IRVINE, Calif., May 2, 2017 /PRNewswire/ --
FIRST QUARTER 2017 AND RECENT HIGHLIGHTS
-- EPS, FFO and FFO as adjusted per share,
were $0.97, $0.61 and $0.51,
respectively
-- Year-over-year three-month SPP Cash NOI
growth of 4.0%
-- Completed the previously announced sale of 64
triple-net assets leased to Brookdale Senior Living, Inc.
("Brookdale") and the sale and
related financing of a 40% interest in our RIDEA II senior housing
joint venture generating combined proceeds of $1.6 billion
-- Repaid $1.1
billion of our debt during the quarter and remain on track
to meet our previously disclosed balance sheet targets
-- Sold our debt investments in Four Seasons
generating proceeds of $136
million
-- Signed a 67,000 square foot lease at Phase
I of The Cove life science development in South San Francisco, CA, bringing Phases I and
II to 100% leased
-- Peter Scott
joined HCP as EVP and Chief Financial Officer
-- Announced Justin Hutchens to leave the
company to become CEO of U.K.-based operator HC-One
-- Reaffirmed full-year 2017 FFO as adjusted
and SPP Cash NOI guidance ranges
IRVINE, CA, May 2, 2017 -- HCP (NYSE:HCP) announced results
for the quarter ended March 31, 2017.
|
Three Months
Ended
March 31,
2017
|
|
Three Months
Ended
March 31,
2016
|
|
Per Share
|
|
|
(in thousands,
except per share amounts)
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
|
Change
|
|
|
Net
income
|
$
|
460,375
|
|
$
|
0.97
|
|
$
|
115,762
|
|
$
|
0.25
|
|
$
|
0.72
|
|
|
FFO
|
$
|
288,249
|
|
$
|
0.61
|
|
$
|
319,266
|
|
$
|
0.68
|
|
$
|
(0.07)
|
|
|
Other
impairment recovery(1)
|
|
(50,895)
|
|
|
(0.10)
|
|
|
—
|
|
|
—
|
|
|
(0.10)
|
|
|
Transaction-related items
|
|
1,057
|
|
|
—
|
|
|
2,518
|
|
|
0.01
|
|
|
(0.01)
|
|
|
Other(2)
|
|
1,761
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
FFO as
adjusted
|
$
|
240,172
|
|
$
|
0.51
|
|
$
|
321,784
|
|
$
|
0.69
|
|
$
|
(0.18)
|
|
|
FFO as
adjusted from QCP
|
|
—
|
|
|
—
|
|
|
(98,207)
|
|
|
(0.21)
|
|
|
0.21
|
|
|
Comparable FFO as
adjusted(3)
|
$
|
240,172
|
|
$
|
0.51
|
|
$
|
223,577
|
|
$
|
0.48
|
|
$
|
0.03
|
|
|
FAD
|
$
|
218,555
|
|
|
|
|
$
|
309,038
|
|
|
|
|
|
|
|
________________________________________
|
|
|
(1)
|
Relates to the sale
of our Four Seasons senior notes ("Four Seasons Notes").
|
|
(2)
|
Includes: (i) $1.8
million of litigation provision and (ii) $0.1 million of foreign
currency remeasurement gains.
|
|
(3)
|
Represents FFO as
adjusted excluding FFO as adjusted from Quality Care Properties,
Inc. ("QCP") and interest expense related to debt repaid using
proceeds from the spin-off, assuming these transactions occurred at
the beginning of the earliest period presented. Comparable FFO as
adjusted allows management to evaluate the performance of our
remaining real estate portfolio following the completion of the QCP
spin-off.
|
In addition to the items discussed above, first quarter 2017 net
income included net gain on sales of real estate of $0.67 per share.
FFO, FFO as adjusted, FAD, Comparable FFO as adjusted, SPP Cash
NOI and SPP NOI are supplemental non-GAAP financial measures that
we believe are useful in evaluating the operating performance of
real estate investment trusts. See "Discussion and Reconciliation
of Non-GAAP Financial Measures" for the quarter ended March 31, 2017 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 table below outlines the three-month same-property portfolio
operating results for the first quarter:
|
Year-Over-Year
|
|
|
Occupancy
|
|
SPP Growth
|
|
|
1Q17
|
|
1Q16
|
|
NOI
|
|
Cash NOI
|
|
|
Senior housing
triple-net ("SH NNN")
|
86.5%
|
|
87.0%
|
|
0.7%
|
|
5.1%
|
|
|
Senior housing
operating ("SHOP")
|
88.1%
|
|
89.4%
|
|
2.9%
|
|
2.9%
|
|
|
Life
science
|
97.3%
|
|
97.8%
|
|
4.0%
|
|
4.7%
|
|
|
Medical
office
|
92.3%
|
|
92.0%
|
|
3.2%
|
|
4.4%
|
|
|
Other non-reportable
segments ("Other")(1)
|
N/A
|
|
N/A
|
|
2.1%
|
|
0.5%
|
|
|
Total
Portfolio
|
|
|
|
|
2.6%
|
|
4.0%
|
|
________________________________________
|
|
|
(1)
|
Other primarily
includes our hospitals and U.K. real estate investments. See our
Supplemental Report for additional details.
|
BROOKDALE TRANSACTIONS, FOUR
SEASONS DEBT INVESTMENT SALE, AND OTHER DISPOSITIONS
BROOKDALE ASSET SALES &
TRANSITIONS
On March 29, 2017, we completed
the sale of a portfolio of 64 triple-net assets leased to
Brookdale at the previously
announced aggregate sales price of $1.125
billion. Proceeds from the transaction were used to repay
debt and for general corporate purposes.
In January, we completed the previously announced sale of a 40%
interest in our RIDEA II senior housing joint venture and the
related financing of the venture, generating $480 million of proceeds, which were used to pay
down our revolving credit facility.
We continue to market an additional 25 communities triple-net
leased to Brookdale and expect to
sell or transition these assets during the remainder of
2017.
Combined, these transactions reduce Brookdale concentration while improving lease
coverage and strengthening our balance sheet and credit
profile.
FOUR SEASONS DEBT INVESTMENT SALE
In March, we sold our Four Seasons Notes for £83 million
($101 million), which generated a £42
million ($51 million) recovery of impairment as the sales
price was above the carrying value of £41 million ($50 million).
In March, we also sold our Four Seasons senior secured term loan
at its par value plus accrued interest for £29 million
($35 million).
Combined, the two dispositions generated cash proceeds of £112
million ($136 million) which were
used to repay GBP-denominated debt.
OTHER DISPOSITIONS
During the first quarter, we completed $121 million of additional dispositions.
Significant transactions in the quarter included:
- As previously disclosed, in January
2017, we sold four life science facilities in Salt Lake City, Utah for $76 million to the current tenant.
- In March, we sold a hospital in Palm
Beach Gardens, Florida for $43
million to the current tenant.
- Subsequent to the first quarter, we sold a land parcel in
San Diego, California for
$27 million.
THE COVE AT OYSTER POINT
During the first quarter, we signed a 10-year lease with Global
Blood Therapeutics, Inc., a biotechnology company, for 67,000
square feet at Phase I of The Cove. The lease is projected to
commence in December 2017 and brings
Phases I and II of The Cove to 100% leased.
Construction has commenced on the $211
million development of Phase III of The Cove, which adds two
Class A buildings representing up to 336,000 square feet, with an
expected delivery by the fourth quarter of 2018. 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.
BALANCE SHEET
We repaid $1.1 billion of debt
during the first quarter using proceeds generated from the
Brookdale transactions and other
dispositions. We remain on track with our previously disclosed
deleveraging plan and continue to target net debt to EBITDA in the
low-to-mid six-times range with a target financial leverage in the
43% to 44% range by the end of 2017.
As of March 31, 2017, we had
$2.3 billion of liquidity from a
combination of cash and availability under our $2.0 billion credit facility.
We repaid $131 million on our
credit facility in early April and $250
million of senior notes on May
1. We currently have no major senior note or secured debt
maturities until early 2019.
EXECUTIVE LEADERSHIP
In February, Peter Scott joined
the company as Executive Vice President and Chief Financial
Officer. Mr. Scott joined HCP following a 15-year career in real
estate investment banking.
On April 3, 2017, we announced
that our President, Justin Hutchens,
will leave HCP to become the Chief Executive Officer of HC-One, one
of the largest care home providers in the United Kingdom. Mr. Hutchens will remain in
his current role at HCP through June
1st to ensure a smooth transition of his duties. We have
initiated the process of recruiting a new Chief Investment
Officer.
DIVIDEND
On April 27, 2017, our Board
declared a quarterly cash dividend of $0.37 per common share. The dividend will be paid
on May 23, 2017 to stockholders of
record as of the close of business on May 8, 2017.
SUSTAINABILITY
In April, we published our 6th annual Corporate
Sustainability Report highlighting the environmental, social, and
governance aspects of our operations. More information about HCP's
sustainability efforts can be found on our website at
www.hcpi.com/sustainability.
OUTLOOK
For full year 2017, we expect: EPS to range between $1.43 and $1.49; FFO per share to range between
$1.99 and $2.05; and FFO as adjusted
per share to range between $1.89 and
$1.95. In addition, we expect 2017 SPP Cash NOI to increase
between 2.5% and 3.5%. 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 SPP Cash NOI"
section of this release, and the 2017 Guidance section of our
corresponding Supplemental Report, available in the Investor
Relations section of our website at http://ir.hcpi.com.
|
Projected Full Year
2017
SPP NOI
|
|
Projected Full Year
2017
SPP Cash NOI
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Senior housing
triple-net
|
1.1%
|
|
2.1%
|
|
3.9%
|
|
4.9%
|
|
Senior housing
operating
|
2.0%
|
|
3.0%
|
|
2.0%
|
|
3.0%
|
|
Life
science
|
0.4%
|
|
1.4%
|
|
2.5%
|
|
3.5%
|
|
Medical
office
|
1.3%
|
|
2.3%
|
|
2.0%
|
|
3.0%
|
|
Other(1)
|
1.8%
|
|
2.8%
|
|
0.8%
|
|
1.8%
|
|
SPP
growth
|
1.2%
|
|
2.2%
|
|
2.5%
|
|
3.5%
|
________________________________________
|
|
|
(1)
|
Other primarily
includes our hospitals and U.K. real estate investments. See our
Supplemental Report for additional details.
|
COMPANY INFORMATION
HCP has scheduled a conference call and webcast for Tuesday, May 2, 2017 at 9:00 a.m. Pacific
Time (12:00 p.m. Eastern Time) to present its performance and
operating results for the quarter ended March 31, 2017. The conference call is accessible
by dialing (888) 317-6003 (U.S.) or (412) 317-6061 (International).
The conference ID number is 6517031. 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 May 17, 2017, 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
10104309. Our Supplemental Report for the current period is
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, Comparable FFO per share, SPP NOI, SPP Cash NOI
and other financial projections and assumptions, including
those in the "Projected SPP NOI and Cash NOI" sections of 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, developments, joint
venture transactions, capital recycling and financing activities,
and other transactions discussed in this release, including without
limitation those described under the heading "The Cove at Oyster
Point." 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 our and our 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 percentage 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; our concentration in the healthcare property
sector, particularly in life sciences, medical office buildings and
hospitals, which makes our profitability more vulnerable to a
downturn in a specific sector than if we were investing in multiple
industries; availability of suitable properties to acquire at
favorable prices, the competition for the acquisition and financing
of those properties, and the costs of associated property
development; 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 foreclose on loan collateral or 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 acquisitions
and other investments, including those discussed above, within
expected time frames or at all, or within expected cost
projections; operational risks associated with third party
management contracts, including the additional regulation and
liabilities of our RIDEA lease structures; 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, executive orders and other legal requirements,
including the Affordable Care Act and licensure, certification and
inspection requirements, as well as 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 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
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. You should
not place undue reliance on any forward-looking statements. We
assume no, and hereby disclaim 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
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)
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
|
Assets
|
|
|
|
|
|
|
Real
estate:
|
|
|
|
|
|
|
|
|
Buildings and
improvements
|
|
$
|
11,008,771
|
|
$
|
11,692,654
|
|
|
Development costs and
construction in progress
|
|
|
430,007
|
|
|
400,619
|
|
|
Land
|
|
|
1,772,174
|
|
|
1,881,487
|
|
|
Accumulated
depreciation and amortization
|
|
|
(2,577,248)
|
|
|
(2,648,930)
|
|
|
Net real
estate
|
|
|
10,633,704
|
|
|
11,325,830
|
|
|
|
|
|
|
|
|
|
|
Net investment in
direct financing leases ("DFLs")
|
|
|
712,540
|
|
|
752,589
|
|
|
Loans receivable,
net
|
|
|
788,486
|
|
|
807,954
|
|
|
Investments in and
advances to unconsolidated joint ventures
|
|
|
827,202
|
|
|
571,491
|
|
|
Accounts receivable,
net of allowance of $3,941 and $4,459, respectively
|
|
|
31,500
|
|
|
45,116
|
|
|
Cash and cash
equivalents
|
|
|
764,114
|
|
|
94,730
|
|
|
Restricted
cash
|
|
|
60,806
|
|
|
42,260
|
|
|
Intangible assets,
net
|
|
|
432,109
|
|
|
479,805
|
|
|
Assets held for sale,
net
|
|
|
—
|
|
|
927,866
|
|
|
Other assets,
net
|
|
|
605,407
|
|
|
711,624
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
14,855,868
|
|
$
|
15,759,265
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Bank line of
credit
|
|
$
|
492,421
|
|
$
|
899,718
|
|
|
Term loans
|
|
|
274,103
|
|
|
440,062
|
|
|
Senior unsecured
notes
|
|
|
7,136,336
|
|
|
7,133,538
|
|
|
Mortgage
debt
|
|
|
147,329
|
|
|
623,792
|
|
|
Other debt
|
|
|
91,263
|
|
|
92,385
|
|
|
Intangible
liabilities, net
|
|
|
54,472
|
|
|
58,145
|
|
|
Liabilities of assets
held for sale, net
|
|
|
—
|
|
|
3,776
|
|
|
Accounts payable and
accrued liabilities
|
|
|
344,908
|
|
|
417,360
|
|
|
Deferred
revenue
|
|
|
141,561
|
|
|
149,181
|
|
|
Total
liabilities
|
|
|
8,682,393
|
|
|
9,817,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $1.00
par value: 750,000,000 shares authorized; 468,446,208 and
468,081,489 shares issued and outstanding, respectively
|
|
|
468,446
|
|
|
468,081
|
|
|
Additional paid-in
capital
|
|
|
8,203,778
|
|
|
8,198,890
|
|
|
Cumulative dividends
in excess of earnings
|
|
|
(2,802,218)
|
|
|
(3,089,734)
|
|
|
Accumulated other
comprehensive loss
|
|
|
(28,658)
|
|
|
(29,642)
|
|
|
Total stockholders'
equity
|
|
|
5,841,348
|
|
|
5,547,595
|
|
|
|
|
|
|
|
|
|
|
Joint venture
partners
|
|
|
154,161
|
|
|
214,377
|
|
|
Non-managing member
unitholders
|
|
|
177,966
|
|
|
179,336
|
|
|
Total noncontrolling
interests
|
|
|
332,127
|
|
|
393,713
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
6,173,475
|
|
|
5,941,308
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
14,855,868
|
|
$
|
15,759,265
|
|
|
HCP,
Inc.
Consolidated
Statements of Operations
In thousands,
except per share data
(unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Rental and related
revenues
|
|
$
|
286,218
|
|
$
|
290,380
|
|
|
Tenant
recoveries
|
|
|
33,675
|
|
|
31,375
|
|
|
Resident fees and
services
|
|
|
140,232
|
|
|
165,763
|
|
|
Income from direct
financing leases
|
|
|
13,712
|
|
|
14,910
|
|
|
Interest
income
|
|
|
18,331
|
|
|
18,029
|
|
|
Total
revenues
|
|
|
492,168
|
|
|
520,457
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
86,718
|
|
|
122,062
|
|
|
Depreciation and
amortization
|
|
|
136,554
|
|
|
139,855
|
|
|
Operating
|
|
|
159,081
|
|
|
175,957
|
|
|
General and
administrative
|
|
|
22,478
|
|
|
25,451
|
|
|
Acquisition and
pursuit costs
|
|
|
1,057
|
|
|
2,475
|
|
|
Total costs and
expenses
|
|
|
405,888
|
|
|
465,800
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on sales of real
estate, net
|
|
|
317,258
|
|
|
—
|
|
|
Other income,
net
|
|
|
51,208
|
|
|
1,292
|
|
|
Total other income,
net
|
|
|
368,466
|
|
|
1,292
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes and equity income (loss) from unconsolidated joint
ventures
|
|
|
454,746
|
|
|
55,949
|
|
|
Income tax benefit
(expense)
|
|
|
6,162
|
|
|
(3,704)
|
|
|
Equity income (loss)
from unconsolidated joint ventures
|
|
|
3,269
|
|
|
(908)
|
|
|
Income from
continuing operations
|
|
|
464,177
|
|
|
51,337
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
—
|
|
|
117,742
|
|
|
Income
taxes
|
|
|
—
|
|
|
(49,334)
|
|
|
Total discontinued
operations
|
|
|
—
|
|
|
68,408
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
464,177
|
|
|
119,745
|
|
|
Noncontrolling
interests' share in earnings
|
|
|
(3,032)
|
|
|
(3,626)
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to HCP, Inc.
|
|
|
461,145
|
|
|
116,119
|
|
|
Participating
securities' share in earnings
|
|
|
(770)
|
|
|
(357)
|
|
|
|
|
|
|
|
|
|
|
Net income
applicable to common shares
|
|
$
|
460,375
|
|
$
|
115,762
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.98
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.97
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
468,299
|
|
|
466,074
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
475,173
|
|
|
466,262
|
|
|
HCP,
Inc.
Consolidated
Statements of Cash Flows
In
thousands
(unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
464,177
|
|
$
|
119,745
|
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization of real estate, in-place lease and other
intangibles:
|
|
|
|
|
|
|
Continuing
operations
|
|
136,554
|
|
139,855
|
|
|
Discontinued
operations
|
|
—
|
|
1,467
|
|
|
Amortization of
deferred compensation
|
|
3,765
|
|
5,345
|
|
|
Amortization of
deferred financing costs
|
|
3,858
|
|
5,280
|
|
|
Straight-line
rents
|
|
(5,007)
|
|
(7,576)
|
|
|
Equity (income) loss
from unconsolidated joint ventures
|
|
(3,269)
|
|
908
|
|
|
Distributions of
earnings from unconsolidated joint ventures
|
|
7,842
|
|
1,589
|
|
|
Gain on sales of real
estate, net
|
|
(317,258)
|
|
—
|
|
|
Deferred income tax
(benefit) expense
|
|
(8,130)
|
|
49,156
|
|
|
Foreign exchange and
other gains, net
|
|
(77)
|
|
(89)
|
|
|
Gain on sale of
marketable securities
|
|
(50,895)
|
|
—
|
|
|
Other non-cash
items
|
|
(583)
|
|
(922)
|
|
|
Changes
in:
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
3,467
|
|
3,705
|
|
|
Other assets,
net
|
|
(2,331)
|
|
(6,847)
|
|
|
Accounts payable and
accrued liabilities
|
|
(38,984)
|
|
(42,999)
|
|
|
Net cash provided by
operating activities
|
|
193,129
|
|
268,617
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Acquisitions of real
estate
|
|
—
|
|
(94,271)
|
|
|
Development of real
estate
|
|
(75,166)
|
|
(99,096)
|
|
|
Leasing costs and
tenant and capital improvements
|
|
(22,693)
|
|
(19,964)
|
|
|
Proceeds from sales
of real estate, net
|
|
1,166,265
|
|
—
|
|
|
Contributions to
unconsolidated joint ventures
|
|
(8,109)
|
|
(10,136)
|
|
|
Distributions in
excess of earnings from unconsolidated joint ventures
|
|
870
|
|
5,336
|
|
|
Net proceeds from the
sale and recapitalization of RIDEA II
|
|
480,613
|
|
—
|
|
|
Proceeds from the
sales of Four Seasons investments
|
|
135,538
|
|
—
|
|
|
Principal repayments
on DFLs, loans receivable and other
|
|
49,826
|
|
155,320
|
|
|
Investments in loans
receivable and other
|
|
(15,000)
|
|
(117,282)
|
|
|
Decrease in
restricted cash
|
|
3,073
|
|
14,336
|
|
|
Net cash provided by
(used in) investing activities
|
|
1,715,217
|
|
(165,757)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Net (repayments)
borrowings under bank line of credit
|
|
(375,812)
|
|
422,897
|
|
|
Repayments under bank
line of credit
|
|
(37,032)
|
|
—
|
|
|
Repayment of term
loan
|
|
(169,113)
|
|
—
|
|
|
Repayments of senior
unsecured notes
|
|
—
|
|
(500,000)
|
|
|
Repayments of
mortgage and other debt
|
|
(478,314)
|
|
(36,918)
|
|
|
Issuance of common
stock and exercise of options
|
|
3,472
|
|
34,122
|
|
|
Repurchase of common
stock
|
|
(3,532)
|
|
(3,628)
|
|
|
Dividends paid on
common stock
|
|
(173,629)
|
|
(268,186)
|
|
|
Issuance of
noncontrolling interests
|
|
650
|
|
2,200
|
|
|
Distributions to
noncontrolling interests
|
|
(5,659)
|
|
(4,889)
|
|
|
Net cash used in
financing activities
|
|
(1,238,969)
|
|
(354,402)
|
|
|
Effect of foreign
exchange on cash and cash equivalents
|
|
7
|
|
(293)
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
669,384
|
|
(251,835)
|
|
|
Cash and cash
equivalents, beginning of period
|
|
94,730
|
|
346,500
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
764,114
|
|
$
|
94,665
|
|
|
Less: cash and cash
equivalents of discontinued operations
|
|
|
—
|
|
|
(3,578)
|
|
|
Cash and cash
equivalents of continuing operations, end of period
|
|
$
|
764,114
|
|
$
|
91,087
|
|
|
HCP,
Inc.
Funds From
Operations
In thousands,
except per share data
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Net income
applicable to common shares
|
|
$
|
460,375
|
|
$
|
115,762
|
|
|
Depreciation and
amortization
|
|
|
136,554
|
|
|
141,322
|
|
|
Other depreciation
and amortization(1)
|
|
|
3,010
|
|
|
2,962
|
|
|
Gain on sales of real
estate, net
|
|
|
(317,258)
|
|
|
—
|
|
|
Taxes associated with
real estate dispositions(2)
|
|
|
(5,499)
|
|
|
53,177
|
|
|
Equity (income) loss
from unconsolidated joint ventures
|
|
|
(3,269)
|
|
|
908
|
|
|
FFO from
unconsolidated joint ventures
|
|
|
18,308
|
|
|
10,378
|
|
|
Noncontrolling
interests' and participating securities' share in
earnings
|
|
|
3,802
|
|
|
3,983
|
|
|
Noncontrolling
interests' and participating securities' share in FFO
|
|
|
(7,774)
|
|
|
(9,226)
|
|
|
FFO applicable to
common shares
|
|
$
|
288,249
|
|
$
|
319,266
|
|
|
Distributions on
dilutive convertible units
|
|
|
2,803
|
|
|
3,583
|
|
|
Diluted FFO
applicable to common shares
|
|
$
|
291,052
|
|
$
|
322,849
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per
common share
|
|
$
|
0.61
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate diluted FFO per share
|
|
|
475,173
|
|
|
472,186
|
|
|
|
|
|
|
|
|
|
|
Impact of
adjustments to FFO:
|
|
|
|
|
|
|
|
|
Other impairment
recovery(3)
|
|
$
|
(50,895)
|
|
$
|
—
|
|
|
Transaction-related
items(4)
|
|
|
1,057
|
|
|
2,518
|
|
|
Litigation
provision
|
|
|
1,838
|
|
|
—
|
|
|
Foreign currency
remeasurement gains
|
|
|
(77)
|
|
|
—
|
|
|
|
$
|
(48,077)
|
|
$
|
2,518
|
|
|
|
|
|
|
|
|
|
|
FFO as adjusted
applicable to common shares
|
|
$
|
240,172
|
|
$
|
321,784
|
|
|
Distributions on
dilutive convertible units and other
|
|
|
2,877
|
|
|
3,579
|
|
|
Diluted FFO as
adjusted applicable to common shares
|
|
$
|
243,049
|
|
$
|
325,363
|
|
|
Per common share
impact of adjustments on diluted FFO
|
|
$
|
(0.10)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO as
adjusted per common share
|
|
$
|
0.51
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate diluted FFO as adjusted per
share
|
|
|
475,173
|
|
|
472,186
|
|
|
|
|
|
|
|
|
|
|
FFO as adjusted from
QCP
|
|
$
|
—
|
|
$
|
98,207
|
|
|
Diluted
Comparable FFO as adjusted applicable to common
shares(5)
|
|
$
|
243,049
|
|
$
|
227,156
|
|
|
FFO as adjusted from
QCP per common share
|
|
$
|
—
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
Diluted Comparable
FFO as adjusted per common share
|
|
$
|
0.51
|
|
$
|
0.48
|
|
_______________________________________
|
(1)
|
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 on the
153-property amended lease portfolio in the 2014 Brookdale
transaction.
|
|
(2)
|
For the three months
ended March 31, 31 2017, represents income tax benefit associated
with the disposition of real estate assets in our RIDEA II
transaction. For the three months ended March 31, 2016, represents
income tax expense associated with state built-in gain tax payable
upon the disposition of specific real estate assets, of which $49
million relates to the HCR ManorCare, Inc. real estate
portfolio.
|
|
(3)
|
Relates to the sale
of our Four Seasons Notes.
|
|
(4)
|
On January 1, 2017,
we early adopted the FASB ASU No. 2017-01, Clarifying the
Definition of a Business, which prospectively results in
recognizing the majority of our real estate acquisitions as asset
acquisitions rather than business combinations. Acquisition and
pursuit costs relating to completed asset acquisitions are
capitalized, including those costs incurred prior to January 1,
2017. Real estate acquisitions completed prior to January 1, 2017
were deemed business combinations and the related acquisition and
pursuit costs were expense as incurred.
|
|
(5)
|
Represents FFO as
adjusted excluding FFO as adjusted from QCP and interest expense
related to debt repaid using proceeds from the spin-off, assuming
these transactions occurred at the beginning of the earliest period
presented. Comparable FFO as adjusted allows management to evaluate
the performance of our remaining real estate portfolio following
the completion of the QCP spin-off.
|
|
HCP,
Inc.
Funds Available
for Distribution
In
thousands
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
FFO as adjusted
applicable to common shares
|
|
$
|
240,172
|
|
$
|
321,784
|
|
|
Amortization of
deferred compensation
|
|
|
3,765
|
|
|
5,345
|
|
|
Amortization of
deferred financing costs
|
|
|
3,858
|
|
|
5,280
|
|
|
Straight-line
rents
|
|
|
(5,007)
|
|
|
(7,576)
|
|
|
Other depreciation
and amortization
|
|
|
(3,010)
|
|
|
(2,962)
|
|
|
Leasing costs and
tenant and capital improvements(1)
|
|
|
(23,287)
|
|
|
(20,482)
|
|
|
Lease restructure
payments
|
|
|
540
|
|
|
6,294
|
|
|
CCRC entrance
fees(2)
|
|
|
3,649
|
|
|
5,502
|
|
|
Deferred income
taxes
|
|
|
(2,374)
|
|
|
(2,942)
|
|
|
Other FAD
adjustments
|
|
|
249
|
|
|
(1,205)
|
|
|
FAD applicable to
common shares
|
|
$
|
218,555
|
|
$
|
309,038
|
|
|
Distributions on
dilutive convertible units
|
|
|
2,803
|
|
|
3,583
|
|
|
|
|
|
|
|
|
|
|
Diluted FAD
applicable to common shares
|
|
$
|
221,358
|
|
$
|
312,621
|
|
________________________________________
|
(1)
|
Includes our share of
leasing costs and tenant and capital improvements from
unconsolidated joint ventures.
|
|
(2)
|
Represents our 49%
share of non-refundable entrance fees as the fees are collected by
our CCRC JV, net of CCRC JV entrance fee amortization.
|
|
HCP,
Inc.
Projected SPP NOI
and Cash NOI(1)
Dollars in
thousands
(Unaudited)
|
|
|
For the projected
full year 2017 (low):
|
|
|
|
SH NNN
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
|
Cash NOI
|
|
$
|
322,500
|
|
$
|
259,600
|
|
$
|
275,000
|
|
$
|
290,200
|
|
$
|
114,200
|
|
$
|
1,261,500
|
|
|
Interest
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,800
|
|
|
47,800
|
|
|
Cash NOI plus
interest income
|
|
|
322,500
|
|
|
259,600
|
|
|
275,000
|
|
|
290,200
|
|
|
162,000
|
|
|
1,309,300
|
|
|
Interest
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,800)
|
|
|
(47,800)
|
|
|
Adjustments to cash
NOI(2)
|
|
|
400
|
|
|
(18,200)
|
|
|
(400)
|
|
|
4,100
|
|
|
4,200
|
|
|
(9,900)
|
|
|
NOI
|
|
|
322,900
|
|
|
241,400
|
|
|
274,600
|
|
|
294,300
|
|
|
118,400
|
|
|
1,251,600
|
|
|
Non-SPP NOI
|
|
|
(39,700)
|
|
|
(49,050)
|
|
|
(35,400)
|
|
|
(41,500)
|
|
|
(8,600)
|
|
|
(174,250)
|
|
|
SPP
NOI
|
|
|
283,200
|
|
|
192,350
|
|
|
239,200
|
|
|
252,800
|
|
|
109,800
|
|
|
1,077,350
|
|
|
Adjustments to SPP
NOI(2)
|
|
|
5,600
|
|
|
—
|
|
|
5,100
|
|
|
1,200
|
|
|
(4,100)
|
|
|
7,800
|
|
|
SPP cash
NOI
|
|
$
|
288,800
|
|
$
|
192,350
|
|
$
|
244,300
|
|
$
|
254,000
|
|
$
|
105,700
|
|
|
1,085,150
|
|
|
Addback
adjustments(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,450
|
|
|
Other income and
expenses(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
377,400
|
|
|
Costs and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(947,700)
|
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
681,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the projected
full year 2017 (high):
|
|
|
|
SH NNN
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
|
Cash NOI
|
|
$
|
326,600
|
|
$
|
262,300
|
|
$
|
277,900
|
|
$
|
292,900
|
|
$
|
115,400
|
|
$
|
1,275,100
|
|
|
Interest
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,700
|
|
|
48,700
|
|
|
Cash NOI plus
interest income
|
|
|
326,600
|
|
|
262,300
|
|
|
277,900
|
|
|
292,900
|
|
|
164,100
|
|
|
1,323,800
|
|
|
Interest
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,700)
|
|
|
(48,700)
|
|
|
Adjustments to cash
NOI(2)
|
|
|
500
|
|
|
(18,400)
|
|
|
(400)
|
|
|
4,100
|
|
|
4,200
|
|
|
(10,000)
|
|
|
NOI
|
|
|
327,100
|
|
|
243,900
|
|
|
277,500
|
|
|
297,000
|
|
|
119,600
|
|
|
1,265,100
|
|
|
Non-SPP NOI
|
|
|
(41,100)
|
|
|
(49,700)
|
|
|
(35,900)
|
|
|
(41,700)
|
|
|
(8,700)
|
|
|
(177,100)
|
|
|
SPP
NOI
|
|
|
286,000
|
|
|
194,200
|
|
|
241,600
|
|
|
255,300
|
|
|
110,900
|
|
|
1,088,000
|
|
|
Adjustments to SPP
NOI(2)
|
|
|
5,600
|
|
|
—
|
|
|
5,100
|
|
|
1,200
|
|
|
(4,150)
|
|
|
7,750
|
|
|
SPP cash
NOI
|
|
$
|
291,600
|
|
$
|
194,200
|
|
$
|
246,700
|
|
$
|
256,500
|
|
$
|
106,750
|
|
|
1,095,750
|
|
|
Addback
adjustments(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169,350
|
|
|
Other income and
expenses(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
384,900
|
|
|
Costs and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(940,200)
|
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
709,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended
December 31, 2016:
|
|
|
|
SH NNN
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
|
Cash NOI
|
|
$
|
408,842
|
|
$
|
263,828
|
|
$
|
289,051
|
|
$
|
270,437
|
|
$
|
119,629
|
|
$
|
1,351,787
|
|
|
Interest
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,808
|
|
|
88,808
|
|
|
Cash NOI plus
interest income
|
|
|
408,842
|
|
|
263,828
|
|
|
289,051
|
|
|
270,437
|
|
|
208,437
|
|
|
1,440,595
|
|
|
Interest
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,808)
|
|
|
(88,808)
|
|
|
Adjustments to cash
NOI(2)
|
|
|
7,566
|
|
|
(20,076)
|
|
|
3,006
|
|
|
3,557
|
|
|
3,016
|
|
|
(2,931)
|
|
|
NOI
|
|
|
416,408
|
|
|
243,752
|
|
|
292,057
|
|
|
273,994
|
|
|
122,645
|
|
|
1,348,856
|
|
|
Non-SPP NOI
|
|
|
(136,315)
|
|
|
(55,213)
|
|
|
(53,805)
|
|
|
(24,404)
|
|
|
(14,759)
|
|
|
(284,496)
|
|
|
SPP
NOI
|
|
|
280,093
|
|
|
188,539
|
|
|
238,252
|
|
|
249,590
|
|
|
107,886
|
|
|
1,064,360
|
|
|
Adjustments to SPP
NOI(2)
|
|
|
(2,107)
|
|
|
—
|
|
|
114
|
|
|
(547)
|
|
|
(2,977)
|
|
|
(5,517)
|
|
|
SPP cash
NOI
|
|
$
|
277,986
|
|
$
|
188,539
|
|
$
|
238,366
|
|
$
|
249,043
|
|
$
|
104,909
|
|
|
1,058,843
|
|
|
Addback
adjustments(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
290,013
|
|
|
Other income and
expenses(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
217,278
|
|
|
Costs and
expenses(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,191,963)
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265,755
|
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
639,926
|
|
|
Projected SPP NOI
change for the full year 2017:
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
|
Low
|
|
1.1%
|
|
2.0%
|
|
0.4%
|
|
1.3%
|
|
1.8%
|
|
1.2%
|
|
|
High
|
|
2.1%
|
|
3.0%
|
|
1.4%
|
|
2.3%
|
|
2.8%
|
|
2.2%
|
|
|
|
Projected SPP cash
(adjusted) NOI change for the full year 2017:
|
|
|
|
Senior Housing
Triple-net
|
|
SHOP
|
|
Life
Science
|
|
Medical
Office
|
|
Other
|
|
Total
|
|
|
Low
|
|
3.9%
|
|
2.0%
|
|
2.50%
|
|
2.0%
|
|
0.8%
|
|
2.5%
|
|
|
High
|
|
4.9%
|
|
3.0%
|
|
3.50%
|
|
3.0%
|
|
1.8%
|
|
3.5%
|
|
________________________________________
|
(1)
|
The foregoing
projections reflect management's view as of May 2, 2017 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 larger than expected litigation settlements
and related expenses related to existing or future litigation
matters. 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
straight-line rents, DFL non-cash interest, amortization of market
lease intangibles, net, lease termination fees and non-refundable
entrance fees as the fees are collected by our CCRC JV, net of CCRC
JV entrance fee amortization.
|
|
(3)
|
Represents non-SPP
NOI and adjustments to SPP NOI.
|
|
(4)
|
Represents interest
income, gain on sales of real estate, net, other income, net,
income taxes and equity income (loss) from unconsolidated joint
ventures, excluding NOI.
|
|
(5)
|
Represents interest
expense, depreciation and amortization, general and administrative
expenses, acquisition and pursuit costs, and loss on debt
extinguishments.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hcp-announces-results-for-the-quarter-ended-march-31-2017-300449325.html
SOURCE HCP, Inc.