IRVINE, Calif., Aug. 2, 2018 /PRNewswire/ -- HCP, Inc.
(NYSE: HCP) today announced results for the second quarter
ended June 30, 2018. For the quarter, we generated net
income of $0.19 per share, FFO of
$0.45 per share and FFO as adjusted
of $0.47 per share.
QUARTERLY AND RECENT HIGHLIGHTS
– Entered into a $605
million joint venture with Morgan Stanley Real Estate
Investing on a two million square foot medical office portfolio
– Commenced $267
million of life science development projects, including
$160 million at Hayden Research
Campus in the Boston market and
$107 million at Phase IV of The Cove
in South San Francisco
– Generated $892
million of proceeds from asset sales, including: (i) a 51%
interest in our U.K. holdings; (ii) our remaining investment in the
RIDEA II senior housing joint venture ("RIDEA II"); and (iii)
five assets sold to Brookdale Senior Living, Inc. ("Brookdale")
– Under contract on the previously
announced disposition of 22 senior housing communities managed by
Brookdale to an investment fund
managed by affiliates of Apollo Global Management for $428
million
– Completed 28 senior housing operator
transitions from Brookdale to
date, including 20 to Atria, five to Sunrise, two to Eclipse and
one to Sonata
– Completed 324,000 square feet of
leasing at Phase III of The Cove, bringing Phase III to 100%
leased
– Repaid $700 million of our
5.375% senior notes due 2021 using proceeds from capital
recycling
– Appointed Katherine Sandstrom to the
Company's Board of Directors
– Named to the FTSE4Good sustainability
index for the seventh consecutive year
– Increased 2018 FFO as adjusted
guidance and reaffirmed full-year 2018 SPP Cash NOI guidance
ranges
|
Three Months Ended
June 30, 2018
|
|
Three Months Ended
June 30, 2017
|
|
|
(in thousands, except per share amounts)
|
Amount
|
|
Diluted
Per Share
|
|
Amount
|
|
Diluted
Per Share
|
|
Per Share
Change
|
Net income
(loss)
|
$
|
89,481
|
|
|
$
|
0.19
|
|
|
$
|
19,283
|
|
|
$
|
0.04
|
|
|
$
|
0.15
|
|
FFO
|
$
|
209,895
|
|
|
$
|
0.45
|
|
|
$
|
164,650
|
|
|
$
|
0.35
|
|
|
$
|
0.10
|
|
Transaction-related
items
|
1,993
|
|
|
—
|
|
|
840
|
|
|
—
|
|
|
—
|
|
Other impairments
(recoveries), net(1)
|
7,639
|
|
|
0.02
|
|
|
56,682
|
|
|
0.12
|
|
|
(0.10)
|
|
Litigation
costs
|
179
|
|
|
—
|
|
|
3,366
|
|
|
0.01
|
|
|
(0.01)
|
|
Foreign currency
remeasurement losses (gains)
|
(195)
|
|
|
—
|
|
|
(768)
|
|
|
—
|
|
|
—
|
|
FFO as
adjusted
|
$
|
219,511
|
|
|
$
|
0.47
|
|
|
$
|
224,770
|
|
|
$
|
0.48
|
|
|
$
|
(0.01)
|
|
FAD
|
$
|
190,103
|
|
|
|
|
$
|
200,157
|
|
|
|
|
|
_______________________________________
|
(1)
|
For the three months
ended June 30, 2018, represents the impairment of an undeveloped
life science land parcel classified as held for sale. For the three
months ended June 30, 2017, represents the impairment of our Tandem
Mezzanine Loan, which was sold in the first quarter of
2018.
|
FFO, FFO as adjusted, FAD, and SPP Cash NOI are supplemental
non-GAAP financial measures that we believe are useful in
evaluating the operating performance of real estate investment
trusts. See "June 30, 2018
Discussion and Reconciliation of Non-GAAP Financial Measures" for
definitions, discussions of their uses and inherent limitations,
and reconciliations to the most directly comparable financial
measures calculated and presented in accordance with GAAP on the
Investor Relations section of our website at
http://ir.hcpi.com/financial-reconciliation.
SAME PROPERTY PORTFOLIO OPERATING SUMMARY
The tables below outline the year-over-year three-month SPP Cash
NOI growth and the components of our senior housing operating
portfolio ("SHOP") SPP Cash NOI growth for the second quarter:
Year-Over-Year
Three-Month SPP Cash NOI Growth
|
Senior housing
triple-net
|
0.7%
|
SHOP
|
(4.4%)
|
Life
science
|
0.5%
|
Medical
office
|
2.5%
|
Other non-reportable
segments ("Other")
|
1.7%
|
Total
Portfolio
|
0.7%
|
Components of SHOP
SPP Cash NOI Growth
|
|
Core
Portfolio(1)
|
|
Transition/Sale
Portfolio(2)
|
|
Total
|
Property
count
|
33
|
|
22
|
|
55
|
SPP Cash NOI
Growth
|
2.9%
|
|
(15.3%)
|
|
(4.4%)
|
_______________________________________
|
(1)
|
Includes 17
properties managed by Brookdale and 16 properties managed by four
operators that are not expected to undergo a transition or sale
during 2018.
|
(2)
|
Represents properties
managed by Brookdale that have transitioned or are expected to
transition to new operators or sell in 2018.
|
HCP AND MORGAN STANLEY REAL ESTATE INVESTING EXPAND STRATEGIC
MEDICAL OFFICE JOINT VENTURE RELATIONSHIP
HCP entered into a definitive agreement to form a new
$605 million 51%/49% joint venture
(the "Venture") on a two million square foot medical office
portfolio with Morgan Stanley Real Estate Investing
("MSREI"). This will be the second medical office joint
venture between HCP and MSREI.
"We are excited to build on our successful relationship with
Morgan Stanley Real Estate Investing," said Scott Brinker, Executive Vice President and
Chief Investment Officer of HCP. "The Venture demonstrates
our ability to use strong relationships with capital partners,
owners, and health systems to source and structure creative
investments that are accretive to earnings and aligned with our
strategy of owning on-campus medical office properties affiliated
with leading health systems."
To form the Venture, MSREI will contribute cash and HCP will
contribute nine wholly-owned medical office buildings (the
"Contributed Assets"). The Contributed Assets are primarily
located in Texas and Florida, have a combined 1.2 million square
feet of leasable space and are 80% occupied. The Contributed
Assets are valued at approximately $320
million, representing a 4% disposition cap rate on a
trailing 12-month basis.
The Venture intends to use the cash contributed by MSREI to fund
the acquisition of a medical office portfolio (the "Portfolio") in
Greenville, South Carolina.
HCP's initial yield on the transaction is approximately 6%
inclusive of joint venture fees.
Excluding three small non-strategic assets the Venture expects
to immediately market for sale, the Portfolio consists of 13 assets
with a combined 832,000 square feet and is 95% on-campus. The
Portfolio is anchored by A-rated Greenville Health System ("GHS"),
which leases 94% of the square footage and is the largest health
system in South Carolina. The Venture has reached an
agreement with GHS to enter into new 10-year leases concurrent with
the closing of the acquisition, which is expected to occur in the
third quarter.
The Portfolio is accretive to a number of HCP's key portfolio
metrics including on-campus percentage, occupancy, rent per square
foot, and percentage of space leased to a health system. The
Portfolio acquisition and formation of the Venture are expected to
be immediately accretive to HCP's FFO and FAD.
The Venture between HCP and MSREI builds on a portfolio of
medical office buildings that was acquired in 2015 for $225 million. On a combined basis, the HCP
and MSREI relationship will span 3.2 million square feet of
leasable space across 33 properties.
TRANSACTION UPDATES
22-COMMUNITY PORTFOLIO SALE
As previously disclosed, HCP entered into definitive agreements
to sell a portfolio of 22 Brookdale-managed senior housing
communities to an investment fund managed by affiliates of Apollo
Global Management for $428 million. The transaction is
expected to close in two installments, with the first closing in
the third quarter and the second closing in the fourth quarter, as
regulatory license transfer approvals are granted.
U.K. PORTFOLIO TRANSACTION
In June, we closed on the previously announced joint venture
through which we sold a 51% interest in our U.K. holdings,
generating net proceeds of approximately $402 million, including $146 million of third party property-level
financing at our share. As part of the transaction, we expect
to sell our remaining 49% interest in the joint venture in
2019.
Additionally, we expect to sell an £11 million loan at par to a
separate buyer in the third quarter.
RIDEA II JOINT VENTURE SALE
As previously announced, in June we closed on the disposition of
our remaining investment in RIDEA II, generating $332
million of proceeds. At the time of the sale, the RIDEA
II joint venture owned 49 communities, of which 46 were managed
by Brookdale.
ADDITIONAL SIGNIFICANT DISPOSITION TRANSACTIONS
As previously announced, we sold five senior housing assets to
Brookdale for $243 million in April 2018. Additionally,
during the quarter, we sold five senior housing communities, four
of which were managed by Brookdale, to third parties for $61 million.
In June, we reached a definitive agreement to sell a parcel of
land in San Diego for $35 million and expect this transaction to close
by year end. The land parcel was originally acquired as part
of HCP's purchase of Slough Estates USA Inc. in August
2007.
In July, a tenant in our life science portfolio in South San Francisco exercised its purchase
option on four properties, generating proceeds of $269 million.
OPERATOR TRANSITION UPDATES
SUNRISE
We reached an agreement with Sunrise Senior Living, LLC
("Sunrise") to transition management on a portfolio of six
HCP-owned senior housing communities from Brookdale to Sunrise. To date, we have
completed five transitions and expect the remaining community to
transition in the third quarter.
ATRIA
To date, we have completed transitions of 20 HCP-owned senior
housing communities from Brookdale
to Atria Senior Living and expect to
transition the remaining properties in the third quarter.
ECLIPSE
In July, we completed transitions of two HCP-owned senior
housing communities from Brookdale
to Elmcroft by Eclipse Senior Living ("ESL") and expect to
transition one additional community to ESL in the third
quarter.
DEVELOPMENT UPDATES
HAYDEN CAMPUS EXPANSION
In June, we broke ground on 75 Hayden, a 214,000 square foot
Class A development at our Hayden Research Campus ("Hayden")
located in the Boston suburb of Lexington. The
$160 million campus expansion,
expected to stabilize in 2022, will capitalize on the strong demand
from tenants expanding from current locations in the Cambridge and suburban Boston submarkets. When complete, the
Hayden campus will encompass 600,000 square feet of
state-of-the-art Class A life science space.
PHASE III OF THE COVE 100% LEASED; COMMENCING PHASE IV
DEVELOPMENT
We have signed 324,000 square feet of leases at our $224 million Phase III development of The Cove in
South San Francisco. With Phase III 100% leased, we recently
commenced development on the 160,000 square foot, $107 million final phase of the project ("Phase
IV"). Upon Phase IV's completion in early 2020, The Cove will
be a one million square foot, LEED silver, fully-integrated,
waterfront life science campus located at the entrance to
South San Francisco's life
science cluster.
BALANCE SHEET
At June 30, 2018, we had
$1.5 billion of liquidity from a
combination of cash and availability under our $2.0 billion credit facility.
On July 16, 2018, we repaid
$700 million of our 5.375% senior
notes due 2021 using capital recycling proceeds received subsequent
to June 30. In connection with the repayment, we expect to
incur an extinguishment of debt charge of approximately $44
million in the third quarter.
BOARD OF DIRECTORS
HCP appointed Katherine Sandstrom as a new independent
director to its Board of Directors. Ms. Sandstrom's career
spanned over two decades at Heitman LLC, a real estate investment
management firm, where she held a series of senior leadership
positions. Most recently, she served as head of Heitman's
real estate securities business, overseeing more than $5 billion of assets invested through domestic
and global funds, as well as separately managed accounts.
Additionally, she led the firm's buy-side investment teams for REIT
securities strategies and assets held by institutional and private
wealth clients. Ms. Sandstrom continues to serve as an
advisor to Heitman's securities business leaders.
DIVIDEND
On July 26, 2018, our Board
declared a quarterly cash dividend of $0.37 per common share. The dividend will
be paid on August 21, 2018 to
stockholders of record as of the close of business on
August 6, 2018.
SUSTAINABILITY
For the seventh consecutive year, we were named as a constituent
to the FTSE4Good Index Series, an equity index series designed to
facilitate investment in companies that meet globally recognized
environmental, social and governance criteria. More
information about HCP's sustainability efforts, including a link to
our Sustainability Report, is available in the Sustainability
section which can be found on our website
at www.hcpi.com/sustainable-growth.
2018 GUIDANCE
For full-year 2018, we expect net income per share to range
between $0.79 and $0.85; FFO per
share to range between $1.65 and $1.69; and FFO as adjusted per share to range
between $1.79 and $1.83,
representing a $0.01 per share increase at the
mid-point. In addition, we expect 2018 SPP Cash NOI to
increase between 0.25% and 1.75%. These estimates do not
reflect the potential impact from unannounced future transactions
other than capital recycling activities. For additional detail and
information regarding these estimates, refer to the "Projected Full
Year 2018 SPP Cash NOI Growth" table below, the 2018 Guidance
section of our corresponding Supplemental Report and the Discussion
and Reconciliation of Non-GAAP Financial Measures, both available
in the Investor Relations section of our website
at http://ir.hcpi.com.
|
|
Projected Full Year
2018
SPP Cash NOI Growth
|
|
|
Low
|
|
High
|
Senior housing
triple-net
|
|
0.50%
|
|
1.50%
|
SHOP
|
|
(4.00%)
|
|
0.00%
|
Life
science
|
|
0.25%
|
|
1.25%
|
Medical
office
|
|
1.75%
|
|
2.75%
|
Other
|
|
0.50%
|
|
1.50%
|
Total Portfolio
SPP Growth
|
|
0.25%
|
|
1.75%
|
COMPANY INFORMATION
HCP has scheduled a conference call and webcast for Thursday, August 2, 2018, at 9:00 a.m.
Pacific Time (12:00 p.m. Eastern Time) to present its
performance and operating results for the quarter ended
June 30, 2018. The conference call is accessible by
dialing (888) 317-6003 (U.S.) or (412) 317-6061
(International). The conference ID number is 6277849.
You may also access the conference call via webcast in the Investor
Relations section of our website at http://ir.hcpi.com.
Through August 17, 2018, 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
10121778. Our Supplemental Report for the current period is
also available, with this earnings release, in the Investor
Relations section of our website.
ABOUT HCP
HCP, Inc. is a fully integrated real estate investment trust
(REIT) that invests in real estate serving the healthcare industry
in the United States.
HCP owns a large-scale portfolio primarily diversified across
life science, medical office and senior housing. 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
Statements in this release that 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.
Forward-looking statements include, among other things, statements
regarding our and our officers' intent, belief or expectation as
identified by the use of words such as "may," "will," "project,"
"expect," "believe," "intend," "anticipate," "seek," "forecast,"
"plan," "potential," "estimate," "could," "would," "should" and
other comparable and derivative terms or the negatives
thereof. Examples of forward-looking statements include,
among other things, (i) all statements under the heading "2018
Guidance," including without limitation with respect to expected
net income, FFO per share, FFO as adjusted per share, SPP Cash NOI
and other financial projections and assumptions, including those in
the "Projected Full Year 2018 SPP Cash NOI Growth" table in this
release, as well as comparable statements included in other
sections of this release; (ii) statements regarding the
payment of a quarterly cash dividend; and (iii) statements
regarding timing, outcomes and other details relating to current,
pending or contemplated acquisitions, dispositions, transitions,
developments, redevelopments, joint venture transactions, capital
recycling and financing activities, and other transactions
discussed in this release, including without limitation those
described under the headings "HCP and Morgan Stanley Real Estate
Investing Expand Strategic Medical Office Joint Venture
Relationship", "Transaction Updates", "Operator Transition Update",
"Development Updates" and "Balance Sheet." Forward-looking
statements reflect our current expectations and views about future
events and are subject to risks and uncertainties that could
significantly affect our future financial condition and results of
operations. While forward-looking statements reflect our good
faith belief and assumptions we believe to be reasonable based upon
current information, we can give no assurance that our expectations
or forecasts will be attained. Further, we cannot guarantee
the accuracy of any such forward-looking statement contained in
this release, and such forward-looking statements are subject to
known and unknown risks and uncertainties that are difficult to
predict. 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 percentage of our revenues;
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 the
acquisition and financing of suitable healthcare properties as well
as competition for tenants and operators, including with respect to
new leases and mortgages and the renewal or rollover of existing
leases; our concentration in the healthcare property sector,
particularly in senior housing, life sciences and medical office
buildings, which makes our profitability more vulnerable to a
downturn in a specific sector than if we were investing in multiple
industries; our ability to identify replacement tenants and
operators and the potential renovation costs and regulatory
approvals associated therewith; the risks associated with property
development and redevelopment, including costs above original
estimates, project delays and lower occupancy rates and rents than
expected; 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 acquisitions and other investments,
including those 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; operational risks associated with third party
management contracts, including the additional regulation and
liabilities of our RIDEA lease structures; the effect on us and our
tenants and operators of legislation, executive orders and other
legal requirements, including compliance with the Americans with
Disabilities Act, fire, safety and health regulations,
environmental laws, the Affordable Care Act, 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
or fines for noncompliance; 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; our
ability to foreclose on collateral securing our real estate-related
loans; 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 or other conditions, including currency exchange rates;
our ability to manage our indebtedness level and changes in the
terms of such indebtedness; competition for skilled management and
other key personnel; the potential impact of uninsured or
underinsured losses; our reliance on information technology systems
and the potential impact of system failures, disruptions or
breaches; the ability to maintain our qualification as a real
estate investment trust; and other risks and uncertainties
described from time to time in our Securities and Exchange
Commission filings. Except as required by law, we do not
undertake, and hereby disclaim, any obligation to update any
forward-looking statements, which speak only as of the date on
which they are made.
CONTACT
Andrew Johns
Vice President – Finance and Investor Relations
949-407-0400
HCP, Inc.
|
Consolidated
Balance Sheets
|
In thousands,
except share and per share data
|
(unaudited)
|
|
|
June 30,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
Real
estate:
|
|
|
|
Buildings and
improvements
|
$
|
10,683,541
|
|
|
$
|
11,239,732
|
|
Development costs and
construction in progress
|
373,818
|
|
|
447,976
|
|
Land
|
1,655,012
|
|
|
1,785,865
|
|
Accumulated
depreciation and amortization
|
(2,750,351)
|
|
|
(2,741,695)
|
|
Net real
estate
|
9,962,020
|
|
|
10,731,878
|
|
Net investment in
direct financing leases
|
712,570
|
|
|
714,352
|
|
Loans receivable,
net
|
38,691
|
|
|
313,326
|
|
Investments in and
advances to unconsolidated joint ventures
|
628,607
|
|
|
800,840
|
|
Accounts receivable,
net of allowance of $4,755 and $4,425, respectively
|
43,965
|
|
|
40,733
|
|
Cash and cash
equivalents
|
91,381
|
|
|
55,306
|
|
Restricted
cash
|
30,548
|
|
|
26,897
|
|
Intangible assets,
net
|
294,056
|
|
|
410,082
|
|
Assets held for sale,
net
|
692,702
|
|
|
417,014
|
|
Proceeds receivable
from U.K. JV transaction
|
402,447
|
|
|
—
|
|
Other assets,
net
|
554,400
|
|
|
578,033
|
|
Total
assets
|
$
|
13,451,387
|
|
|
$
|
14,088,461
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Bank line of
credit
|
$
|
545,226
|
|
|
$
|
1,017,076
|
|
Term loan
|
222,923
|
|
|
228,288
|
|
Senior unsecured
notes
|
6,401,502
|
|
|
6,396,451
|
|
Mortgage
debt
|
140,321
|
|
|
144,486
|
|
Other debt
|
93,070
|
|
|
94,165
|
|
Intangible
liabilities, net
|
49,976
|
|
|
52,579
|
|
Liabilities of assets
held for sale, net
|
10,357
|
|
|
14,031
|
|
Accounts payable and
accrued liabilities
|
398,920
|
|
|
401,738
|
|
Deferred
revenue
|
172,369
|
|
|
144,709
|
|
Total
liabilities
|
8,034,664
|
|
|
8,493,523
|
|
Commitments and
contingencies
|
|
|
|
Common stock, $1.00
par value: 750,000,000 shares authorized; 469,829,639 and
469,435,678 shares issued and outstanding, respectively
|
469,830
|
|
|
469,436
|
|
Additional paid-in
capital
|
8,187,385
|
|
|
8,226,113
|
|
Cumulative dividends
in excess of earnings
|
(3,509,641)
|
|
|
(3,370,520)
|
|
Accumulated other
comprehensive income (loss)
|
(4,080)
|
|
|
(24,024)
|
|
Total stockholders'
equity
|
5,143,494
|
|
|
5,301,005
|
|
|
|
|
|
Joint venture
partners
|
96,341
|
|
|
117,045
|
|
Non-managing member
unitholders
|
176,888
|
|
|
176,888
|
|
Total noncontrolling
interests
|
273,229
|
|
|
293,933
|
|
Total
equity
|
5,416,723
|
|
|
5,594,938
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
13,451,387
|
|
|
$
|
14,088,461
|
|
HCP, Inc.
|
Consolidated
Statements of Operations
|
In thousands,
except per share data
|
(unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Rental and related
revenues
|
$
|
279,056
|
|
|
$
|
263,820
|
|
|
$
|
558,634
|
|
|
$
|
550,038
|
|
Tenant
recoveries
|
38,784
|
|
|
35,259
|
|
|
75,958
|
|
|
68,934
|
|
Resident fees and
services
|
136,774
|
|
|
125,416
|
|
|
279,588
|
|
|
265,648
|
|
Income from direct
financing leases
|
13,490
|
|
|
13,564
|
|
|
26,756
|
|
|
27,276
|
|
Interest
income
|
1,447
|
|
|
20,869
|
|
|
7,812
|
|
|
39,200
|
|
Total
revenues
|
469,551
|
|
|
458,928
|
|
|
948,748
|
|
|
951,096
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Interest
expense
|
73,038
|
|
|
77,788
|
|
|
148,140
|
|
|
164,506
|
|
Depreciation and
amortization
|
143,292
|
|
|
130,751
|
|
|
286,542
|
|
|
267,305
|
|
Operating
|
173,866
|
|
|
153,163
|
|
|
346,418
|
|
|
312,244
|
|
General and
administrative
|
22,514
|
|
|
21,286
|
|
|
51,689
|
|
|
43,764
|
|
Transaction
costs
|
2,404
|
|
|
867
|
|
|
4,599
|
|
|
1,924
|
|
Impairments
(recoveries), net
|
13,912
|
|
|
56,682
|
|
|
13,912
|
|
|
56,682
|
|
Total costs and
expenses
|
429,026
|
|
|
440,537
|
|
|
851,300
|
|
|
846,425
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Gain (loss) on sales
of real estate, net
|
46,064
|
|
|
412
|
|
|
66,879
|
|
|
317,670
|
|
Other income
(expense), net
|
1,786
|
|
|
71
|
|
|
(38,621)
|
|
|
51,279
|
|
Total other income
(expense), net
|
47,850
|
|
|
483
|
|
|
28,258
|
|
|
368,949
|
|
Income (loss)
before income taxes and equity income (loss) from unconsolidated
joint ventures
|
88,375
|
|
|
18,874
|
|
|
125,706
|
|
|
473,620
|
|
Income tax benefit
(expense)
|
4,654
|
|
|
2,987
|
|
|
9,990
|
|
|
9,149
|
|
Equity income (loss)
from unconsolidated joint ventures
|
(101)
|
|
|
240
|
|
|
469
|
|
|
3,509
|
|
Net income
(loss)
|
92,928
|
|
|
22,101
|
|
|
136,165
|
|
|
486,278
|
|
Noncontrolling
interests' share in earnings
|
(2,986)
|
|
|
(2,718)
|
|
|
(5,991)
|
|
|
(5,750)
|
|
Net income (loss)
attributable to HCP, Inc.
|
89,942
|
|
|
19,383
|
|
|
130,174
|
|
|
480,528
|
|
Participating
securities' share in earnings
|
(461)
|
|
|
(100)
|
|
|
(852)
|
|
|
(674)
|
|
Net income (loss)
applicable to common shares
|
$
|
89,481
|
|
|
$
|
19,283
|
|
|
$
|
129,322
|
|
|
$
|
479,854
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.19
|
|
|
$
|
0.04
|
|
|
$
|
0.28
|
|
|
$
|
1.02
|
|
Diluted
|
$
|
0.19
|
|
|
$
|
0.04
|
|
|
$
|
0.28
|
|
|
$
|
1.02
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
469,769
|
|
|
468,646
|
|
|
469,664
|
|
|
468,474
|
|
Diluted
|
469,941
|
|
|
468,839
|
|
|
469,799
|
|
|
473,366
|
|
HCP, Inc.
|
Funds From
Operations
|
In thousands,
except per share data
|
(unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss)
applicable to common shares
|
|
$
|
89,481
|
|
|
$
|
19,283
|
|
|
$
|
129,322
|
|
|
$
|
479,854
|
|
Real estate related
depreciation and amortization
|
|
143,292
|
|
|
130,751
|
|
|
286,542
|
|
|
267,305
|
|
Real estate related
depreciation and amortization on unconsolidated joint
ventures
|
|
16,162
|
|
|
16,314
|
|
|
33,550
|
|
|
31,353
|
|
Real estate related
depreciation and amortization on noncontrolling interests and
other
|
|
(1,664)
|
|
|
(3,634)
|
|
|
(4,207)
|
|
|
(7,820)
|
|
Other depreciation
and amortization
|
|
1,268
|
|
|
2,347
|
|
|
2,563
|
|
|
5,358
|
|
Loss (gain) on sales
of real estate, net
|
|
(46,064)
|
|
|
(412)
|
|
|
(66,879)
|
|
|
(317,670)
|
|
Loss (gain) upon
consolidation of real estate, net(1)
|
|
—
|
|
|
—
|
|
|
41,017
|
|
|
—
|
|
Taxes associated with
real estate dispositions(2)
|
|
1,147
|
|
|
1
|
|
|
1,147
|
|
|
(5,498)
|
|
Impairments
(recoveries) of depreciable real estate,
net(3)
|
|
6,273
|
|
|
—
|
|
|
6,273
|
|
|
—
|
|
FFO applicable to
common shares
|
|
209,895
|
|
|
164,650
|
|
|
429,328
|
|
|
452,882
|
|
Distributions on
dilutive convertible units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,654
|
|
Diluted FFO
applicable to common shares
|
|
$
|
209,895
|
|
|
$
|
164,650
|
|
|
$
|
429,328
|
|
|
$
|
456,536
|
|
Diluted FFO per
common share
|
|
$
|
0.45
|
|
|
$
|
0.35
|
|
|
$
|
0.91
|
|
|
$
|
0.96
|
|
Weighted average
shares outstanding - diluted FFO
|
|
469,941
|
|
|
468,839
|
|
|
469,799
|
|
|
473,366
|
|
Impact of adjustments
to FFO:
|
|
|
|
|
|
|
|
|
Transaction-related
items
|
|
$
|
1,993
|
|
|
$
|
840
|
|
|
$
|
3,934
|
|
|
$
|
1,896
|
|
Other impairments
(recoveries), net(4)
|
|
7,639
|
|
|
56,682
|
|
|
4,341
|
|
|
5,787
|
|
Severance and related
charges(5)
|
|
—
|
|
|
—
|
|
|
8,738
|
|
|
—
|
|
Litigation
costs
|
|
179
|
|
|
3,366
|
|
|
585
|
|
|
5,205
|
|
Foreign currency
remeasurement losses (gains)
|
|
(195)
|
|
|
(768)
|
|
|
(65)
|
|
|
(845)
|
|
Total
adjustments
|
|
9,616
|
|
|
60,120
|
|
|
17,533
|
|
|
12,043
|
|
FFO as adjusted
applicable to common shares
|
|
219,511
|
|
|
224,770
|
|
|
446,861
|
|
|
464,925
|
|
Distributions on
dilutive convertible units and other
|
|
(28)
|
|
|
1,738
|
|
|
(45)
|
|
|
3,632
|
|
Diluted FFO as
adjusted applicable to common shares
|
|
$
|
219,483
|
|
|
$
|
226,508
|
|
|
$
|
446,816
|
|
|
$
|
468,557
|
|
Diluted FFO as
adjusted per common share
|
|
$
|
0.47
|
|
|
$
|
0.48
|
|
|
$
|
0.95
|
|
|
$
|
0.99
|
|
Weighted average
shares outstanding - diluted FFO as adjusted
|
|
469,941
|
|
|
473,528
|
|
|
469,799
|
|
|
473,366
|
|
_______________________________________
|
(1)
|
For the six months
ended June 30, 2018, represents the loss on consolidation of seven
U.K. care homes.
|
(2)
|
Represents the income
tax impact of our RIDEA II transactions in June 2018 and January
2017.
|
(3)
|
For the three and six
months ended June 30, 2018, represents the impairment of two
underperforming SHOP portfolios classified as held for sale (13
total assets).
|
(4)
|
For the three months
ended June 30, 2018, represents the impairment of an undeveloped
life science land parcel classified as held for sale. For the three
months ended June 30, 2017, represents the impairment of our Tandem
Mezzanine Loan, which was sold in the first quarter of 2018.
For the six months ended June 30, 2018, represents the impairment
of an undeveloped life science land parcel classified as held for
sale, partially offset by an impairment recovery upon the sale of
our Tandem Mezzanine Loan in March 2018. For the six months ended
June 30, 2017, represents the impairment of our Tandem Mezzanine
Loan, net of the impairment recovery upon the sale of our Four
Seasons Notes in the first quarter of 2017.
|
(5)
|
For the six months
ended June 30, 2018, relates to the departure of our former
Executive Chairman, including $6 million of cash severance and $3
million of equity award vestings.
|
HCP, Inc.
|
Funds Available
for Distribution
|
In
thousands
|
(unaudited)
|
|
|
Three Months
Ended June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
FFO as adjusted
applicable to common shares
|
$
|
219,511
|
|
|
$
|
224,770
|
|
|
$
|
446,861
|
|
|
$
|
464,925
|
|
Amortization of
deferred compensation(1)
|
4,299
|
|
|
3,327
|
|
|
7,719
|
|
|
7,092
|
|
Amortization of
deferred financing costs
|
3,355
|
|
|
3,843
|
|
|
6,690
|
|
|
7,702
|
|
Straight-line
rents
|
(5,793)
|
|
|
(4,882)
|
|
|
(16,479)
|
|
|
(12,278)
|
|
FAD capital
expenditures
|
(26,346)
|
|
|
(25,477)
|
|
|
(45,592)
|
|
|
(47,554)
|
|
Lease restructure
payments
|
303
|
|
|
314
|
|
|
601
|
|
|
854
|
|
CCRC entrance
fees(2)
|
3,652
|
|
|
4,713
|
|
|
6,679
|
|
|
8,362
|
|
Deferred income
taxes
|
(5,731)
|
|
|
(4,342)
|
|
|
(7,871)
|
|
|
(6,716)
|
|
Other FAD
adjustments(3)
|
(3,147)
|
|
|
(2,109)
|
|
|
(6,774)
|
|
|
(3,685)
|
|
FAD applicable to
common shares
|
190,103
|
|
|
200,157
|
|
|
391,834
|
|
|
418,702
|
|
Distributions on
dilutive convertible units
|
—
|
|
|
1,738
|
|
|
—
|
|
|
—
|
|
Diluted FAD
applicable to common shares
|
$
|
190,103
|
|
|
$
|
201,895
|
|
|
$
|
391,834
|
|
|
$
|
418,702
|
|
Weighted average
shares outstanding - diluted FAD
|
469,941
|
|
|
473,528
|
|
|
469,799
|
|
|
468,669
|
|
_______________________________________
|
(1)
|
Excludes $3 million
related to the acceleration of deferred compensation for restricted
stock units that vested upon the departure of our former Executive
Chairman, which is included in severance and related charges for
the six months ended June 30, 2018.
|
(2)
|
Represents our 49%
share of non-refundable entrance fees as the fees are collected by
our CCRC JV, net of reserves and CCRC JV entrance fee amortization.
|
(3)
|
Primarily includes
our share of FAD capital expenditures from unconsolidated joint
ventures.
|
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SOURCE HCP, Inc.