,039
|
|
$
|
117,954
|
|
$
|
578,626
|
|
$
|
48,199
|
|
Interest
income
|
|
(20,482)
|
|
|
(19,842)
|
|
|
(71,298)
|
|
|
(89,049)
|
|
Interest
expense
|
|
117,860
|
|
|
122,157
|
|
|
361,255
|
|
|
357,569
|
|
Depreciation and
amortization
|
|
142,874
|
|
|
134,704
|
|
|
425,582
|
|
|
369,629
|
|
General and
administrative
|
|
34,787
|
|
|
20,534
|
|
|
83,079
|
|
|
74,152
|
|
Acquisition and
pursuit costs
|
|
17,568
|
|
|
1,553
|
|
|
34,570
|
|
|
23,350
|
|
Impairment
|
|
—
|
|
|
69,622
|
|
|
—
|
|
|
592,921
|
|
Loss (gain) on sales
of real estate
|
|
9
|
|
|
(52)
|
|
|
(119,605)
|
|
|
(6,377)
|
|
Other (income)
expense, net
|
|
(1,454)
|
|
|
572
|
|
|
(5,128)
|
|
|
(13,125)
|
|
Income tax (benefit)
expense(2)
|
|
(2,213)
|
|
|
(1,980)
|
|
|
48,822
|
|
|
(6,620)
|
|
Equity loss (income)
from unconsolidated joint ventures
|
|
2,053
|
|
|
(8,314)
|
|
|
4,028
|
|
|
(33,916)
|
|
Impairment of
investments in unconsolidated joint ventures
|
|
—
|
|
|
27,234
|
|
|
—
|
|
|
27,234
|
|
HCP's share of
unconsolidated joint ventures revenues
|
|
53,814
|
|
|
48,595
|
|
|
160,779
|
|
|
141,892
|
|
HCP's share of
unconsolidated joint ventures operating expenses
|
|
(43,037)
|
|
|
(39,820)
|
|
|
(126,899)
|
|
|
(114,089)
|
|
NOI
|
$
|
455,818
|
|
$
|
472,917
|
|
$
|
1,373,811
|
|
$
|
1,371,770
|
|
Non-SPP
NOI
|
|
(20,949)
|
|
|
(23,823)
|
|
|
(146,575)
|
|
|
(96,436)
|
|
SPP
NOI
|
$
|
434,869
|
|
$
|
449,094
|
|
$
|
1,227,236
|
|
$
|
1275,334
|
|
QCP SPP
NOI
|
|
(123,914)
|
|
|
(142,967)
|
|
|
(368,240)
|
|
|
(436,182)
|
|
SPP NOI, excluding
QCP(3)
|
$
|
310,955
|
|
$
|
306,127
|
|
$
|
858,996
|
|
$
|
839,152
|
|
Non-cash adjustment
to SPP NOI, excluding QCP
|
|
(1,344)
|
|
|
(5,793)
|
|
|
(8,056)
|
|
|
(18,383)
|
|
SPP cash (adjusted)
NOI, excluding QCP(3)
|
$
|
309,611
|
|
$
|
300,334
|
|
$
|
850,940
|
|
$
|
820,769
|
|
NOI % change – SPP,
excluding QCP(3)
|
|
1.6%
|
|
|
|
|
|
2.4%
|
|
|
|
|
Cash (adjusted) NOI
% change – SPP, excluding
QCP(3)
|
|
3.1%
|
|
|
|
|
|
3.7%
|
|
|
|
|
________________________________________
(1)
|
See "Results of
Operations-Non-GAAP Financial Measures" and "Non-GAAP Financial
Measures Reconciliations" included in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2016 for definitions
of NOI, Cash NOI and SPP and an important discussion of their uses
and inherent limitations.
|
(2)
|
For the nine months
ended September 30, 2016, net income includes $53 million, of which
$49 million relates to the HCRMC real estate portfolio, of income
tax expense associated with state built-in gain tax payable upon
the disposition of specific real estate assets. See Note 5 to the
Consolidated Financial Statements for the quarter ended September
30, 2016 included in our Quarterly Report on Form 10-Q.
|
(3)
|
SPP Cash NOI,
excluding QCP represents SPP NOI excluding income from DFLs
associated with the HCRMC leased properties and rental and related
revenues from 28 other healthcare related properties included in
spin-off of QCP. SPP Cash NOI, excluding QCP allows management to
evaluate the performance of our remaining real estate portfolio
following the completion of the spin-off of QCP.
|
HCP,
Inc.
|
Projected Future
Operations(1)
|
(Unaudited)
|
|
|
Full Year
2016
|
|
Full Year
2017
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
Diluted earnings
per common share
|
$
1.49
|
|
$
1.55
|
|
$
1.07
|
|
$
1.13
|
Depreciation and
amortization
|
1.20
|
|
1.20
|
|
1.11
|
|
1.11
|
Other depreciation and
amortization
|
0.03
|
|
0.03
|
|
0.02
|
|
0.02
|
Taxes associated with
real estate disposition
|
0.11
|
|
0.11
|
|
—
|
|
—
|
Gain on sales of real
estate
|
(0.54)
|
|
(0.54)
|
|
(0.43)
|
|
(0.43)
|
Joint venture FFO
adjustments
|
0.06
|
|
0.06
|
|
0.11
|
|
0.11
|
Diluted FFO per
common share
|
$
2.35
|
|
$
2.41
|
|
$
1.88
|
|
$
1.94
|
Transaction-related
items and other
|
0.21
|
|
0.21
|
|
0.01
|
|
0.01
|
Loss on extinguishment
of debt(2)
|
0.10
|
|
0.10
|
|
—
|
|
—
|
Severance-related
charges(3)
|
0.03
|
|
0.03
|
|
—
|
|
—
|
Diluted FFO as
adjusted per common share
|
$
2.69
|
|
$
2.75
|
|
$
1.89
|
|
$
1.95
|
|
|
|
|
|
|
|
|
Other Supplemental
Information(1)
|
(Unaudited)
|
|
|
Full Year
2016
|
|
Full Year
2017
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of net
market lease intangibles and deferred revenues
|
$
|
(0.01)
|
|
$
|
(0.01)
|
|
$
|
—
|
|
$
|
—
|
Amortization of
deferred compensation
|
|
0.03
|
|
|
0.03
|
|
|
0.04
|
|
|
0.04
|
Amortization of
deferred financing costs
|
|
0.04
|
|
|
0.04
|
|
|
0.03
|
|
|
0.03
|
Straight-line
rents
|
|
(0.04)
|
|
|
(0.04)
|
|
|
(0.03)
|
|
|
(0.03)
|
Other depreciation
and amortization
|
|
(0.03)
|
|
|
(0.03)
|
|
|
(0.02)
|
|
|
(0.02)
|
Leasing costs and
tenant and capital improvements
|
|
(0.19)
|
|
|
(0.19)
|
|
|
(0.20)
|
|
|
(0.20)
|
Lease restructure
payments
|
|
0.04
|
|
|
0.04
|
|
|
0.01
|
|
|
0.01
|
Joint venture
adjustments – CCRC entrance fees
|
|
0.07
|
|
|
0.07
|
|
|
0.07
|
|
|
0.07
|
Joint venture and
other FAD adjustments
|
|
(0.05)
|
|
|
(0.05)
|
|
|
(0.09)
|
|
|
(0.09)
|
________________________________________
(1)
|
The foregoing
projections reflect management's view of current and future market
conditions, including assumptions with respect to rental rates,
occupancy levels, development items and the earnings impact of the
events referenced in this release. These projections do not reflect
unannounced future transactions, except as described herein, other
impairments or recoveries, the future bankruptcy or insolvency of
our operators, lessees, borrowers or other obligors, the effect of
any future restructuring of our contractual relationships with such
entities, gains or losses on marketable securities, ineffectiveness
related to our cash flow hedges, or existing and future litigation
matters including the possibility of larger than expected
litigation costs and related developments. Our actual results may
differ materially from the projections set forth above. The
aforementioned ranges represent management's best estimates based
upon the underlying assumptions as of the date of this press
release. Except as otherwise required by law, management assumes
no, and hereby disclaims any, obligation to update any of the
foregoing projections as a result of new information or new or
future developments.
|
(2)
|
Prepayment costs
associated with early retirement or payment of debt subsequent to
the spin and RIDEA II transactions.
|
(3)
|
Severance-related
charges primarily relate to the departure of our former President
and Chief Executive Officer.
|
HCP,
Inc.
|
Projected SPP Cash
NOI and NOI(1)
|
Dollars in
thousands
|
(Unaudited)
|
|
For the projected
full year 2016 (low):
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
QCP
|
|
Total
|
|
NOI(2)
|
|
$
|
416,800
|
|
$
|
236,700
|
|
$
|
289,700
|
|
$
|
272,000
|
|
$
|
123,700
|
|
$
|
402,600
|
|
$
|
1,741,500
|
|
Non-SPP
NOI
|
|
|
(22,700)
|
|
|
(126,200)
|
|
|
(38,600)
|
|
|
(35,150)
|
|
|
(27,850)
|
|
|
(402,600)
|
|
|
(653,100)
|
|
SPP
NOI
|
|
|
394,100
|
|
|
110,500
|
|
|
251,100
|
|
|
236,850
|
|
|
95,850
|
|
|
—
|
|
|
1,088,400
|
|
Non-cash adjustments
to SPP NOI(3)
|
|
|
(11,200)
|
|
|
—
|
|
|
1,500
|
|
|
(250)
|
|
|
(900)
|
|
|
—
|
|
|
(10,850)
|
|
SPP cash
(adjusted) NOI
|
|
$
|
382,900
|
|
$
|
110,500
|
|
$
|
252,600
|
|
$
|
236,600
|
|
$
|
94,950
|
|
$
|
—
|
|
|
1,077,550
|
|
Addback
adjustments(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
663,950
|
|
Other income and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
253,000
|
|
Costs and
expenses(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,286,700)
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
707,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the projected
full year 2016 (high):
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
QCP
|
|
Total
|
|
NOI(2)
|
|
$
|
421,100
|
|
$
|
238,500
|
|
$
|
292,500
|
|
$
|
274,600
|
|
$
|
124,900
|
|
$
|
408,500
|
|
$
|
1,760,100
|
|
Non-SPP
NOI
|
|
|
(23,000)
|
|
|
(126,950)
|
|
|
(39,000)
|
|
|
(35,450)
|
|
|
(28,100)
|
|
|
(408,500)
|
|
|
(661,000)
|
|
SPP
NOI
|
|
|
398,100
|
|
|
111,550
|
|
|
253,500
|
|
|
239,150
|
|
|
96,800
|
|
|
—
|
|
|
1,099,100
|
|
Non-cash adjustments
to SPP NOI(3)
|
|
|
(11,400)
|
|
|
—
|
|
|
1,500
|
|
|
(250)
|
|
|
(900)
|
|
|
—
|
|
|
(11,050)
|
|
SPP cash
(adjusted) NOI
|
|
$
|
386,700
|
|
$
|
111,550
|
|
$
|
255,000
|
|
$
|
238,900
|
|
$
|
95,900
|
|
$
|
—
|
|
|
1,088,050
|
|
Addback
adjustments(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
672,050
|
|
Other income and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
257,200
|
|
Costs and
expenses(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,282,500)
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
734,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended
December 31, 2015:
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
QCP
|
|
Total
|
|
NOI(2)
|
|
$
|
424,841
|
|
$
|
178,706
|
|
$
|
278,261
|
|
$
|
254,555
|
|
$
|
119,474
|
|
$
|
598,254
|
|
$
|
1,854,091
|
|
Non-SPP
NOI
|
|
|
(31,890)
|
|
|
(72,191)
|
|
|
(36,106)
|
|
|
(20,774)
|
|
|
(24,941)
|
|
|
(598,254)
|
|
|
(784,156)
|
|
SPP
NOI
|
|
|
392,951
|
|
|
106,515
|
|
|
242,155
|
|
|
233,781
|
|
|
94,533
|
|
|
—
|
|
|
1,069,935
|
|
Non-cash adjustments
to SPP NOI(3)
|
|
|
(11,929)
|
|
|
—
|
|
|
(6,630)
|
|
|
(2,465)
|
|
|
(291)
|
|
|
—
|
|
|
(21,315)
|
|
SPP cash
(adjusted) NOI
|
|
$
|
381,022
|
|
$
|
106,515
|
|
$
|
235,525
|
|
$
|
231,316
|
|
$
|
94,242
|
|
$
|
—
|
|
|
1,048,620
|
|
Addback
adjustments(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
805,471
|
|
Other income and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162,951
|
|
Costs and
expenses(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,113,712)
|
|
Impairments,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,403,853)
|
|
Impairment of
investments in unconsolidated joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(45,895)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(546,418)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected SPP NOI
change for the full year 2016:
|
|
|
|
Senior Housing
Triple-net
|
|
|
SHOP
|
|
|
Life
Science
|
|
|
Medical
Office
|
|
|
Other
|
|
|
Total
|
|
Low
|
|
0.3%
|
|
|
3.75%
|
|
|
3.7%
|
|
|
1.3%
|
|
|
1.4%
|
|
|
1.7%
|
|
High
|
|
1.3%
|
|
|
4.75%
|
|
|
4.7%
|
|
|
2.3%
|
|
|
2.4%
|
|
|
2.7%
|
|
|
Projected SPP cash
(adjusted) NOI change for the full year 2016:
|
|
|
|
Senior Housing
Triple-net
|
|
|
SHOP
|
|
|
Life
Science
|
|
|
Medical
Office
|
|
|
Other
|
|
|
Total
|
|
Low
|
|
0.5%
|
|
|
3.75%
|
|
|
7.25%
|
|
|
2.3%
|
|
|
0.75%
|
|
|
2.75%
|
|
High
|
|
1.5%
|
|
|
4.75%
|
|
|
8.25%
|
|
|
3.3%
|
|
|
1.75%
|
|
|
3.75%
|
|
HCP,
Inc.
|
Projected SPP Cash
NOI and NOI(1)
|
Dollars in
thousands
|
(Unaudited)
|
|
For the projected
full year 2017 (low):
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
NOI(2)
|
|
$
|
310,600
|
|
$
|
240,500
|
|
$
|
268,500
|
|
$
|
281,400
|
|
$
|
131,700
|
|
$
|
1,232,700
|
|
Non-SPP
NOI
|
|
|
(18,200)
|
|
|
(50,600)
|
|
|
(37,300)
|
|
|
(25,300)
|
|
|
(20,450)
|
|
|
(151,850)
|
|
SPP
NOI
|
|
|
292,400
|
|
|
189,900
|
|
|
231,200
|
|
|
256,100
|
|
|
111,250
|
|
|
1,080,850
|
|
Non-cash adjustments
to SPP NOI(3)
|
|
|
650
|
|
|
—
|
|
|
6,200
|
|
|
(700)
|
|
|
(4,450)
|
|
|
1,700
|
|
SPP cash
(adjusted) NOI
|
|
$
|
293,050
|
|
$
|
189,900
|
|
$
|
237,400
|
|
$
|
255,400
|
|
$
|
106,800
|
|
|
1,082,550
|
|
Addback
adjustments(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,150
|
|
Other income and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220,500
|
|
Costs and
expenses(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(933,300)
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
519,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the projected
full year 2017 (high):
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
NOI(2)
|
|
$
|
314,800
|
|
$
|
242,900
|
|
$
|
271,400
|
|
$
|
284,100
|
|
$
|
132,900
|
|
$
|
1,246,100
|
|
Non-SPP
NOI
|
|
|
(19,550)
|
|
|
(51,200)
|
|
|
(37,900)
|
|
|
(25,400)
|
|
|
(20,550)
|
|
|
(154,600)
|
|
SPP
NOI
|
|
|
295,250
|
|
|
191,700
|
|
|
233,500
|
|
|
258,700
|
|
|
112,350
|
|
|
1,091,500
|
|
Non-cash adjustments
to SPP NOI(3)
|
|
|
650
|
|
|
—
|
|
|
6,200
|
|
|
(800)
|
|
|
(4,500)
|
|
|
1,550
|
|
SPP cash
(adjusted) NOI
|
|
$
|
295,900
|
|
$
|
191,700
|
|
$
|
239,700
|
|
$
|
257,900
|
|
$
|
107,850
|
|
|
1,093,050
|
|
Addback
adjustments(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
153,050
|
|
Other income and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
227,500
|
|
Costs and
expenses(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(926,300)
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
547,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the projected
mid-point full year 2016:
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
QCP
|
|
Total
|
|
NOI(2)
|
|
$
|
418,950
|
|
$
|
237,600
|
|
$
|
291,100
|
|
$
|
273,300
|
|
$
|
124,300
|
|
$
|
405,550
|
|
$
|
1,750,800
|
|
Non-SPP
NOI
|
|
|
(130,050)
|
|
|
(55,000)
|
|
|
(57,800)
|
|
|
(22,700)
|
|
|
(14,900)
|
|
|
(405,550)
|
|
|
(686,000)
|
|
SPP
NOI
|
|
|
288,900
|
|
|
182,600
|
|
|
233,300
|
|
|
250,600
|
|
|
109,400
|
|
|
—
|
|
|
1,064,800
|
|
Non-cash adjustments
to SPP NOI(3)
|
|
|
(5,100)
|
|
|
—
|
|
|
100
|
|
|
(200)
|
|
|
(3,400)
|
|
|
—
|
|
|
(8,600)
|
|
SPP cash
(adjusted) NOI
|
|
$
|
283,800
|
|
$
|
182,600
|
|
$
|
233,400
|
|
$
|
250,400
|
|
$
|
106,000
|
|
$
|
—
|
|
|
1,056,200
|
|
Addback
adjustments(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
694,600
|
|
Other income and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
255,100
|
|
Costs and
expenses(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,284,600)
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
721,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected SPP NOI
change for the full year 2017:
|
|
|
|
Senior Housing
Triple-net
|
|
|
SHOP
|
|
|
Life
Science
|
|
|
Medical
Office
|
|
|
Other
|
|
|
Total
|
|
Low
|
|
1.2%
|
|
|
4.0%
|
|
|
(0.9)%
|
|
|
2.2%
|
|
|
1.7%
|
|
|
1.5%
|
|
High
|
|
2.2%
|
|
|
5.0%
|
|
|
0.1%
|
|
|
3.2%
|
|
|
2.7%
|
|
|
2.5%
|
|
|
Projected SPP cash
(adjusted) NOI change for the full year 2017:
|
|
|
|
Senior Housing
Triple-net
|
|
|
SHOP
|
|
|
Life
Science
|
|
|
Medical
Office
|
|
|
Other
|
|
|
Total
|
|
Low
|
|
3.25%
|
|
|
4.0%
|
|
|
1.7%
|
|
|
2.0%
|
|
|
0.75%
|
|
|
2.5%
|
|
High
|
|
4.25%
|
|
|
5.0%
|
|
|
2.7%
|
|
|
3.0%
|
|
|
1.75%
|
|
|
3.5%
|
|
________________________________________
(1)
|
The foregoing
projections reflect management's view of current and future market
conditions, including assumptions with respect to rental rates,
occupancy levels, development items and the earnings impact of the
events referenced in this release. These projections do not reflect
the impact of unannounced future transactions, except as described
herein, other impairments or recoveries, the future bankruptcy or
insolvency of our operators, lessees, borrowers or other obligors,
the effect of any future restructuring of our contractual
relationships with such entities, gains or losses on marketable
securities, ineffectiveness related to our cash flow hedges, or
existing and future litigation matters including the possibility of
larger than expected litigation costs and related developments. Our
actual results may differ materially from the projections set forth
above. The aforementioned ranges represent management's best
estimates based upon the underlying assumptions as of the date of
this press release. Except as otherwise required by law, management
assumes no, and hereby disclaims any, obligation to update any of
the foregoing projections as a result of new information or new or
future developments.
|
(2)
|
Represents rental and
related revenues, tenant recoveries, resident fees and services,
and income from DFLs, less property level operating expenses,
including our share of unconsolidated joint ventures.
|
(3)
|
Represents
straight-line rents, DFL non-cash interest, amortization of market
lease intangibles, net and lease termination fees.
|
(4)
|
Represents non-SPP
NOI and non-cash adjustments to SPP NOI.
|
(5)
|
Represents interest
income, gain on sales of real estate, other income, net, income
taxes and equity income (loss) from unconsolidated joint ventures,
excluding NOI.
|
(6)
|
Represents interest
expense, depreciation and amortization, general and administrative
expenses, and acquisition and pursuit costs.
|
|
|
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SOURCE HCP