Exhibit 99.1
Ventas Reports 2016 First Quarter Results
- First Quarter 2016 Normalized FFO Grows 7 Percent on a Comparable Basis to $1.04 Per Diluted Share
- Company Reaffirms 2016 Normalized FFO Guidance of $4.07 to $4.15 Per Diluted Share
CHICAGO--(BUSINESS WIRE)--April 29, 2016--Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today announced that normalized Funds From Operations (“FFO”) per diluted common share was $1.04 for the quarter ended March 31, 2016. Normalized FFO for the quarter ended March 31, 2016 was $351.7 million. Weighted average diluted shares outstanding for the first quarter 2016 increased to 339.2 million, compared to 329.2 million in the first quarter 2015.
Prior period reported results include in discontinued operations normalized FFO from the 355 properties that are now owned by Care Capital Properties, Inc. (“CCP”) (NYSE:CCP). The spin-off of CCP as an independent, publicly traded company (the “Spin-Off”) was successfully completed on August 17, 2015. Ventas’s full year 2015 reported results include normalized FFO from those properties for the period January 1 to August 17, 2015.
Normalized FFO for the quarter ended March 31, 2016 grew 7 percent on a comparable basis (“Comparable”), which adjusts all prior periods for the effects of the Spin-Off as if the Spin-Off were completed January 1, 2014.
Track Record of Excellence
“We are pleased to extend our long track record of excellent performance in the first quarter, delivering 7 percent Comparable normalized FFO per share growth from our high quality, diverse portfolio,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said.
“Ventas is situated at the exciting intersection of healthcare and real estate. Benefiting from the powerful trend of longevity, Ventas is uniquely positioned to deliver consistent growth and income for our shareholders by leveraging our leading people, platforms and properties,” Cafaro added.
First Quarter Net Income & NAREIT FFO
Reported net income attributable to common stockholders for the quarter ended March 31, 2016 was $149.0 million, or $0.44 per diluted common share. Reported net income attributable to common stockholders for the quarter ended March 31, 2015 was $120.4 million, or $0.37 per diluted common share.
Reported FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT FFO”), for the quarter ended March 31, 2016 was $356.9 million, or $1.05 per diluted common share. NAREIT FFO for the first quarter 2015 was $358.8 million, or $1.09 per diluted common share. The decrease from the first quarter 2015 is principally due to the inclusion in the prior period of results from the properties that were spun off to CCP, partially offset by lower merger related expenses and deal costs, higher net operating income (“NOI”) due to accretive investments and improved property performance in the first quarter 2016.
Portfolio Performance & Optimization
- Same-store cash NOI growth for the Company’s total portfolio (1,069 assets) was 2.9 percent excluding certain items referenced below in the respective 2016 and 2015 periods and 1.7 percent on a reported basis for the quarter ended March 31, 2016. Reported results by segment follow:
- The seniors housing operating portfolio (“SHOP”) same-store NOI grew 2.9 percent. The current first quarter period incurred unplanned real estate tax expenses relating to prior periods of $1.2 million.
- Triple net portfolio same-store cash NOI declined 0.3 percent. The comparable 2015 period included $5.2 million in fee income.
- Medical office building (MOB) portfolio same-store cash NOI grew 4.2 percent. First quarter 2016 results benefited from a lease termination fee with a net value of $2.3 million.
- On April 4, 2016 the Company announced it had entered into collaborative agreements to improve the quality and productivity of the long term acute care hospital (“LTAC”) portfolio leased by Ventas to Kindred Healthcare, Inc. (NYSE: KND), while retaining full current rent. The transactions are expected to better position the Kindred and Ventas portfolio to succeed.
First Quarter 2016 Highlights, Liquidity & Balance Sheet
- The Company made $154 million in investments in the first quarter 2016, including a $140 million secured debt investment in class-A life science properties located principally in Cambridge, MA, San Francisco, CA and San Diego, CA.
- The Company funded $37 million of high-quality development and redevelopment projects during the quarter of its approved and active pipeline totaling over $500 million.
- To fund these new investments, since its year-end 2015 earnings release on February 12, 2016, Ventas issued and sold a total of 1.6 million shares of common stock for aggregate gross proceeds of $101 million at an average price of $62.30. Year-to-date, Ventas has issued 3.3 million shares of common stock for aggregate gross proceeds of $193 million under its “at the market” equity offering program.
- During and immediately following the quarter, the Company sold 7 properties for aggregate gross proceeds of approximately $69 million.
- The Company further strengthened its credit profile at quarter-end, including: a sequential improvement in the Company’s net debt to EBITDA ratio to 6.0x as a result of disposition activity and the previously mentioned equity-funded investments; fixed charge coverage of 4.6x; and debt to total capitalization of approximately 34 percent.
- The Company currently has a strong liquidity position, with $1.8 billion available under its revolving credit facility, and $53 million of cash or cash equivalents.
Company Reaffirms 2016 Guidance Range for Normalized FFO of $4.07 to $4.15 Per Diluted Share
Consistent with previous guidance, Ventas currently expects its 2016 reported normalized FFO per diluted share to range between $4.07 and $4.15, representing 3 to 5 percent growth over 2015 on a Comparable basis. Ventas currently expects its 2016 NAREIT reported FFO per diluted share to be between $4.13 and $4.21.
Total reported Company same-store cash NOI is forecast to grow 1.5 to 3 percent in 2016, which is also consistent with previous guidance.
The Company expects continued sale of assets, estimating $500 million in 2016 dispositions, including sales closed year-to-date. The net proceeds are assumed to be reinvested in approximately $200 million of additional acquisitions and debt repayment.
Consistent with its practice, the Company’s guidance does not include any further material investments, dispositions or capital activity. A further modest reduction in leverage in 2016 as a result of continued net disposition activity and strong cash flow generation is also assumed in its guidance. A reconciliation of the Company’s guidance to the Company’s projected GAAP earnings is included in this press release.
The Company’s guidance is based on a number of other assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
FIRST QUARTER CONFERENCE CALL
Ventas will hold a conference call to discuss this earnings release today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The dial-in number for the conference call is (866) 700-5192 (or (617) 213-8833 for international callers). The participant passcode is “Ventas.” The conference call is being webcast live by NASDAQ OMX and can be accessed at the Company’s website at www.ventasreit.com. A replay of the webcast will be available following the call online, or by calling (888) 286-8010 (or (617) 801-6888 for international callers), passcode 15382774, beginning at approximately 2:00 p.m. Eastern Time and will remain for 36 days.
Ventas, Inc., an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of approximately 1,300 assets in the United States, Canada and the United Kingdom consists of seniors housing communities, medical office buildings, skilled nursing facilities, specialty hospitals and general acute care hospitals. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. More information about Ventas and Lillibridge can be found at www.ventasreit.com and www.lillibridge.com.
Supplemental information regarding the Company can be found on the Company’s website under the “Investor Relations” section or at www.ventasreit.com/investor-relations/annual-reports---supplemental-information. A comprehensive listing of the Company’s properties is available at www.ventasreit.com/our-portfolio/properties-by-stateprovince.
This press release includes 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. All statements regarding the Company’s or its tenants’, operators’, borrowers’ or managers’ expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, merger or acquisition integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust (“REIT”), plans and objectives of management for future operations and statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will” and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and actual results may differ from the Company’s expectations. The Company does not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.
The Company’s actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Company’s filings with the Securities and Exchange Commission. These factors include without limitation: (a) the ability and willingness of the Company’s tenants, operators, borrowers, managers and other third parties to satisfy their obligations under their respective contractual arrangements with the Company, including, in some cases, their obligations to indemnify, defend and hold harmless the Company from and against various claims, litigation and liabilities; (b) the ability of the Company’s tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including without limitation obligations under their existing credit facilities and other indebtedness; (c) the Company’s success in implementing its business strategy and the Company’s ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (d) macroeconomic conditions such as a disruption of or lack of access to the capital markets, changes in the debt rating on U.S. government securities, default or delay in payment by the United States of its obligations, and changes in the federal or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates; (e) the nature and extent of future competition, including new construction in the markets in which the Company’s seniors housing communities and medical office buildings (“MOBs”) are located; (f) the extent of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates; (g) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (h) the ability of the Company’s tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of the Company’s properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients; (i) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and the effect of those changes on the Company’s revenues, earnings and funding sources; (j) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (k) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (l) final determination of the Company’s taxable net income for the year ended December 31, 2015 and for the year ending December 31, 2016; (m) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases, the Company’s ability to reposition its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant; (n) risks associated with the Company’s senior living operating portfolio, such as factors that can cause volatility in the Company’s operating income and earnings generated by those properties, including without limitation national and regional economic conditions, costs of food, materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties; (o) changes in exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (p) year-over-year changes in the Consumer Price Index or the UK Retail Price Index and the effect of those changes on the rent escalators contained in the Company’s leases and the Company’s earnings; (q) the Company’s ability and the ability of its tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers; (r) the impact of increased operating costs and uninsured professional liability claims on the Company’s liquidity, financial condition and results of operations or that of the Company’s tenants, operators, borrowers and managers, and the ability of the Company and the Company’s tenants, operators, borrowers and managers to accurately estimate the magnitude of those claims; (s) risks associated with the Company’s MOB portfolio and operations, including the Company’s ability to successfully design, develop and manage MOBs and to retain key personnel; (t) the ability of the hospitals on or near whose campuses the Company’s MOBs are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups; (u) risks associated with the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition; (v) the impact of market or issuer events on the liquidity or value of the Company’s investments in marketable securities; (w) consolidation activity in the seniors housing and healthcare industries resulting in a change of control of, or a competitor’s investment in, one or more of the Company’s tenants, operators, borrowers or managers or significant changes in the senior management of the Company’s tenants, operators, borrowers or managers; (x) the impact of litigation or any financial, accounting, legal or regulatory issues that may affect the Company or its tenants, operators, borrowers or managers; and (y) changes in accounting principles, or their application or interpretation, and the Company’s ability to make estimates and the assumptions underlying the estimates, which could have an effect on the Company’s earnings.
| |
| CONSOLIDATED BALANCE SHEETS |
| As of March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015 |
| (In thousands, except per share amounts) |
| | | | | | | | | | |
| | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
| | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
| | | | | | | | | | |
| Assets | | | | | | | | | | |
| Real estate investments: | | | | | | | | | | |
| Land and improvements | | $ | 2,060,247 | | | $ | 2,056,428 | | | $ | 2,068,467 | | | $ | 2,016,281 | | | $ | 1,974,013 | |
| Buildings and improvements | | 20,395,386 | | | 20,309,599 | | | 20,220,624 | | | 19,247,902 | | | 19,049,345 | |
| Construction in progress | | 119,215 | | | 92,005 | | | 124,381 | | | 129,186 | | | 118,483 | |
| Acquired lease intangibles | | 1,343,187 | | | 1,344,422 | | | 1,347,493 | | | 1,214,702 | | | 1,197,567 | |
| | 23,918,035 | | | 23,802,454 | | | 23,760,965 | | | 22,608,071 | | | 22,339,408 | |
| Accumulated depreciation and amortization | | (4,409,554 | ) | | (4,177,234 | ) | | (3,972,544 | ) | | (3,780,388 | ) | | (3,569,773 | ) |
| Net real estate property | | 19,508,481 | | | 19,625,220 | | | 19,788,421 | | | 18,827,683 | | | 18,769,635 | |
| Secured loans receivable and investments, net | | 1,002,598 | | | 857,112 | | | 766,707 | | | 762,312 | | | 746,793 | |
| Investments in unconsolidated real estate entities | | 98,120 | | | 95,707 | | | 96,208 | | | 85,461 | | | 95,147 | |
| Net real estate investments | | 20,609,199 | | | 20,578,039 | | | 20,651,336 | | | 19,675,456 | | | 19,611,575 | |
| Cash and cash equivalents | | 51,701 | | | 53,023 | | | 65,231 | | | 60,532 | | | 120,225 | |
| Escrow deposits and restricted cash | | 76,710 | | | 77,896 | | | 74,491 | | | 193,960 | | | 223,772 | |
| Goodwill | | 1,044,983 | | | 1,047,497 | | | 1,052,321 | | | 1,058,607 | | | 947,386 | |
| Assets held for sale | | 54,263 | | | 93,060 | | | 152,014 | | | 2,822,553 | | | 3,012,994 | |
| Other assets | | 424,436 | | | 412,403 | | | 418,584 | | | 395,770 | | | 452,533 | |
| Total assets | | $ | 22,261,292 | | | $ | 22,261,918 | | | $ | 22,413,977 | | | $ | 24,206,878 | | | $ | 24,368,485 | |
| | | | | | | | | | |
| Liabilities and equity | | | | | | | | | | |
| Liabilities: | | | | | | | | | | |
| Senior notes payable and other debt | | $ | 11,247,730 | | | $ | 11,206,996 | | | $ | 11,284,957 | | | $ | 11,456,038 | | | $ | 11,549,062 | |
| Accrued interest | | 66,988 | | | 80,864 | | | 67,440 | | | 77,713 | | | 77,444 | |
| Accounts payable and other liabilities | | 738,327 | | | 779,380 | | | 791,556 | | | 784,547 | | | 777,595 | |
| Liabilities related to assets held for sale | | 12,625 | | | 34,340 | | | 48,860 | | | 225,269 | | | 222,389 | |
| Deferred income taxes | | 333,354 | | | 338,382 | | | 352,658 | | | 370,161 | | | 371,785 | |
| Total liabilities | | 12,399,024 | | | 12,439,962 | | | 12,545,471 | | | 12,913,728 | | | 12,998,275 | |
| | | | | | | | | | |
| Redeemable OP unitholder and noncontrolling interests | | 191,739 | | | 196,529 | | | 198,832 | | | 199,404 | | | 257,246 | |
| | | | | | | | | | |
| Commitments and contingencies | | | | | | | | | | |
| | | | | | | | | | |
| Equity: | | | | | | | | | | |
| Ventas stockholders' equity: | | | | | | | | | | |
| Preferred stock, $1.00 par value; 10,000 shares authorized, unissued | | — | | | — | | | — | | | — | | | — | |
| Common stock, $0.25 par value; 337,486; 334,386; 333,027; 331,965 and 330,913 shares issued at March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively | | 84,354 | | | 83,579 | | | 83,238 | | | 82,982 | | | 82,718 | |
| Capital in excess of par value | | 11,758,306 | | | 11,602,838 | | | 11,523,312 | | | 12,708,898 | | | 12,616,056 | |
| Accumulated other comprehensive (loss) income | | (19,932 | ) | | (7,565 | ) | | (592 | ) | | 10,180 | | | 4,357 | |
| Retained earnings (deficit) | | (2,208,474 | ) | | (2,111,958 | ) | | (1,992,848 | ) | | (1,772,529 | ) | | (1,660,856 | ) |
| Treasury stock, 1; 44; 61; 28 and 32 shares at March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively | | (59 | ) | | (2,567 | ) | | (3,675 | ) | | (2,048 | ) | | (2,385 | ) |
| Total Ventas stockholders' equity | | 9,614,195 | | | 9,564,327 | | | 9,609,435 | | | 11,027,483 | | | 11,039,890 | |
| Noncontrolling interest | | 56,334 | | | 61,100 | | | 60,239 | | | 66,263 | | | 73,074 | |
| Total equity | | 9,670,529 | | | 9,625,427 | | | 9,669,674 | | | 11,093,746 | | | 11,112,964 | |
| Total liabilities and equity | | $ | 22,261,292 | | | $ | 22,261,918 | | | $ | 22,413,977 | | | $ | 24,206,878 | | | $ | 24,368,485 | |
| |
| CONSOLIDATED STATEMENTS OF INCOME |
| For the three months ended March 31, 2016 and 2015 |
| (In thousands, except per share amounts) |
| | | | |
| | For the Three Months Ended |
| | March 31, |
| | 2016 | | 2015 |
| Revenues: | | | | |
| Rental income: | | | | |
| Triple-net leased | | $ | 214,487 | | | $ | 188,557 | |
| Medical office buildings | | 144,136 | | | 137,060 | |
| | 358,623 | | | 325,617 | |
| Resident fees and services | | 463,976 | | | 446,914 | |
| Medical office building and other services revenue | | 7,185 | | | 10,543 | |
| Income from loans and investments | | 22,386 | | | 22,053 | |
| Interest and other income | | 119 | | | 471 | |
| Total revenues | | 852,289 | | | 805,598 | |
| Expenses: | | | | |
| Interest | | 103,273 | | | 82,328 | |
| Depreciation and amortization | | 236,387 | | | 216,219 | |
| Property-level operating expenses: | | | | |
| Senior living | | 312,541 | | | 298,362 | |
| Medical office buildings | | 43,681 | | | 42,437 | |
| | 356,222 | | | 340,799 | |
| Medical office building services costs | | 3,451 | | | 6,918 | |
| General, administrative and professional fees | | 31,726 | | | 34,326 | |
| Loss on extinguishment of debt, net | | 314 | | | 21 | |
| Merger-related expenses and deal costs | | 1,632 | | | 30,613 | |
| Other | | 4,168 | | | 4,874 | |
| Total expenses | | 737,173 | | | 716,098 | |
| Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest | | 115,116 | | | 89,500 | |
| Loss from unconsolidated entities | | (198 | ) | | (251 | ) |
| Income tax benefit | | 8,421 | | | 7,250 | |
| Income from continuing operations | | 123,339 | | | 96,499 | |
| Discontinued operations | | (489 | ) | | 17,574 | |
| Gain on real estate dispositions | | 26,184 | | | 6,686 | |
| Net income | | 149,034 | | | 120,759 | |
| Net income attributable to noncontrolling interest | | 54 | | | 317 | |
| Net income attributable to common stockholders | | $ | 148,980 | | | $ | 120,442 | |
| Earnings per common share: | | | | |
| Basic: | | | | |
| Income from continuing operations attributable to common stockholders, including real estate dispositions | | $ | 0.44 | | | $ | 0.32 | |
| Discontinued operations | | (0.00 | ) | | 0.05 | |
| Net income attributable to common stockholders | | $ | 0.44 | | | $ | 0.37 | |
| Diluted: | | | | |
| Income from continuing operations attributable to common stockholders, including real estate dispositions | | $ | 0.44 | | | $ | 0.32 | |
| Discontinued operations | | (0.00 | ) | | 0.05 | |
| Net income attributable to common stockholders | | $ | 0.44 | | | $ | 0.37 | |
| | | | |
| Weighted average shares used in computing earnings per common share: | | | | |
| Basic | | 335,559 | | | 325,454 | |
| Diluted | | 339,202 | | | 329,203 | |
| | | | |
| Dividends declared per common share | | $ | 0.73 | | | $ | 0.79 | |
| |
| QUARTERLY CONSOLIDATED STATEMENTS OF INCOME |
| (In thousands, except per share amounts) |
| | | | | | | | | | |
| | 2016 First | | 2015 Quarters |
| | Quarter | | Fourth | | Third | | Second | | First |
| | | | | | | | | | |
| Revenues: | | | | | | | | | | |
| Rental income: | | | | | | | | | | |
| Triple-net leased | | $ | 214,487 | | | $ | 208,210 | | | $ | 201,028 | | | $ | 182,006 | | | $ | 188,557 | |
| Medical office buildings | | 144,136 | | | 145,958 | | | 142,755 | | | 140,472 | | | 137,060 | |
| | 358,623 | | | 354,168 | | | 343,783 | | | 322,478 | | | 325,617 | |
| Resident fees and services | | 463,976 | | | 454,871 | | | 454,825 | | | 454,645 | | | 446,914 | |
| Medical office building and other services revenue | | 7,185 | | | 11,541 | | | 10,000 | | | 9,408 | | | 10,543 | |
| Income from loans and investments | | 22,386 | | | 20,361 | | | 18,924 | | | 25,215 | | | 22,053 | |
| Interest and other income | | 119 | | | 333 | | | 74 | | | 174 | | | 471 | |
| Total revenues | | 852,289 | | | 841,274 | | | 827,606 | | | 811,920 | | | 805,598 | |
| | | | | | | | | | |
| Expenses: | | | | | | | | | | |
| Interest | | 103,273 | | | 103,692 | | | 97,135 | | | 83,959 | | | 82,328 | |
| Depreciation and amortization | | 236,387 | | | 236,795 | | | 226,332 | | | 214,711 | | | 216,219 | |
| Property-level operating expenses: | | | | | | | | | | |
| Senior living | | 312,541 | | | 307,261 | | | 304,540 | | | 299,252 | | | 298,362 | |
| Medical office buildings | | 43,681 | | | 45,073 | | | 43,305 | | | 43,410 | | | 42,437 | |
| | 356,222 | | | 352,334 | | | 347,845 | | | 342,662 | | | 340,799 | |
| Medical office building services costs | | 3,451 | | | 7,467 | | | 6,416 | | | 5,764 | | | 6,918 | |
| General, administrative and professional fees | | 31,726 | | | 27,636 | | | 32,114 | | | 33,959 | | | 34,326 | |
| Loss (gain) on extinguishment of debt, net | | 314 | | | (486 | ) | | 15,331 | | | (455 | ) | | 21 | |
| Merger-related expenses and deal costs | | 1,632 | | | (2,079 | ) | | 62,145 | | | 12,265 | | | 30,613 | |
| Other | | 4,168 | | | 4,009 | | | 4,795 | | | 4,279 | | | 4,874 | |
| Total expenses | | 737,173 | | | 729,368 | | | 792,113 | | | 697,144 | | | 716,098 | |
| | | | | | | | | | |
| Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest | | 115,116 | | | 111,906 | | | 35,493 | | | 114,776 | | | 89,500 | |
| (Loss) income from unconsolidated entities | | (198 | ) | | (223 | ) | | (955 | ) | | 9 | | | (251 | ) |
| Income tax benefit | | 8,421 | | | 11,548 | | | 10,697 | | | 9,789 | | | 7,250 | |
| Income from continuing operations | | 123,339 | | | 123,231 | | | 45,235 | | | 124,574 | | | 96,499 | |
| Discontinued operations | | (489 | ) | | (2,331 | ) | | (22,383 | ) | | 18,243 | | | 17,574 | |
| Gain on real estate dispositions | | 26,184 | | | 4,160 | | | 265 | | | 7,469 | | | 6,686 | |
| Net income | | 149,034 | | | 125,060 | | | 23,117 | | | 150,286 | | | 120,759 | |
| Net income attributable to noncontrolling interest | | 54 | | | 332 | | | 265 | | | 465 | | | 317 | |
| Net income attributable to common stockholders | | $ | 148,980 | | | $ | 124,728 | | | $ | 22,852 | | | $ | 149,821 | | | $ | 120,442 | |
| | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | |
| Basic: | | | | | | | | | | |
| Income from continuing operations attributable to common stockholders, including real estate dispositions | | $ | 0.44 | | | $ | 0.38 | | | $ | 0.14 | | | $ | 0.39 | | | $ | 0.32 | |
| Discontinued operations | | (0.00 | ) | | (0.01 | ) | | (0.07 | ) | | 0.06 | | | 0.05 | |
| Net income attributable to common stockholders | | $ | 0.44 | | | $ | 0.37 | | | $ | 0.07 | | | $ | 0.45 | | | $ | 0.37 | |
| Diluted: | | | | | | | | | | |
| Income from continuing operations attributable to common stockholders, including real estate dispositions | | $ | 0.44 | | | $ | 0.38 | | | $ | 0.14 | | | $ | 0.40 | | | $ | 0.32 | |
| Discontinued operations | | (0.00 | ) | | (0.01 | ) | | (0.07 | ) | | 0.05 | | | 0.05 | |
| Net income attributable to common stockholders | | $ | 0.44 | | | $ | 0.37 | | | $ | 0.07 | | | $ | 0.45 | | | $ | 0.37 | |
| | | | | | | | | | |
| Weighted average shares used in computing earnings per common share: | | | | | | | | | | |
| Basic | | 335,559 | | | 332,914 | | | 332,491 | | | 330,715 | | | 325,454 | |
| Diluted | | 339,202 | | | 336,406 | | | 336,338 | | | 334,026 | | | 329,203 | |
| |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| For the three months ended March 31, 2016 and 2015 |
| (In thousands) |
| | 2016 | | 2015 |
| Cash flows from operating activities: | | | | |
| Net income | | $ | 149,034 | | | $ | 120,759 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Depreciation and amortization (including amounts in discontinued operations) | | 236,387 | | | 247,453 | |
| Amortization of deferred revenue and lease intangibles, net | | (5,037 | ) | | (6,603 | ) |
| Other non-cash amortization | | 2,446 | | | (519 | ) |
| Stock-based compensation | | 5,029 | | | 6,307 | |
| Straight-lining of rental income, net | | (9,845 | ) | | (8,679 | ) |
| Loss on extinguishment of debt, net | | 314 | | | 21 | |
| Gain on real estate dispositions | | (26,184 | ) | | (6,686 | ) |
| Income tax benefit | | (9,156 | ) | | (7,850 | ) |
| Loss from unconsolidated entities | | 198 | | | 251 | |
| Distributions from unconsolidated entities | | 1,989 | | | 649 | |
| Other | | 1,099 | | | 2,259 | |
| Changes in operating assets and liabilities: | | | | |
| (Increase) decrease in other assets | | (4,835 | ) | | 4,615 | |
| (Decrease) increase in accrued interest | | (14,311 | ) | | 15,792 | |
| Decrease in accounts payable and other liabilities | | (54,237 | ) | | (23,600 | ) |
| Net cash provided by operating activities | | 272,891 | | | 344,169 | |
| Cash flows from investing activities: | | | | |
| Net investment in real estate property | | (13,620 | ) | | (1,072,539 | ) |
| Investment in loans receivable and other | | (146,214 | ) | | (39,573 | ) |
| Proceeds from real estate disposals | | 54,211 | | | 166,341 | |
| Proceeds from loans receivable | | 1,625 | | | 92,056 | |
| Funds held in escrow for future development expenditures | | — | | | 4,003 | |
| Development project expenditures | | (34,767 | ) | | (33,467 | ) |
| Capital expenditures | | (23,721 | ) | | (21,171 | ) |
| Other | | (4,265 | ) | | (4,180 | ) |
| Net cash used in investing activities | | (166,751 | ) | | (908,530 | ) |
| Cash flows from financing activities: | | | | |
| Net change in borrowings under credit facility | | 137,440 | | | (452,897 | ) |
| Proceeds from debt | | 145 | | | 1,092,833 | |
| Repayment of debt | | (151,309 | ) | | (24,647 | ) |
| Purchase of noncontrolling interest | | — | | | (2,660 | ) |
| Payment of deferred financing costs | | (76 | ) | | (14,435 | ) |
| Issuance of common stock, net | | 149,631 | | | 285,327 | |
| Cash distribution to common stockholders | | (245,496 | ) | | (254,910 | ) |
| Cash distribution to redeemable OP unitholders | | (2,323 | ) | | (2,365 | ) |
| Purchases of redeemable OP units | | — | | | (569 | ) |
| Distributions to noncontrolling interest | | (1,743 | ) | | (1,822 | ) |
| Other | | 6,151 | | | 5,690 | |
| Net cash (used in) provided by financing activities | | (107,580 | ) | | 629,545 | |
| Net (decrease) increase in cash and cash equivalents | | (1,440 | ) | | 65,184 | |
| Effect of foreign currency translation on cash and cash equivalents | | 118 | | | (307 | ) |
| Cash and cash equivalents at beginning of period | | 53,023 | | | 55,348 | |
| Cash and cash equivalents at end of period | | $ | 51,701 | | | $ | 120,225 | |
| | | | |
| Supplemental schedule of non-cash activities: | | | | |
| Assets and liabilities assumed from acquisitions: | | | | |
| Real estate investments | | $ | 2,558 | | | $ | 2,542,829 | |
| Other assets acquired | | (66 | ) | | 16,711 | |
| Debt assumed | | — | | | 177,857 | |
| Other liabilities | | 2,558 | | | 45,736 | |
| Deferred income tax liability | | (66 | ) | | 44,117 | |
| Redeemable OP unitholder interests assumed | | — | | | 87,245 | |
| Equity issued | | — | | | 2,204,585 | |
| |
| QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| | | | | | | | | | |
| | 2016 First | | 2015 Quarters |
| | Quarter | | Fourth | | Third | | Second | | First |
| Cash flows from operating activities: | | | | | | | | | | |
| Net income | | $ | 149,034 | | | $ | 125,060 | | | $ | 23,117 | | | $ | 150,286 | | | $ | 120,759 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | |
| Depreciation and amortization (including amounts in discontinued operations) | | 236,387 | | | 236,793 | | | 240,210 | | | 249,207 | | | 247,453 | |
| Amortization of deferred revenue and lease intangibles, net | | (5,037 | ) | | (4,817 | ) | | (5,682 | ) | | (7,027 | ) | | (6,603 | ) |
| Other non-cash amortization | | 2,446 | | | 2,397 | | | 2,142 | | | 1,428 | | | (519 | ) |
| Stock-based compensation | | 5,029 | | | 3,476 | | | 4,869 | | | 4,885 | | | 6,307 | |
| Straight-lining of rental income, net | | (9,845 | ) | | (8,674 | ) | | (8,357 | ) | | (8,082 | ) | | (8,679 | ) |
| Loss (gain) on extinguishment of debt, net | | 314 | | | (486 | ) | | 15,331 | | | (455 | ) | | 21 | |
| Gain on real estate dispositions (including amounts in discontinued operations) | | (26,184 | ) | | (4,162 | ) | | (217 | ) | | (7,746 | ) | | (6,686 | ) |
| Gain on sale of marketable securities | | — | | | — | | | — | | | (5,800 | ) | | — | |
| Income tax benefit | | (9,156 | ) | | (11,667 | ) | | (12,477 | ) | | (10,390 | ) | | (7,850 | ) |
| Loss (income) from unconsolidated entities | | 198 | | | 47 | | | 955 | | | (9 | ) | | 251 | |
| Loss on re-measurement of equity interest upon acquisition, net | | — | | | 176 | | | — | | | — | | | — | |
| Distributions from unconsolidated entities | | 1,989 | | | 2,912 | | | 5,577 | | | 14,324 | | | 649 | |
| Other | | 1,099 | | | 3,241 | | | 170 | | | 847 | | | 2,259 | |
| Changes in operating assets and liabilities: | | | | | | | | | | |
| (Increase) decrease in other assets | | (4,835 | ) | | 31,152 | | | 20,875 | | | (14,326 | ) | | 4,615 | |
| (Decrease) increase in accrued interest | | (14,311 | ) | | 13,657 | | | (9,770 | ) | | 316 | | | 15,792 | |
| (Decrease) increase in accounts payable and other liabilities | | (54,237 | ) | | (19,383 | ) | | 27,578 | | | 6,097 | | | (23,600 | ) |
| Net cash provided by operating activities | | 272,891 | | | 369,722 | | | 304,321 | | | 373,555 | | | 344,169 | |
| Cash flows from investing activities: | | | | | | | | | | |
| Net investment in real estate property | | (13,620 | ) | | (93,800 | ) | | (1,303,078 | ) | | (181,371 | ) | | (1,072,539 | ) |
| Investment in loans receivable and other | | (146,214 | ) | | (96,758 | ) | | (18,727 | ) | | (16,086 | ) | | (39,573 | ) |
| Proceeds from real estate disposals | | 54,211 | | | 82,775 | | | 136,442 | | | 106,850 | | | 166,341 | |
| Proceeds from loans receivable | | 1,625 | | | 2,267 | | | 13,634 | | | 1,219 | | | 92,056 | |
| Proceeds from sale or maturity of marketable securities | | — | | | — | | | 19,575 | | | 57,225 | | | — | |
| Funds held in escrow for future development expenditures | | — | | | — | | | — | | | — | | | 4,003 | |
| Development project expenditures | | (34,767 | ) | | (29,216 | ) | | (27,828 | ) | | (29,163 | ) | | (33,467 | ) |
| Capital expenditures | | (23,721 | ) | | (31,675 | ) | | (32,383 | ) | | (22,258 | ) | | (21,171 | ) |
| Investment in unconsolidated operating entity | | — | | | — | | | (26,282 | ) | | — | | | — | |
| Other | | (4,265 | ) | | (2,720 | ) | | (19,171 | ) | | (4,633 | ) | | (4,180 | ) |
| Net cash used in investing activities | | (166,751 | ) | | (169,127 | ) | | (1,257,818 | ) | | (88,217 | ) | | (908,530 | ) |
| Cash flows from financing activities: | | | | | | | | | | |
| Net change in borrowings under credit facility | | 137,440 | | | 66,949 | | | (469,072 | ) | | 131,563 | | | (452,897 | ) |
| Net cash impact of CCP Spin-off | | — | | | — | | | (128,749 | ) | | — | | | — | |
| Proceeds from debt | | 145 | | | 1,686 | | | 1,403,090 | | | 15,138 | | | 1,092,833 | |
| Proceeds from debt related to CCP Spin-off | | — | | | — | | | 1,400,000 | | | — | | | — | |
| Repayment of debt | | (151,309 | ) | | (106,526 | ) | | (1,050,628 | ) | | (253,795 | ) | | (24,647 | ) |
| Purchase of noncontrolling interest | | — | | | — | | | (3 | ) | | (1,156 | ) | | (2,660 | ) |
| Payment of deferred financing costs | | (76 | ) | | (772 | ) | | (9,285 | ) | | (173 | ) | | (14,435 | ) |
| Issuance of common stock, net | | 149,631 | | | 73,205 | | | 65,651 | | | 66,840 | | | 285,327 | |
| Cash distribution to common stockholders | | (245,496 | ) | | (243,838 | ) | | (243,171 | ) | | (261,494 | ) | | (254,910 | ) |
| Cash distribution to redeemable OP unitholders | | (2,323 | ) | | (2,319 | ) | | (8,079 | ) | | (2,332 | ) | | (2,365 | ) |
| Purchases of redeemable OP units | | — | | | — | | | — | | | (32,619 | ) | | (569 | ) |
| Distributions to noncontrolling interest | | (1,743 | ) | | (1,399 | ) | | (1,783 | ) | | (7,645 | ) | | (1,822 | ) |
| Other | | 6,151 | | | 494 | | | 561 | | | 238 | | | 5,690 | |
| Net cash (used in) provided by financing activities | | (107,580 | ) | | (212,520 | ) | | 958,532 | | | (345,435 | ) | | 629,545 | |
| Net (decrease) increase in cash and cash equivalents | | (1,440 | ) | | (11,925 | ) | | 5,035 | | | (60,097 | ) | | 65,184 | |
| Effect of foreign currency translation on cash and cash equivalents | | 118 | | | (283 | ) | | (336 | ) | | 404 | | | (307 | ) |
| Cash and cash equivalents at beginning of period | | 53,023 | | | 65,231 | | | 60,532 | | | 120,225 | | | 55,348 | |
| Cash and cash equivalents at end of period | | $ | 51,701 | | | $ | 53,023 | | | $ | 65,231 | | | $ | 60,532 | | | $ | 120,225 | |
| |
| QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) |
| (In thousands) |
| | | | | | | | | | |
| | 2016 First | | 2015 Quarters |
| | Quarter | | Fourth | | Third | | Second | | First |
| Supplemental schedule of non-cash activities: | | | | | | | | | | |
| Assets and liabilities assumed from acquisitions: | | | | | | | | | | |
| Real estate investments | | $ | 2,558 | | | $ | (1,190 | ) | | $ | 3,649 | | | $ | 20,672 | | | $ | 2,542,829 |
| Utilization of funds held for an Internal Revenue Code Section 1031 exchange | | — | | | — | | | — | | | (8,911 | ) | | — |
| Other assets acquired | | (66 | ) | | (131 | ) | | 3,716 | | | (206 | ) | | 16,711 |
| Debt assumed | | — | | | — | | | — | | | — | | | 177,857 |
| Other liabilities | | 2,558 | | | (3,478 | ) | | 8,149 | | | 4,052 | | | 45,736 |
| Deferred income tax liability | | (66 | ) | | 1,317 | | | (784 | ) | | 7,503 | | | 44,117 |
| Redeemable OP unitholder interests assumed | | — | | | — | | | — | | | — | | | 87,245 |
| Noncontrolling interests | | — | | | 840 | | | — | | | — | | | — |
| Equity issued | | — | | | — | | | — | | | — | | | 2,204,585 |
| Non-cash impact of CCP Spin-Off | | — | | | — | | | 1,256,404 | | | — | | | — |
| | | | | | | | | | | | | | |
| NON-GAAP FINANCIAL MEASURES RECONCILIATION |
Funds From Operations (FFO) and Funds Available for Distribution (FAD) Including Comparable Earnings1 |
| (Dollars in thousands, except per share amounts) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | YOY |
| | 2015 | | 2016 | | Growth |
| | Q1 | | Q2 | | Q3 | | Q4 | | YTD | | Q1 | | '15-'16 |
| Net income attributable to common stockholders 2 | | $ | 120,442 | | | $ | 149,821 | | | $ | 22,852 | | | $ | 124,728 | | | $ | 417,843 | | | $ | 148,980 | | | |
| Net income attributable to common stockholders per share 2 | | $ | 0.37 | | | $ | 0.45 | | | $ | 0.07 | | | $ | 0.37 | | | $ | 1.25 | | | $ | 0.44 | | | |
| | | | | | | | | | | | | | |
| Adjustments: | | | | | | | | | | | | | | |
| Depreciation and amortization on real estate assets | | 214,429 | | | 212,908 | | | 224,688 | | | 235,101 | | | 887,126 | | | 234,726 | | | |
| Depreciation on real estate assets related to noncontrolling interest | | (2,052 | ) | | (1,964 | ) | | (1,964 | ) | | (1,926 | ) | | (7,906 | ) | | (2,075 | ) | | |
| Depreciation on real estate assets related to unconsolidated entities | | 1,462 | | | 1,464 | | | 1,445 | | | 2,982 | | | 7,353 | | | 1,989 | | | |
| Loss on re-measurement of equity interest upon acquisition, net | | — | | | — | | | — | | | 176 | | | 176 | | | — | | | |
| Gain on real estate dispositions | | (6,686 | ) | | (7,469 | ) | | (265 | ) | | (4,160 | ) | | (18,580 | ) | | (26,184 | ) | | |
| Loss (gain) on real estate dispositions related to unconsolidated entities | | — | | | — | | | — | | | 19 | | | 19 | | | (536 | ) | | |
| Discontinued operations: | | | | | | | | | | | | | | |
| (Gain) loss on real estate dispositions | | — | | | (277 | ) | | 48 | | | (2 | ) | | (231 | ) | | — | | | |
| Depreciation and amortization on real estate assets | | 31,234 | | | 34,496 | | | 13,878 | | | — | | | 79,608 | | | — | | | |
| Subtotal: FFO add-backs | | 238,387 | | | 239,158 | | | 237,830 | | | 232,190 | | | 947,565 | | | 207,920 | | | |
| Subtotal: FFO add-backs per share | | $ | 0.72 | | | $ | 0.72 | | | $ | 0.71 | | | $ | 0.69 | | | $ | 2.84 | | | $ | 0.61 | | | |
| FFO (NAREIT) attributable to common stockholders | | $ | 358,829 | | | $ | 388,979 | | | $ | 260,682 | | | $ | 356,918 | | | $ | 1,365,408 | | | $ | 356,900 | | | (1 | %) |
| FFO (NAREIT) attributable to common stockholders per share | | $ | 1.09 | | | $ | 1.16 | | | $ | 0.78 | | | $ | 1.06 | | | $ | 4.09 | | | $ | 1.05 | | | (4 | %) |
| | | | | | | | | | | | | | |
| Adjustments: | | | | | | | | | | | | | | |
| Change in fair value of financial instruments | | (46 | ) | | 70 | | | (18 | ) | | 454 | | | 460 | | | (79 | ) | | |
| Non-cash income tax benefit | | (7,850 | ) | | (10,389 | ) | | (12,477 | ) | | (11,668 | ) | | (42,384 | ) | | (9,157 | ) | | |
| Loss (gain) on extinguishment of debt, net | | 21 | | | (39 | ) | | 16,301 | | | (486 | ) | | 15,797 | | | 314 | | | |
| Merger-related expenses, deal costs and re-audit costs | | 36,002 | | | 15,135 | | | 100,548 | | | 659 | | | 152,344 | | | 3,254 | | | |
| Amortization of other intangibles | | 591 | | | 591 | | | 438 | | | 438 | | | 2,058 | | | 438 | | | |
| Subtotal: normalized FFO add-backs | | 28,718 | | | 5,368 | | | 104,792 | | | (10,603 | ) | | 128,275 | | | (5,230 | ) | | |
| Subtotal: normalized FFO add-backs per share | | $ | 0.09 | | | $ | 0.02 | | | $ | 0.31 | | | $ | (0.03 | ) | | $ | 0.38 | | | $ | (0.02 | ) | | |
| Normalized FFO attributable to common stockholders | | $ | 387,547 | | | $ | 394,347 | | | $ | 365,474 | | | $ | 346,315 | | | $ | 1,493,683 | | | $ | 351,670 | | | (9 | %) |
| Normalized FFO attributable to common stockholders per share | | $ | 1.18 | | | $ | 1.18 | | | $ | 1.09 | | | $ | 1.03 | | | $ | 4.47 | | | $ | 1.04 | | | (12 | %) |
| Adjusted: Normalized FFO from CCP spin-off | | $ | (68,701 | ) | | $ | (69,306 | ) | | $ | (35,393 | ) | | $ | — | | | $ | (173,400 | ) | | — | | | |
| Adjusted Normalized FFO per share from CCP spin-off | | $ | (0.21 | ) | | $ | (0.21 | ) | | $ | (0.11 | ) | | $ | — | | | $ | (0.52 | ) | | $ | — | | | |
| Comparable Normalized FFO attributable to common stockholders | | $ | 318,846 | | | $ | 325,041 | | | $ | 330,081 | | | $ | 346,315 | | | $ | 1,320,283 | | | $ | 351,670 | | | 10 | % |
| Comparable Normalized FFO attributable to common stockholders per share | | $ | 0.97 | | | $ | 0.97 | | | $ | 0.98 | | | $ | 1.03 | | | $ | 3.95 | | | $ | 1.04 | | | 7 | % |
| | | | | | | | | | | | | | |
| Non-cash items included in normalized FFO: | | | | | | | | | | | | | | |
| Amortization of deferred revenue and lease intangibles, net | | (6,603 | ) | | (7,027 | ) | | (5,682 | ) | | (4,817 | ) | | (24,129 | ) | | (5,037 | ) | | |
| Other non-cash amortization, including fair market value of debt | | (519 | ) | | 1,428 | | | 2,142 | | | 2,397 | | | 5,448 | | | 2,446 | | | |
| Stock-based compensation | | 6,307 | | | 4,885 | | | 4,869 | | | 3,476 | | | 19,537 | | | 5,029 | | | |
| Straight-lining of rental income, net | | (8,679 | ) | | (8,082 | ) | | (8,357 | ) | | (8,674 | ) | | (33,792 | ) | | (9,845 | ) | | |
| Subtotal: non-cash items included in normalized FFO | | (9,494 | ) | | (8,796 | ) | | (7,028 | ) | | (7,618 | ) | | (32,936 | ) | | (7,407 | ) | | |
| Capital expenditures | | (22,148 | ) | | (23,520 | ) | | (33,536 | ) | | (33,496 | ) | | (112,700 | ) | | (24,987 | ) | | |
| Normalized FAD attributable to common stockholders | | $ | 355,905 | | | $ | 362,031 | | | $ | 324,910 | | | $ | 305,201 | | | $ | 1,348,047 | | | $ | 319,276 | | | (10 | %) |
| Normalized FAD attributable to common stockholders per share | | $ | 1.08 | | | $ | 1.08 | | | $ | 0.97 | | | $ | 0.91 | | | $ | 4.04 | | | $ | 0.94 | | | (13 | %) |
| Adjusted: Normalized FAD from CCP spin-off | | $ | (61,014 | ) | | $ | (64,080 | ) | | $ | (29,987 | ) | | $ | — | | | $ | (155,081 | ) | | $ | — | | | |
| Adjusted: Normalized FAD per share from CCP spin-off | | $ | (0.19 | ) | | $ | (0.19 | ) | | $ | (0.09 | ) | | $ | — | | | $ | (0.46 | ) | | $ | — | | | |
| Comparable Normalized FAD attributable to common stockholders | | $ | 294,891 | | | $ | 297,951 | | | $ | 294,923 | | | $ | 305,201 | | | $ | 1,192,966 | | | $ | 319,276 | | | 8 | % |
| Comparable Normalized FAD attributable to common stockholders per share | | $ | 0.90 | | | $ | 0.89 | | | $ | 0.88 | | | $ | 0.91 | | | $ | 3.57 | | | $ | 0.94 | | | 4 | % |
| Merger-related expenses, deal costs and re-audit costs | | (36,002 | ) | | (15,135 | ) | | (100,548 | ) | | (659 | ) | | (152,344 | ) | | (3,254 | ) | | |
| FAD attributable to common stockholders | | $ | 319,903 | | | $ | 346,896 | | | $ | 224,362 | | | $ | 304,542 | | | $ | 1,195,703 | | | $ | 316,022 | | | (1 | %) |
| FAD attributable to common stockholders per share | | $ | 0.97 | | | $ | 1.04 | | | $ | 0.67 | | | $ | 0.91 | | | $ | 3.58 | | | $ | 0.93 | | | (4 | %) |
| Adjusted: FAD from CCP spin-off | | $ | (56,454 | ) | | $ | (61,760 | ) | | $ | 7,204 | | | $ | 2,333 | | | $ | (108,677 | ) | | $ | 489 | | | |
| Adjusted FAD per share from CCP spin-off | | $ | (0.17 | ) | | $ | (0.18 | ) | | $ | 0.02 | | | $ | 0.01 | | | $ | (0.33 | ) | | $ | 0.00 | | | |
| Comparable FAD attributable to common stockholders | | $ | 263,449 | | | $ | 285,136 | | | $ | 231,566 | | | $ | 306,875 | | | $ | 1,087,026 | | | $ | 316,511 | | | 20 | % |
| Comparable FAD attributable to common stockholders per share | | $ | 0.80 | | | $ | 0.85 | | | $ | 0.69 | | | $ | 0.91 | | | $ | 3.25 | | | $ | 0.93 | | | 16 | % |
| Weighted average diluted shares | | 329,203 | | | 334,026 | | | 336,338 | | | 336,406 | | | 334,007 | | | 339,202 | | | |
| | | | | | | | | | | | | | |
| 1 Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to material changes in the Company’s weighted average diluted share count, if any. |
| |
| 2 CCP impacts calculated based on net income related to discontinued operations, less the de minimis share of discontinued operations net income not related to CCP assets, assuming (a) G&A of $2.5 million in Q1’15 and Q2’15 ($0.01 per share per quarter), and $1.3 million in Q3’15 ($0.00 per share) and (b) interest expense of $6.9 million in Q1’15 and Q2’15 ($0.02 per share per quarter), and $4.3 million in Q3’15 ($0.01 per share); these adjustments differ from the respective amounts found in discontinued operations. |
| |
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers FFO, normalized FFO, FAD and normalized FAD to be appropriate measures of operating performance of an equity REIT. In particular, the Company believes that normalized FFO is useful because it allows investors, analysts and Company management to compare the Company’s operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation. In some cases, the Company provides information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and Company management to assess the impact of those items on the Company’s financial results.
The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net income attributable to common stockholders (computed in accordance with GAAP) excluding gains (or losses) from sales of real estate property, including gain (or loss) on re-measurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company defines normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of the Company’s debt; (c) the non-cash effect of income tax benefits or expenses and derivative transactions that have non-cash mark-to-market impacts on the Company’s income statement; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; and (f) expenses related to the re-audit and re-review in 2014 of the Company’s historical financial statements and related matters. Normalized FAD represents normalized FFO excluding non-cash components, straight-line rental adjustments and deducting capital expenditures, including tenant allowances and leasing commissions. FAD represents normalized FAD after subtracting merger-related expenses, deal costs and re-audit costs.
FFO, normalized FFO, FAD and normalized FAD presented herein may not be identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO, normalized FFO, FAD and normalized FAD should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company’s financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO, normalized FFO, FAD and normalized FAD should be examined in conjunction with net income as presented elsewhere herein.
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| NON-GAAP FINANCIAL MEASURES RECONCILIATION |
EPS, FFO and FAD Guidance Attributable to Common Shareholders 1,2 |
| (Dollars in millions, except per share amounts) |
| | | | | | | | |
| | Tentative / Preliminary and Subject to Change |
| | FY2016 - Guidance | | 2016 - Per Share |
| | Low | | High | | Low | | High |
| | | | | | | | | |
| Net Income Attributable to Common Stockholders | | $607 | | $623 | | $1.78 | | $1.83 |
| | | | | | | | |
| Depreciation and Amortization Adjustments | | 864 | | | 904 | | | 2.53 | | | 2.65 | |
| Other Adjustments 3 | | (60 | ) | | (90 | ) | | (0.18 | ) | | (0.26 | ) |
| | | | | | | | | |
| FFO (NAREIT) Attributable to Common Stockholders | | $1,411 | | $1,437 | | $4.13 | | $4.21 |
| | | | | | | | |
| Merger-Related Expenses, Deal Costs and Re-Audit Costs | | 5 | | | 10 | | | 0.01 | | | 0.03 | |
| Other Adjustments 3 | | (27 | ) | | (30 | ) | | (0.08 | ) | | (0.09 | ) |
| | | | | | | | | |
| Normalized FFO Attributable to Common Stockholders | | $1,389 | | $1,417 | | $4.07 | | $4.15 |
| % Year-Over-Year Comparable Growth | | | | | | 3 | % | | 5 | % |
| | | | | | | | |
| Non-Cash Items Included in Normalized FFO | | (15 | ) | | (19 | ) | | (0.05 | ) | | (0.06 | ) |
| Capital Expenditures | | (120 | ) | | (130 | ) | | (0.35 | ) | | (0.38 | ) |
| | | | | | | | | |
| Normalized FAD Attributable to Common Stockholders | | $1,254 | | $1,268 | | $3.67 | | $3.72 |
| % Year-Over-Year Comparable Growth | | | | | | 3 | % | | 4 | % |
| | | | | | | | |
| Merger-Related Expense, Deal Costs and Re-Audit Costs | | (5 | ) | | (10 | ) | | (0.01 | ) | | (0.03 | ) |
| Other Adjustments 3 | | 0 | | | 0 | | | 0.00 | | | 0.00 | |
| | | | | | | | | |
| FAD Attributable to Common Stockholders | | $1,249 | | $1,258 | | $3.66 | | $3.69 |
| % Year-Over-Year Comparable Growth | | | | | | 13 | % | | 14 | % |
| | | | | | | | |
| Weighted Average Diluted Shares | | 341,365 | | | 341,365 | | | | | |
1 | | The Company’s guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company’s expectations depending on factors discussed in the Company’s filings with the Securities and Exchange Commission. |
2 | | Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to changes in the Company's weighted average diluted share count, if any. |
3 | | See page 11 for detailed breakout of “other adjustments” for each respective category. |
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NON-GAAP FINANCIAL MEASURES RECONCILIATION |
Net Debt to Adjusted Pro Forma EBITDA |
| |
| The following information considers the pro forma effect on net income of the Company’s investments and other capital transactions that were completed during the three months ended March 31, 2016, as if the transactions had been consummated as of the beginning of the period. The following table illustrates net debt to pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding gains or losses on extinguishment of debt, income or loss from noncontrolling interest and unconsolidated entities (excluding cash distributions), merger-related expenses and deal costs, expenses related to the re-audit and re-review in 2014 of the Company’s historical financial statements, net gains on real estate activity, gains or losses on re-measurement of equity interest upon acquisition and changes in the fair value of financial instruments (including amounts in discontinued operations) (“Adjusted Pro Forma EBITDA”) (dollars in thousands): |
| Net income attributable to common stockholders | | $ | 148,980 | | |
| Pro forma adjustments for current period investments, capital transactions and dispositions | | 6,726 | | |
| Pro forma net income for the three months ended March 31, 2016 | | 155,706 | | |
| Add back: | | | |
| Pro forma interest | | 102,564 | | |
| Pro forma depreciation and amortization | | 236,371 | | |
| Stock-based compensation | | 5,029 | | |
| Gain on real estate dispositions | | (26,184 | ) | |
| Loss on extinguishment of debt, net | | 314 | | |
| Loss from unconsolidated entities | | 198 | | |
| Pro forma noncontrolling interest | | 35 | | |
| Income tax benefit | | (8,421 | ) | |
| Change in fair value of financial instruments | | (79 | ) | |
| Other taxes | | (251 | ) | |
| Pro forma merger-related expenses, deal costs and re-audit costs | | 2,298 | | |
| Adjusted Pro Forma EBITDA | | 467,580 | | |
| Adjusted Pro Forma EBITDA annualized | | $ | 1,870,320 | | |
| | | |
| As of March 31, 2016: | | | |
| Debt | | $ | 11,247,730 | | |
| Cash, adjusted for cash escrows pertaining to debt | | (73,588 | ) | |
| Net debt | | $ | 11,174,142 | | |
| | | |
| Net debt to Adjusted Pro Forma EBITDA | | 6.0 | | x |
| | |
| NON-GAAP FINANCIAL MEASURES RECONCILIATION |
| (Dollars in thousands) |
| Total Portfolio Same-Store Constant Currency Cash NOI |
| | | | |
| | For the Three Months Ended | | Percentage |
| | March 31, | | Increase |
| | 2016 | | 2015 | | |
| | | | | | |
| Total Revenues, Excluding Interest and Other Income | | $ | 852,170 | | | $ | 805,127 | | | |
| Less: | | | | | | |
| Total Property-Level Operating Expenses | | (356,222 | ) | | (340,799 | ) | | |
| Medical Office Building Services Costs | | (3,451 | ) | | (6,918 | ) | | |
| Net Operating Income | | 492,497 | | | 457,410 | | | |
| | | | | | |
| Adjustments: | | | | | | |
| Lease Modification Fee | | — | | | 5,200 | | | |
| NOI Not Included in Same-Store | | (76,667 | ) | | (54,217 | ) | | |
| Straight-Lining of Rental Income | | (9,781 | ) | | (8,639 | ) | | |
| Non-Cash Rental Income | | (4,379 | ) | | (3,533 | ) | | |
| Non-Segment NOI | | (23,396 | ) | | (22,602 | ) | | |
| Constant Currency Adjustment | | — | | | (1,722 | ) | | |
| | (114,223 | ) | | (85,513 | ) | | |
| | | | | | |
| Constant Currency NOI as Reported | | $ | 378,274 | | | $ | 371,897 | | | 1.7 | % |
| | | | | | |
| Adjustments: | | | | | | |
| Unplanned Real Estate Tax Expenses | | 1,239 | | | — | | | |
| Lease Modification Fee | | — | | | (5,200 | ) | | |
| Lease Termination Fee | | (2,278 | ) | | — | | | |
| | (1,039 | ) | | (5,200 | ) | | |
| | | | | | |
| Constant Currency NOI as Adjusted | | $ | 377,235 | | | $ | 366,697 | | | 2.9 | % |
| |
| NON-GAAP FINANCIAL MEASURES RECONCILIATION |
| (Dollars in thousands) |
| Triple-Net Portfolio Same-Store Constant Currency Cash NOI |
| | |
| | For the Three Months Ended |
| | March 31, |
| | 2016 | | 2015 |
| | | | |
| Total Revenues, Excluding Interest and Other Income | | $ | 215,686 | | | $ | 189,693 | |
| Less: | | | | |
| Total Property-Level Operating Expenses | | — | | | — | |
| Medical Office Building Services Costs | | — | | | — | |
| Net Operating Income | | 215,686 | | | 189,693 | |
| | | | |
| Adjustments: | | | | |
| Lease Modification Fee | | — | | | 5,200 | |
| NOI Not Included in Same-Store | | (36,494 | ) | | (18,730 | ) |
| Straight-Lining of Rental Income | | (8,197 | ) | | (5,262 | ) |
| Non-Cash Rental Income | | (5,215 | ) | | (4,502 | ) |
| Constant Currency Adjustment | | — | | | (154 | ) |
| | (49,906 | ) | | (23,448 | ) |
| | | | |
| Constant Currency NOI as Reported | | $ | 165,780 | | | $ | 166,245 | |
| | | | |
| Percentage Increase | | | | (0.3 | )% |
| |
| NON-GAAP FINANCIAL MEASURES RECONCILIATION |
| (Dollars in thousands) |
| |
| Senior Housing Operating Portfolio Same-Store Constant Currency Cash NOI |
| | |
| | For the Three Months Ended |
| | March 31, |
| | 2016 | | 2015 |
| | | | |
| Total Revenues, Excluding Interest and Other Income | | $ | 463,976 | | | $ | 446,914 | |
| Less: | | | | |
| Total Property-Level Operating Expenses | | (312,541 | ) | | (298,362 | ) |
| Medical Office Building Services Costs | | — | | | — | |
| Net Operating Income | | 151,435 | | | 148,552 | |
| | | | |
| Adjustments: | | | | |
| NOI Not Included in Same-Store | | (12,219 | ) | | (11,650 | ) |
| Constant Currency Adjustment | | — | | | (1,569 | ) |
| | (12,219 | ) | | (13,219 | ) |
| | | | |
| Constant Currency NOI as Reported | | $ | 139,216 | | | $ | 135,333 | |
| | | | |
| Percentage Increase | | | | 2.9 | % |
| |
| NON-GAAP FINANCIAL MEASURES RECONCILIATION |
| (Dollars in thousands) |
| |
| MOB Portfolio Same-Store Constant Currency Cash NOI |
| | |
| | For the Three Months Ended |
| | March 31, |
| | 2016 | | 2015 |
| | | | |
| Total Revenues, Excluding Interest and Other Income | | $ | 149,112 | | | $ | 145,918 | |
| Less: | | | | |
| Total Property-Level Operating Expenses | | (43,681 | ) | | (42,437 | ) |
| Medical Office Building Services Costs | | (3,451 | ) | | (6,918 | ) |
| Net Operating Income | | 101,980 | | | 96,563 | |
| | | | |
| Adjustments: | | | | |
| NOI Not Included in Same-Store | | (27,954 | ) | | (23,837 | ) |
| Straight-Lining of Rental Income | | (1,584 | ) | | (3,377 | ) |
| Non-Cash Rental Income | | 836 | | | 969 | |
| | (28,702 | ) | | (26,245 | ) |
| | | | |
| Constant Currency NOI as Reported | | $ | 73,278 | | | $ | 70,318 | |
| | | | |
| Percentage Increase | | | | 4.2 | % |
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CONTACT:
Ventas, Inc.
Ryan K. Shannon
(877) 4-VENTAS
