Exhibit 99.2
Supplemental Information
September 30, 2008
(Unaudited)
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Sugar Land, TX | South San Francisco, CA | Dallas, TX | Walnut Creek, CA |
Company Information (1) | ||||||||||||
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Board of Directors |
| Senior Management | ||||||||||
Robert R. Fanning, Jr. |
| Harold M. Messmer, Jr. |
| Jon M. Bergschneider |
| Brian J. Maas | ||||||
Managing Director (Retired), |
| Chairman and Chief Executive Officer |
| Senior Vice President |
| Senior Vice President | ||||||
The Huron Consulting Group |
| Robert Half International, Inc. |
| Life Science Estates |
| Associate General Counsel | ||||||
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James F. Flaherty III |
| Peter L. Rhein |
| George P. Doyle |
| Dennis J. Martin | ||||||
Chairman and Chief Executive Officer |
| Partner, Sarlot & Rhein |
| Senior Vice President |
| Senior Vice President | ||||||
HCP, Inc. |
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| Chief Accounting Officer |
| Financial Planning and Analysis | ||||||
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| Kenneth B. Roath |
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Christine N. Garvey |
| Chairman Emeritus, HCP, Inc. |
| James F. Flaherty III |
| Randall W. Rohner | ||||||
Former Global Head of Corporate |
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| Chairman and |
| Senior Vice President | ||||||
Real Estate Services, Deutsche Bank AG |
| Richard M. Rosenberg |
| Chief Executive Officer |
| Life Science Estates | ||||||
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| Chairman and Chief Executive Officer |
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David B. Henry |
| (Retired), Bank of America |
| Paul F. Gallagher |
| Timothy M. Schoen | ||||||
Vice Chairman and Chief Investment |
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| Executive Vice President |
| Senior Vice President | ||||||
Officer, Kimco Realty Corporation |
| Joseph P. Sullivan |
| Chief Investment Officer |
| Investment Management | ||||||
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| Chairman of the Board of Advisors |
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Lauralee E. Martin |
| RAND Health |
| Edward J. Henning |
| Susan M. Tate | ||||||
Chief Operating and Financial Officer |
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| Executive Vice President |
| Senior Vice President | ||||||
Jones Lang LaSalle Incorporated |
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| General Counsel, Chief Administrative |
| Asset Management | ||||||
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| Officer and Corporate Secretary |
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Michael D. McKee |
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| Mark A. Wallace | ||||||
Chief Executive Officer and Vice |
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| Thomas D. Kirby |
| Executive Vice President | ||||||
Chairman |
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| Senior Vice President |
| Chief Financial Officer and | ||||||
(Retired), The Irvine Company |
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| Acquisitions and Valuations |
| Treasurer | ||||||
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| Thomas M. Klaritch |
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| Executive Vice President |
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| Medical Office Properties |
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Other Information | ||||||||||||
Corporate Headquarters |
| Nashville Office |
| Trading Symbol |
| Senior Debt Ratings | ||||||
3760 Kilroy Airport Way, Suite 300 |
| 3100 West End Avenue, Suite 800 |
| HCP |
| Common Stock |
| Moody's |
| Baa3 | ||
Long Beach, CA 90806-2473 |
| Nashville, TN 37203 |
| HCP_pe |
| Series E Preferred |
| Standard & |
| BBB | ||
(562) 733-5100 |
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| Stock |
| Poor's |
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| HCP_pf |
| Series F Preferred |
| Fitch |
| BBB | ||
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| Stock |
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Chicago Office |
| San Francisco Office |
| Stock Exchange Listing |
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444 North Michigan Avenue, Suite 3230 |
| 400 Oyster Point Boulevard, Suite 409 |
| NYSE |
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Chicago, IL 60611 |
| South San Francisco, CA 94080 |
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(1) As of November 4, 2008.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
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Highlights | |||||||||||||
Dollars in thousands, except per share data |
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| Three Months Ended September |
| Nine Months Ended September |
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| 2008 |
| 2007 |
| 2008 |
| 2007 |
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Revenues |
| $ | 269,938 |
| $ | 243,579 |
| $ | 767,433 |
| $ | 658,039 |
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NOI |
| 218,569 |
| 192,063 |
| 616,479 |
| 518,520 |
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Adjusted EBITDA |
| 275,830 |
| 229,889 |
| 737,392 |
| 638,311 |
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Net income applicable to common shares |
| 120,135 |
| 316,866 |
| 392,276 |
| 522,872 |
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FFO applicable to common shares |
| 175,063 |
| 109,007 |
| 416,783 |
| 331,850 |
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Per diluted common share: |
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EPS |
| $ | 0.49 |
| $ | 1.53 |
| $ | 1.68 |
| $ | 2.53 |
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FFO |
| 0.71 |
| 0.52 |
| 1.78 |
| 1.60 |
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FFO payout ratio per diluted common share |
| 64.1% |
| 85.6% |
| 76.7% |
| 83.4% |
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Adjusted fixed charge coverage |
| 2.8x |
| 1.9x |
| 2.3x |
| 2.2x |
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Financial leverage |
| 47% |
| 59% |
| 47% |
| 59% |
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Developments(1) |
| Total Assets Under Management: $13.4 Billion(2) | |||
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· | $0.71 FFO per diluted share of common stock |
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· | Raised over $900 million during the quarter ended September 30, 2008: |
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| $116 million from asset dispositions |
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| $312 million from debt financing |
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| $481 million from equity issuance |
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· | Completed Tenet settlement and sale of Tarzana hospital |
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· | Completed $200 million unsecured term loan on October 24, 2008 |
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(1) As of and for the three months ended September 30, 2008, unless otherwise indicated.
(2) Represents the historical cost of real estate owned by HCP, the carrying amount of mortgage loans and 100% of the cost of real estate owned by unconsolidated joint ventures, excluding assets under development and land held for future development, as of September 30, 2008.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
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Consolidated Balance Sheets | |||||||
In thousands |
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| September |
| December |
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| 2008 |
| 2007 |
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ASSETS |
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Real estate: |
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Buildings and improvements |
| $ | 7,733,690 |
| $ | 7,521,415 |
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Development costs and construction in progress |
| 249,837 |
| 372,527 |
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Land |
| 1,563,167 |
| 1,569,956 |
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Less accumulated depreciation and amortization |
| 781,903 |
| 621,379 |
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Net real estate |
| 8,764,791 |
| 8,842,519 |
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Net investment in direct financing leases |
| 647,429 |
| 640,052 |
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Loans receivable, net |
| 1,068,240 |
| 1,065,485 |
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Investments in and advances to unconsolidated joint ventures |
| 275,593 |
| 248,894 |
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Accounts receivable, net |
| 30,011 |
| 44,892 |
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Cash and cash equivalents |
| 117,052 |
| 96,269 |
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Restricted cash |
| 37,310 |
| 36,427 |
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Intangible assets, net |
| 552,906 |
| 623,073 |
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Real estate held for sale, net |
| 5,301 |
| 408,028 |
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Other assets, net |
| 532,771 |
| 516,133 |
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Total assets |
| $ | 12,031,404 |
| $ | 12,521,772 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Bank line of credit |
| $ | — |
| $ | 951,700 |
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Bridge loan |
| 520,000 |
| 1,350,000 |
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Senior unsecured notes |
| 3,522,689 |
| 3,819,950 |
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Mortgage debt |
| 1,804,069 |
| 1,277,291 |
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Mortgage debt on assets held for sale |
| 978 |
| 3,470 |
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Other debt |
| 102,602 |
| 108,496 |
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Intangible liabilities, net |
| 249,965 |
| 278,143 |
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Accounts payable and accrued liabilities |
| 224,680 |
| 233,752 |
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Deferred revenue |
| 64,841 |
| 55,990 |
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Total liabilities |
| 6,489,824 |
| 8,078,792 |
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Minority interests: |
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Joint venture partners |
| 17,430 |
| 33,436 |
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Non-managing member unitholders |
| 230,811 |
| 305,835 |
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Total minority interests |
| 248,241 |
| 339,271 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock |
| 285,173 |
| 285,173 |
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Common stock |
| 251,926 |
| 216,819 |
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Additional paid-in capital |
| 4,835,014 |
| 3,724,739 |
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Cumulative dividends in excess of earnings |
| (49,893 | ) | (120,920 | ) | ||
Accumulated other comprehensive loss |
| (28,881 | ) | (2,102 | ) | ||
Total stockholders’ equity |
| 5,293,339 |
| 4,103,709 |
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Total liabilities and stockholders’ equity |
| $ | 12,031,404 |
| $ | 12,521,772 |
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See Reporting Definitions and Supplemental Financial Measures Disclosures | |
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Consolidated Statements of Income (Unaudited)
In thousands, except per share data |
| Three Months Ended |
| Nine Months Ended |
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| 2008 |
| 2007 |
| 2008 |
| 2007 |
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Revenues: |
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Rental and related revenues |
| $ | 233,632 |
| $ | 205,585 |
| $ | 657,484 |
| $ | 554,031 |
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Tenant recoveries |
| 20,240 |
| 17,560 |
| 61,855 |
| 42,909 |
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Income from direct financing leases |
| 14,543 |
| 18,832 |
| 43,646 |
| 49,037 |
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Investment management fee income |
| 1,523 |
| 1,602 |
| 4,448 |
| 12,062 |
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Total revenues |
| 269,938 |
| 243,579 |
| 767,433 |
| 658,039 |
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Costs and expenses: |
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Depreciation and amortization |
| 77,659 |
| 70,418 |
| 233,920 |
| 184,132 |
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Operating |
| 49,846 |
| 49,914 |
| 146,506 |
| 127,457 |
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General and administrative |
| 17,541 |
| 16,499 |
| 56,913 |
| 53,894 |
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Impairments |
| 3,710 |
| — |
| 13,425 |
| — |
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Total costs and expenses |
| 148,756 |
| 136,831 |
| 450,764 |
| 365,483 |
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Other income (expense): |
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Gain on sale of real estate interest |
| — |
| — |
| — |
| 10,141 |
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Interest and other income, net |
| 62,312 |
| 21,538 |
| 128,378 |
| 54,724 |
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Interest expense |
| (83,249 | ) | (103,707 | ) | (265,054 | ) | (254,434 | ) | ||||
Total other income (expense) |
| (20,937 | ) | (82,169 | ) | (136,676 | ) | (189,569 | ) | ||||
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Income before income taxes, equity income from unconsolidated joint ventures and minority interests’ share in earnings |
| 100,245 |
| 24,579 |
| 179,993 |
| 102,987 |
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Income taxes |
| (866 | ) | 318 |
| (4,385 | ) | 860 |
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Equity income from unconsolidated joint ventures |
| 1,227 |
| 1,242 |
| 3,736 |
| 3,758 |
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Minority interests’ share in earnings |
| (5,803 | ) | (6,018 | ) | (17,055 | ) | (17,992 | ) | ||||
Income from continuing operations |
| 94,803 |
| 20,121 |
| 162,289 |
| 89,613 |
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Discontinued operations: |
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Income before gain on sales of real estate, net of income taxes |
| 3,198 |
| 15,874 |
| 18,025 |
| 56,838 |
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Gain on sales of real estate, net of income taxes |
| 27,416 |
| 286,153 |
| 227,810 |
| 392,269 |
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Total discontinued operations |
| 30,614 |
| 302,027 |
| 245,835 |
| 449,107 |
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Net income |
| 125,417 |
| 322,148 |
| 408,124 |
| 538,720 |
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Preferred stock dividends |
| (5,282 | ) | (5,282 | ) | (15,848 | ) | (15,848 | ) | ||||
Net income applicable to common shares |
| $ | 120,135 |
| $ | 316,866 |
| $ | 392,276 |
| $ | 522,872 |
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Basic earnings per common share: |
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Continuing operations |
| $ | 0.37 |
| $ | 0.07 |
| $ | 0.63 |
| $ | 0.36 |
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Discontinued operations |
| 0.12 |
| 1.47 |
| 1.06 |
| 2.19 |
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Net income applicable to common shares |
| $ | 0.49 |
| $ | 1.54 |
| $ | 1.69 |
| $ | 2.55 |
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Diluted earnings per common share: |
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Continuing operations |
| $ | 0.37 |
| $ | 0.07 |
| $ | 0.63 |
| $ | 0.36 |
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Discontinued operations |
| 0.12 |
| 1.46 |
| 1.05 |
| 2.17 |
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Net income applicable to common shares |
| $ | 0.49 |
| $ | 1.53 |
| $ | 1.68 |
| $ | 2.53 |
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Weighted average shares used to calculate earnings per common share: |
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Basic |
| 244,572 |
| 206,186 |
| 232,199 |
| 205,322 |
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Diluted |
| 245,906 |
| 207,070 |
| 233,391 |
| 206,672 |
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Dividends declared per common share |
| $ | 0.455 |
| $ | 0.445 |
| $ | 1.365 |
| $ | 1.335 |
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See Reporting Definitions and Supplemental Financial Measures Disclosures
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Consolidated Statements of Cash Flows (Unaudited)
In thousands
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| Nine Months Ended September |
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| 2008 |
| 2007 |
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Cash flows from operating activities: |
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Net income |
| $ | 408,124 |
| $ | 538,720 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization of real estate, in-place lease and other intangibles: |
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Continuing operations |
| 233,920 |
| 184,132 |
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Discontinued operations |
| 5,832 |
| 17,748 |
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Amortization of below market lease intangibles, net |
| (6,020 | ) | (3,185 | ) | ||
Stock-based compensation |
| 10,637 |
| 8,516 |
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Amortization of debt issuance costs |
| 9,226 |
| 15,274 |
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Recovery of loan losses |
| — |
| (386 | ) | ||
Straight-line rents |
| (28,645 | ) | (39,467 | ) | ||
Interest accretion |
| (20,134 | ) | (6,428 | ) | ||
Deferred rental revenue |
| 16,227 |
| 8,937 |
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Equity income from unconsolidated joint ventures |
| (3,736 | ) | (3,758 | ) | ||
Distributions of earnings from unconsolidated joint ventures |
| 3,736 |
| 3,148 |
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Minority interests’ share in earnings |
| 17,055 |
| 17,992 |
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Gains on sales of real estate and real estate interest |
| (227,810 | ) | (402,410 | ) | ||
Marketable securities losses (gains), net |
| 2,746 |
| (4,874 | ) | ||
Derivative losses, net |
| 1,803 |
| — |
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Impairments |
| 13,425 |
| — |
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Changes in: |
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Accounts receivable |
| 14,881 |
| (2,626 | ) | ||
Other assets |
| (6,660 | ) | (18,384 | ) | ||
Accounts payable and accrued liabilities |
| 10,776 |
| (3,128 | ) | ||
Net cash provided by operating activities |
| 455,383 |
| 309,821 |
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Cash flows from investing activities: |
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Cash used in acquisitions and development of real estate |
| (132,436 | ) | (339,692 | ) | ||
Lease commissions and tenant and capital improvements |
| (44,734 | ) | (27,029 | ) | ||
Proceeds from sales of real estate, net |
| 629,404 |
| 854,505 |
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Cash used in SEUSA acquisition, net of cash acquired |
| — |
| (2,977,564 | ) | ||
Contributions to unconsolidated joint ventures |
| (2,620 | ) | (2,619 | ) | ||
Distributions in excess of earnings from unconsolidated joint ventures |
| 8,727 |
| 476,992 |
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Purchase of marketable securities |
| (26,101 | ) | (26,647 | ) | ||
Proceeds from the sale of marketable securities |
| 10,700 |
| 53,514 |
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Proceeds from sales of interests in unconsolidated joint ventures |
| 2,855 |
| — |
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Principal repayments on loans receivable |
| 14,590 |
| 101,340 |
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Investment in loans receivable |
| (2,863 | ) | (18,615 | ) | ||
Increase in restricted cash |
| (883 | ) | (28,461 | ) | ||
Net cash provided by (used in) investing activities |
| 456,639 |
| (1,934,276 | ) | ||
See Reporting Definitions and Supplemental Financial Measures Disclosures
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| 6 |
Consolidated Statements of Cash Flows (Unaudited) (continued)
In thousands |
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| Nine Months Ended September |
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| 2008 |
| 2007 |
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Cash flows from financing activities: |
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Net repayments under bank line of credit |
| (951,700 | ) | (624,500 | ) | ||
Repayments of bridge and term loans |
| (830,000 | ) | (504,593 | ) | ||
Borrowings under bridge loan |
| — |
| 2,750,000 |
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Repayments of mortgage debt |
| (63,740 | ) | (82,482 | ) | ||
Issuance of mortgage debt |
| 579,078 |
| 143,421 |
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Repayments of senior unsecured notes |
| (300,000 | ) | (20,000 | ) | ||
Issuance of senior unsecured notes |
| — |
| 500,000 |
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Settlement of cash flow hedges |
| (9,658 | ) | — |
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Debt issuance costs |
| (10,068 | ) | (18,659 | ) | ||
Net proceeds from the issuance of common stock and exercise of options |
| 1,060,236 |
| 300,591 |
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Dividends paid on common and preferred stock |
| (337,097 | ) | (291,787 | ) | ||
Distributions to minority interests |
| (28,290 | ) | (17,088 | ) | ||
Net cash provided by (used in) financing activities |
| (891,239 | ) | 2,134,903 |
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Net increase in cash and cash equivalents |
| 20,783 |
| 510,448 |
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Cash and cash equivalents, beginning of period |
| 96,269 |
| 58,405 |
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Cash and cash equivalents, end of period |
| $ | 117,052 |
| $ | 568,853 |
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See Reporting Definitions and Supplemental Financial Measures Disclosures
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| 7 |
Consolidated Funds From Operations
Dollars in thousands, except per share data |
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| Three Months Ended |
| Nine Months Ended |
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| 2008 |
| 2007 |
| 2008 |
| 2007 |
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Net income applicable to common shares |
| $ | 120,135 |
| $ | 316,866 |
| $ | 392,276 |
| $ | 522,872 |
|
Depreciation and amortization of real estate, in-place lease and other intangibles: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 77,659 |
| 70,418 |
| 233,920 |
| 184,132 |
| ||||
Discontinued operations |
| 47 |
| 3,886 |
| 5,832 |
| 17,748 |
| ||||
Gains on sales of real estate and real estate interest |
| (27,416 | ) | (286,153 | ) | (227,810 | ) | (402,410 | ) | ||||
Equity income from unconsolidated joint ventures |
| (1,227 | ) | (1,242 | ) | (3,736 | ) | (3,758 | ) | ||||
FFO from unconsolidated joint ventures |
| 6,488 |
| 6,187 |
| 18,216 |
| 15,819 |
| ||||
Minority interests’ share in earnings |
| 5,803 |
| 6,018 |
| 17,055 |
| 17,992 |
| ||||
Minority interests’ share in FFO |
| (6,426 | ) | (6,973 | ) | (18,970 | ) | (20,545 | ) | ||||
FFO applicable to common shares |
| $ | 175,063 |
| $ | 109,007 |
| $ | 416,783 |
| $ | 331,850 |
|
|
|
|
|
|
|
|
|
|
| ||||
Distributions on convertible units |
| $ | 3,992 |
| $ | 2,606 |
| $ | 11,155 |
| $ | 10,087 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted FFO applicable to common shares |
| $ | 179,055 |
| $ | 111,613 |
| $ | 427,938 |
| $ | 341,937 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic FFO per common share |
| $ | 0.72 |
| $ | 0.53 |
| $ | 1.79 |
| $ | 1.62 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted FFO per common share |
| $ | 0.71 |
| $ | 0.52 |
| $ | 1.78 |
| $ | 1.60 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares used to calculate diluted FFO per common share |
| 253,956 |
| 212,920 |
| 240,988 |
| 213,947 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Dividends declared per common share |
| $ | 0.455 |
| $ | 0.445 |
| $ | 1.365 |
| $ | 1.335 |
|
|
|
|
|
|
|
|
|
|
| ||||
FFO payout ratio per common share |
| 64.1% |
| 85.6% |
| 76.7% |
| 83.4% |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Impact of merger-related charges and impairments |
| $ | 4,553 |
| $ | 9,078 |
| $ | 16,598 |
| $ | 18,057 |
|
|
|
|
|
|
|
|
|
|
| ||||
Per common share impact of merger-related charges and impairments on diluted FFO |
| $ | 0.01 |
| $ | 0.05 |
| $ | 0.06 |
| $ | 0.08 |
|
|
|
|
|
|
|
|
|
|
| ||||
FFO payout ratio per common share prior to merger-related charges and impairments |
| 63.2% |
| 78.1% |
| 74.2% |
| 79.5% |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Consolidated selected supplemental cash flow information: |
|
|
|
|
|
|
|
|
| ||||
Impairments |
| $ | 3,710 |
| $ | — |
| $ | 13,425 |
| $ | — |
|
Amortization of below market lease intangibles, net |
| 1,991 |
| 1,613 |
| 6,020 |
| 3,185 |
| ||||
Stock-based compensation |
| 3,152 |
| 2,674 |
| 10,637 |
| 8,516 |
| ||||
Amortization of debt issuance costs |
| 3,064 |
| 9,631 |
| 9,226 |
| 15,274 |
| ||||
Straight-line rents |
| 9,112 |
| 19,088 |
| 28,645 |
| 39,467 |
| ||||
Interest accretion |
| 7,108 |
| 2,265 |
| 20,134 |
| 6,428 |
| ||||
Increase in deferred revenues – tenant improvement related |
| 3,677 |
| 3,726 |
| 12,594 |
| 4,922 |
| ||||
Increase (decrease) in SAB 104 deferred revenue |
| (729 | ) | 1,540 |
| 3,633 |
| 4,015 |
| ||||
Lease commissions and tenant and capital improvements |
| 12,375 |
| 12,621 |
| 44,734 |
| 27,029 |
| ||||
Capitalized interest |
| 5,579 |
| 3,851 |
| 22,479 |
| 4,024 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
HCP’s share of selected supplemental cash flow information from investment management business: |
|
|
|
|
|
|
|
|
| ||||
Amortization of above market lease intangibles, net |
| $ | 257 |
| $ | 275 |
| $ | 781 |
| $ | 728 |
|
Amortization of debt issuance costs |
| 107 |
| 66 |
| 252 |
| 211 |
| ||||
Straight-line rents |
| 1,328 |
| 1,502 |
| 3,667 |
| 4,445 |
| ||||
Lease commissions and tenant and capital improvements |
| 501 |
| 312 |
| 1,303 |
| 391 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures
|
|
|
| 8 |
Capitalization |
| ||||||||||||||||||||||||
Dollars in thousands |
| ||||||||||||||||||||||||
Debt Maturities and Scheduled Principal Repayments |
| ||||||||||||||||||||||||
September 30, 2008 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| HCP’s Share of |
|
|
| ||||||||
|
|
|
|
|
| Senior |
|
|
|
|
|
|
| Unconsolidated |
|
|
| ||||||||
|
| Bank Line |
| Bridge |
| Unsecured |
| Mortgage |
| Other |
| Consolidated |
| Mortgage |
|
|
| ||||||||
|
| of Credit |
| Loan(1) |
| Notes |
| Debt |
| Debt(2) |
| Debt |
| Debt(3) |
| Total Debt |
| ||||||||
2008 (3 months) |
| $ | — |
| $ | — |
| $ | — |
| $ | 43,073 |
| $ | 102,602 |
| $ | 145,675 |
| $ | 1,262 |
| $ | 146,937 |
|
2009 |
| — |
| 320,000 |
| — |
| 274,169 |
| — |
| 594,169 |
| 5,205 |
| 599,374 |
| ||||||||
2010 |
| — |
| — |
| 206,421 |
| 298,453 |
| — |
| 504,874 |
| 5,546 |
| 510,420 |
| ||||||||
2011 |
| — |
| 200,000 |
| 300,000 |
| 137,310 |
| — |
| 637,310 |
| 6,224 |
| 643,534 |
| ||||||||
2012 |
| — |
| — |
| 250,000 |
| 108,625 |
| — |
| 358,625 |
| 13,560 |
| 372,185 |
| ||||||||
2013 |
| — |
| — |
| 550,000 |
| 185,544 |
| — |
| 735,544 |
| 44,508 |
| 780,052 |
| ||||||||
2014 |
| — |
| — |
| 87,000 |
| 175,288 |
| — |
| 262,288 |
| 4,364 |
| 266,652 |
| ||||||||
2015 |
| — |
| — |
| 400,000 |
| 279,178 |
| — |
| 679,178 |
| 15,070 |
| 694,248 |
| ||||||||
2016 |
| — |
| — |
| 400,000 |
| 215,748 |
| — |
| 615,748 |
| 217,843 |
| 833,591 |
| ||||||||
2017 |
| — |
| — |
| 750,000 |
| 22,798 |
| — |
| 772,798 |
| 34,780 |
| 807,578 |
| ||||||||
Thereafter |
| — |
| — |
| 600,000 |
| 59,348 |
| — |
| 659,348 |
| — |
| 659,348 |
| ||||||||
Subtotal |
| — |
| 520,000 |
| 3,543,421 |
| 1,799,534 |
| 102,602 |
| 5,965,557 |
| 348,362 |
| 6,313,919 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
(Discounts) and premiums, net |
| — |
| — |
| (20,732 | ) | 5,513 |
| — |
| (15,219 | ) | (661 | ) | (15,880 | ) | ||||||||
Total |
| $ | — |
| $ | 520,000 |
| $ | 3,522,689 |
| $ | 1,805,047 |
| $ | 102,602 |
| $ | 5,950,338 |
| $ | 347,701 |
| $ | 6,298,039 |
|
Weighted average interest rate |
| % |
| 3.38% |
| 6.25% |
| 6.02% |
| N/A |
| 5.93% |
| 5.70% |
| 5.91% |
| ||||||||
Weighted average maturity in years |
| — |
| 0.84 |
| 6.54 |
| 4.91 |
| N/A |
| 5.53 |
| 8.15 |
| 5.68 |
|
Capitalization Ratios |
| Variable Rate Debt |
| ||||||||||||||
|
| September 30, |
| December 31, |
|
|
|
|
|
|
| September 30, |
| December 31, |
| ||
|
| 2008 |
| 2007 |
|
|
|
|
|
|
| 2008 |
| 2007 |
| ||
Total Debt/Total Book Capitalization |
| 53.2% |
| 63.9% |
| Fixed and variable rate ratios |
|
|
|
|
| ||||||
Total Debt/Total Undepreciated Book Capitalization |
| 49.1% |
| 59.8% |
|
|
|
|
| 88.2% |
| 64.1% |
| ||||
|
|
|
|
|
|
|
| Fixed rate |
| 11.8% |
| 35.9% |
| ||||
Consolidated Debt/Consolidated Gross Assets |
| 46.8% |
| 57.3% |
| Variable rate |
| 100.0% |
| 100.0% |
| ||||||
Financial Leverage (Total Debt/Total Gross Assets) |
| 47.3% |
| 57.4% |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Secured Debt/Consolidated Gross Assets |
| 14.2% |
| 9.7% |
|
|
|
|
|
|
|
|
|
|
| ||
Total Secured Debt/Total Gross Assets |
| 16.2% |
| 11.8% |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Debt/Consolidated Market Capitalization |
| 35.8% |
| 48.0% |
|
|
|
|
|
|
|
|
|
|
| ||
Total Debt/Total Market Capitalization |
| 37.2% |
| 49.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | On October 24, 2008, the Company entered into a credit agreement with a syndicate of banks for a $200 million term loan. The above table reflects the reclassification of the portion of the bridge loan that was repaid with proceeds from the term loan, which matures on August 1, 2011. |
(2) | The Company has non-interest bearing Life Care Bonds at two of its CCRCs and non-interest bearing occupancy fee deposits at another of its senior housing facilities. |
(3) | Includes pro-rata share of the Company’s unconsolidated institutional joint ventures of the investment management business. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
| |||||||||||
|
|
|
|
|
|
|
|
|
| 9 |
Investments and Dispositions
As of and for the nine months ended September 30, 2008, dollars in thousands | ||||||||||
Investments |
| |||||||||
Description |
| Capacity |
| Property Count |
| Segment |
| Investment |
| |
Property acquisition: |
|
|
|
|
|
|
|
|
| |
First quarter |
|
|
|
|
|
|
|
|
| |
Orangevale, CA |
| 104 units |
| 1 |
| Senior housing |
| $ | 10,878 |
|
|
|
|
|
|
|
|
|
|
| |
Weighted average yield on property acquisition |
|
|
|
|
|
|
| 8.5% |
| |
Joint venture interest acquisition |
|
|
|
|
| Hospital/Skilled nursing |
| $ | 29,137 |
|
|
|
|
|
|
|
|
|
|
| |
Total fundings for development, tenant and capital improvements |
|
|
|
|
|
|
| $ | 126,129 |
|
|
|
|
|
|
|
|
|
|
| |
Total marketable securities purchased |
|
|
|
|
|
|
| $ | 26,101 |
|
|
|
|
|
|
|
|
|
|
| |
Total investments |
|
|
|
|
|
|
| $ | 192,245 |
|
Dispositions |
| |||||||||
Description |
| Capacity |
| Property Count |
| Segment |
| Sales Price, |
| |
Property dispositions: |
|
|
|
|
|
|
|
|
| |
First quarter |
|
|
|
|
|
|
|
|
| |
Various |
| 450 beds |
| 3 |
| Skilled nursing |
| $ | 26,775 |
|
Arlington, TX |
| 80 units |
| 1 |
| Senior housing |
| 2,875 |
| |
|
|
|
|
|
|
|
| 29,650 |
| |
Second quarter |
|
|
|
|
|
|
|
|
| |
Various |
| 1,103 beds |
| 12 |
| Hospital |
| 310,518 |
| |
Various |
| N/A |
| 6 |
| Senior housing |
| 15,301 |
| |
Various |
| 689,286 Sq. Ft. |
| 13 |
| MOB |
| 86,970 |
| |
Various |
| 937 beds |
| 9 |
| Skilled nursing |
| 70,444 |
| |
|
|
|
|
|
|
|
| 483,233 |
| |
Third quarter |
|
|
|
|
|
|
|
|
| |
Various |
| 345 beds |
| 3 |
| Hospital |
| 116,521 |
| |
|
|
|
|
|
|
|
|
|
| |
Total property dispositions |
|
|
|
|
|
|
| $ | 629,404 |
|
|
|
|
|
|
|
|
|
|
| |
Joint venture interest dispositions: |
|
|
|
|
|
|
|
|
| |
Various |
| 104 units |
| 2 |
| Senior housing |
| $ | 2,855 |
|
|
|
|
|
|
|
|
|
|
| |
Total marketable securities sold |
|
|
|
|
|
|
| $ | 10,700 |
|
|
|
|
|
|
|
|
|
|
| |
Total dispositions |
|
|
|
|
|
|
| $ | 642,959 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
10 |
Development
As of September 30, 2008, dollars and square feet in thousands | ||||||||||||
Development Projects in Process |
| |||||||||||
|
|
|
|
|
|
|
|
|
| Estimated |
| |
|
|
|
|
|
| Estimated |
| Rent |
| Rentable |
| |
|
|
|
|
|
| Completion |
| Commencement |
| Square |
| |
Name of Project |
| Location |
| Segment |
| Date |
| Date |
| Feet |
| |
Oyster Point II (Building A) |
| So. San Francisco, CA |
| Life science |
| 4Q 2008 |
| 4Q 2008 |
| 122 |
| |
Oyster Point II (Building B) |
| So. San Francisco, CA |
| Life science |
| 4Q 2008 |
| 1Q 2009 |
| 129 |
| |
Oyster Point II (Building C) |
| So. San Francisco, CA |
| Life science |
| 4Q 2008 |
| N/A |
| 78 |
| |
|
|
|
|
|
|
|
|
|
| 329 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Redevelopment |
|
|
|
|
|
|
|
|
|
|
| |
500/600 Saginaw |
| So. San Francisco, CA |
| Life science |
| 4Q 2009 |
| N/A |
| 89 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Estimated total investment |
|
|
|
|
|
|
| $ | 307,214 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Investment-to-date(1) |
|
|
|
|
|
|
| $ | 237,050 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Percentage pre-leased |
|
|
|
|
|
|
| 60% |
|
Land Held for Future Development |
| ||||||||
|
|
|
|
|
|
|
| Estimated |
|
|
|
|
|
|
|
|
| Rentable |
|
|
|
|
|
|
| Gross Site |
| Square |
|
Name of Project |
| Location |
| Segment |
| Acreage |
| Feet |
|
Forbes Research Center |
| So. San Francisco, CA |
| Life science |
| 7 |
| 326 |
|
Sierra Point |
| So. San Francisco, CA |
| Life science |
| 23 |
| 540 |
|
Bressi I |
| Carlsbad, CA |
| Life science |
| 23 |
| 397 |
|
Bressi II |
| Carlsbad, CA |
| Life science |
| 18 |
| 300 |
|
Poway I |
| Poway, CA |
| Life science |
| 41 |
| 676 |
|
Poway II |
| Poway, CA |
| Life science |
| 31 |
| 585 |
|
Torrey Pines Science Center |
| Torrey Pines, CA |
| Life science |
| 6 |
| 93 |
|
|
|
|
|
|
| 149 |
| 2,917 |
|
Projects Placed in Service |
| ||||||||
|
|
|
|
|
| Date |
| Rentable |
|
|
|
|
|
|
| Placed in |
| Square |
|
Name of Project |
| Location |
| Segment |
| Service |
| Feet |
|
East Grand (Building 8) |
| So. San Francisco, CA |
| Life science |
| 2Q 2008 |
| 82 |
|
East Grand (Building 7) |
| So. San Francisco, CA |
| Life science |
| 3Q 2008 |
| 93 |
|
East Grand (Building 9) |
| So. San Francisco, CA |
| Life science |
| 3Q 2008 |
| 54 |
|
(1) | Investment-to-date includes $42 million of land, $24 million of buildings and $12 million of net intangible assets, which are not included in development costs and construction in progress on the Company’s consolidated balance sheet. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
11 |
Investment Management Business
As of and for the nine months ended September 30, 2008
Dollars in thousands
|
|
|
|
|
|
|
|
|
|
|
| HCP’s |
|
|
| |||
|
|
|
| Date |
| HCP’s |
| Joint |
| HCP’s Net |
| Investment |
| Initial |
| |||
|
| Primary |
| Established/ |
| Ownership |
| Venture’s |
| Equity |
| Management |
| Term (in |
| |||
Unconsolidated Institutional Joint Ventures |
| Segment |
| Acquired |
| Percentage |
| Investment |
| Investment |
| Fee Income |
| years) |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
HCP Ventures II |
| Senior housing |
| January-07 |
| 35% |
| $ | 1,097,267 |
| $ | 141,384 |
| $ | 2,457 |
| Indefinite |
|
HCP Ventures III |
| Medical office |
| October-06 |
| 30%(1) |
| 140,617 |
| 12,159 |
| 332 |
| 10 |
| |||
HCP Ventures IV |
| Medical office |
| April-07 |
| 20% |
| 650,920 |
| 46,417 |
| 1,656 |
| 10 |
| |||
HCP Life Science |
| Life Science |
| August-07 |
| 50%-63% |
| 79,846 |
| 68,017 |
| 3 |
| 97-98 |
| |||
|
|
|
|
|
|
|
| $ | 1,968,650 |
| $ | 267,977 |
| $ | 4,448 |
|
|
|
| |
(1) The Company owns an 85% interest in HCP Birmingham Portfolio LLC, which owns a 30% interest in HCP Ventures III. | |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
12 |
Investment Management Business |
| ||||||||||||||||||||||||
In thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Funds From Operations |
| ||||||||||||||||||||||||
|
| Three Months Ended September 30, 2008 |
| Three Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Net income (loss) |
| $ | 2,029 |
| $ | 60 |
| $ | (1,874 | ) | $ | 1,231 |
| $ | 2,457 |
| $ | 140 |
| $ | (2,435 | ) | $ | 605 |
|
Depreciation and amortization of real estate and in-place lease intangibles |
| 7,142 |
| 1,267 |
| 6,383 |
| 571 |
| 7,141 |
| 1,235 |
| 6,242 |
| 376 |
| ||||||||
FFO |
| $ | 9,171 |
| $ | 1,327 |
| $ | 4,509 |
| $ | 1,802 |
| $ | 9,598 |
| $ | 1,375 |
| $ | 3,807 |
| $ | 981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
HCP’s share of FFO from unconsolidated joint ventures |
| $ | 3,210 |
| $ | 398 |
| $ | 902 |
| $ | 1,033 |
| $ | 3,359 |
| $ | 413 |
| $ | 761 |
| $ | 575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Selected supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Amortization of above and (below) market lease intangibles, net |
| $ | 697 |
| $ | (142 | ) | $ | 280 |
| $ | — |
| $ | 697 |
| $ | (142 | ) | $ | 367 |
| $ | — |
|
Amortization of debt issuance costs |
| 239 |
| 38 |
| 43 |
| 7 |
| 155 |
| 38 |
| — |
| — |
| ||||||||
Straight-line rents |
| 3,128 |
| 92 |
| 1,211 |
| (58 | ) | 3,824 |
| 119 |
| 677 |
| (9 | ) | ||||||||
Lease commissions and tenant and capital improvements |
| — |
| 17 |
| 2,369 |
| 44 |
| — |
| 129 |
| 1,368 |
| — |
|
|
| Nine Months Ended September 30, 2008 |
| Nine Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Net income (loss) |
| $ | 7,266 |
| $ | 394 |
| $ | (6,406 | ) | $ | 3,538 |
| $ | 7,576 |
| $ | 582 |
| $ | (3,432 | ) | $ | 605 |
|
Depreciation and amortization of real estate and in-place lease intangibles |
| 21,424 |
| 3,783 |
| 19,317 |
| 1,708 |
| 21,403 |
| 3,452 |
| 10,333 |
| 376 |
| ||||||||
FFO |
| $ | 28,690 |
| $ | 4,177 |
| $ | 12,911 |
| $ | 5,246 |
| $ | 28,979 |
| $ | 4,034 |
| $ | 6,901 |
| $ | 981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
HCP’s share of FFO from unconsolidated joint ventures |
| $ | 10,042 |
| $ | 1,253 |
| $ | 2,582 |
| $ | 3,013 |
| $ | 10,143 |
| $ | 1,210 |
| $ | 1,380 |
| $ | 575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Selected supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Amortization of above and (below) market lease intangibles, net |
| $ | 2,091 |
| $ | (426 | ) | $ | 887 |
| $ | — |
| $ | 2,091 |
| $ | (426 | ) | $ | 618 |
| $ | — |
|
Amortization of debt issuance costs |
| 498 |
| 114 |
| 130 |
| 31 |
| 450 |
| 114 |
| 94 |
| — |
| ||||||||
Straight-line rents |
| 9,384 |
| 265 |
| 2,115 |
| (145 | ) | 11,473 |
| 564 |
| 1,336 |
| (9 | ) | ||||||||
Lease commissions and tenant and capital improvements |
| — |
| 27 |
| 4,698 |
| 710 |
| — |
| 151 |
| 1,730 |
| — |
|
(1) Acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007.
(2) At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent five months of operations.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
| 13 |
Investment Management Business | |||||||||||||||||||||||||
In thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balance Sheets |
| ||||||||||||||||||||||||
|
| September 30, 2008 |
| December 31, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Buildings and improvements |
| $ | 936,095 |
| $ | 129,719 |
| $ | 519,915 |
| $ | 43,124 |
| $ | 936,095 |
| $ | 129,144 |
| $ | 515,520 |
| $ | 43,118 |
|
Development costs and construction in progress |
| — |
| 24 |
| 2,689 |
| 486 |
| — |
| 551 |
| 4,709 |
| — |
| ||||||||
Land |
| 108,907 |
| 1,780 |
| 65,860 |
| 8,271 |
| 108,907 |
| 1,780 |
| 65,698 |
| 8,271 |
| ||||||||
Less accumulated depreciation and amortization |
| 54,344 |
| 8,574 |
| 32,103 |
| 24,360 |
| 33,965 |
| 6,092 |
| 19,384 |
| 22,761 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net real estate |
| 990,658 |
| 122,949 |
| 556,361 |
| 27,521 |
| 1,011,037 |
| 125,383 |
| 566,543 |
| 28,628 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash and cash equivalents and restricted cash |
| 9,357 |
| 2,700 |
| 16,482 |
| 1,641 |
| 6,998 |
| 850 |
| 13,937 |
| 1,342 |
| ||||||||
Other assets, net |
| 33,960 |
| 3,417 |
| 11,862 |
| 8,419 |
| 25,434 |
| 4,346 |
| 8,264 |
| 8,752 |
| ||||||||
Intangible assets, net |
| 45,105 |
| 11,033 |
| 54,491 |
| — |
| 48,321 |
| 12,397 |
| 62,755 |
| — |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total assets |
| $ | 1,079,080 |
| $ | 140,099 |
| $ | 639,196 |
| $ | 37,581 |
| $ | 1,091,790 |
| $ | 142,976 |
| $ | 651,499 |
| $ | 38,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
LIABILITIES AND PARTNERS’ CAPITAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Mortgage debt |
| $ | 671,245 |
| $ | 91,730 |
| $ | 378,567 |
| $ | 16,534 |
| $ | 677,764 |
| $ | 91,730 |
| $ | 378,842 |
| $ | 19,019 |
|
Intangible liabilities, net |
| 1,202 |
| 5,090 |
| 11,825 |
| — |
| 1,282 |
| 5,581 |
| 12,925 |
| — |
| ||||||||
Accounts payable, accrued liabilities and deferred revenue |
| 8,259 |
| 2,778 |
| 16,720 |
| 1,314 |
| 7,082 |
| 2,063 |
| 15,138 |
| 1,296 |
| ||||||||
Total liabilities |
| 680,706 |
| 99,598 |
| 407,112 |
| 17,848 |
| 686,128 |
| 99,374 |
| 406,905 |
| 20,315 |
| ||||||||
HCP’s capital |
| 136,670 |
| 10,538 |
| 35,074 |
| 11,354 |
| 139,248 |
| 11,468 |
| 38,778 |
| 10,733 |
| ||||||||
Partners’ capital |
| 261,704 |
| 29,963 |
| 197,010 |
| 8,379 |
| 266,414 |
| 32,134 |
| 205,816 |
| 7,674 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total liabilities and members’ capital |
| $ | 1,079,080 |
| $ | 140,099 |
| $ | 639,196 |
| $ | 37,581 |
| $ | 1,091,790 |
| $ | 142,976 |
| $ | 651,499 |
| $ | 38,722 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
| 14 |
Investment Management Business
In thousands |
|
|
|
|
| ||||||||||||||||||||
|
| Statements of Operations |
|
|
| ||||||||||||||||||||
|
| Three Months Ended September 30, 2008 |
| Three Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Rental and related revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental and related revenues |
| $ | 20,832 |
| $ | 3,339 |
| $ | 15,079 |
| $ | 2,093 |
| $ | 20,899 |
| $ | 3,409 |
| $ | 13,689 |
| $ | 1,261 |
|
Tenant recoveries |
| — |
| 1,093 |
| 2,952 |
| 177 |
| — |
| 1,143 |
| 2,646 |
| 150 |
| ||||||||
Total revenues |
| 20,832 |
| 4,432 |
| 18,031 |
| 2,270 |
| 20,889 |
| 4,552 |
| 16,335 |
| 1,411 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
| 7,142 |
| 1,267 |
| 6,383 |
| 571 |
| 7,141 |
| 1,235 |
| 6,242 |
| 376 |
| ||||||||
Operating |
| — |
| 1,459 |
| 7,084 |
| 161 |
| 8 |
| 1,537 |
| 6,600 |
| 198 |
| ||||||||
General and administrative |
| 1,685 |
| 206 |
| 949 |
| 4 |
| 1,292 |
| 158 |
| 663 |
| 2 |
| ||||||||
Total costs and expenses |
| 8,827 |
| 2,932 |
| 14,416 |
| 736 |
| 8,441 |
| 2,930 |
| 13,505 |
| 576 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest and other income, net |
| 16 |
| 9 |
| 65 |
| — |
| 2 |
| — |
| — |
| 8 |
| ||||||||
Interest expense |
| (9,992 | ) | (1,449 | ) | (5,554 | ) | (303 | ) | (10,003 | ) | (1,482 | ) | (5,265 | ) | (238 | ) | ||||||||
Net income (loss) |
| $ | 2,029 |
| $ | 60 |
| $ | (1,874 | ) | $ | 1,231 |
| $ | 2,457 |
| $ | 140 |
| $ | (2,435 | ) | $ | 605 |
|
|
| Nine Months Ended September 30, 2008 |
| Nine Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Rental and related revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental and related revenues |
| $ | 62,582 |
| $ | 10,176 |
| $ | 43,567 |
| $ | 6,366 |
| $ | 62,410 |
| $ | 10,077 |
| $ | 22,777 |
| $ | 1,261 |
|
Tenant recoveries |
| — |
| 3,452 |
| 8,891 |
| 1,280 |
| — |
| 3,442 |
| 4,321 |
| 150 |
| ||||||||
Total revenues |
| 62,582 |
| 13,628 |
| 52,458 |
| 7,646 |
| 62,410 |
| 13,519 |
| 27,098 |
| 1,411 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
| 21,424 |
| 3,783 |
| 19,317 |
| 1,708 |
| 21,403 |
| 3,452 |
| 10,333 |
| 376 |
| ||||||||
Operating |
| 4 |
| 4,554 |
| 20,560 |
| 1,398 |
| 8 |
| 4,585 |
| 10,549 |
| 198 |
| ||||||||
General and administrative |
| 4,317 |
| 608 |
| 2,526 |
| 53 |
| 3,664 |
| 548 |
| 1,091 |
| 2 |
| ||||||||
Total costs and expenses |
| 25,745 |
| 8,945 |
| 42,403 |
| 3,159 |
| 25,075 |
| 8,585 |
| 21,973 |
| 576 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest and other income, net |
| 58 |
| 28 |
| 148 |
| 11 |
| 2 |
| — |
| — |
| 8 |
| ||||||||
Interest expense |
| (29,629 | ) | (4,317 | ) | (16,609 | ) | (960 | ) | (29,761 | ) | (4,352 | ) | (8,557 | ) | (238 | ) | ||||||||
Net income (loss) |
| $ | 7,266 |
| $ | 394 |
| $ | (6,406 | ) | $ | 3,538 |
| $ | 7,576 |
| $ | 582 |
| $ | (3,432 | ) | $ | 605 |
|
|
|
|
(1) |
| Acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007. |
(2) |
| At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent five months of operations. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
| 15 |
Investment Management Business
In thousands |
|
|
|
|
| ||||||||||||||||||||
|
| Net Operating Income |
|
|
| ||||||||||||||||||||
|
| Three Months Ended September 30, 2008 |
| Three Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Net income (loss) |
| $ | 2,029 |
| $ | 60 |
| $ | (1,874 | ) | $ | 1,231 |
| $ | 2,457 |
| $ | 140 |
| $ | (2,435 | ) | $ | 605 |
|
Depreciation and amortization |
| 7,142 |
| 1,267 |
| 6,383 |
| 571 |
| 7,141 |
| 1,235 |
| 6,242 |
| 376 |
| ||||||||
General and administrative |
| 1,685 |
| 206 |
| 949 |
| 4 |
| 1,292 |
| 158 |
| 663 |
| 2 |
| ||||||||
Interest and other income, net |
| (16 | ) | (9 | ) | (65 | ) | — |
| (2 | ) | — |
| — |
| (8 | ) | ||||||||
Interest expense |
| 9,992 |
| 1,449 |
| 5,554 |
| 303 |
| 10,003 |
| 1,482 |
| 5,265 |
| 238 |
| ||||||||
NOI |
| $ | 20,832 |
| $ | 2,973 |
| $ | 10,947 |
| $ | 2,109 |
| $ | 20,891 |
| $ | 3,015 |
| $ | 9,735 |
| $ | 1,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
HCP’s share of NOI from unconsolidated joint ventures |
| $ | 7,291 |
| $ | 892 |
| $ | 2,189 |
| $ | 1,210 |
| $ | 7,312 |
| $ | 905 |
| $ | 1,947 |
| $ | 711 |
|
|
| Nine Months Ended September 30, 2008 |
| Nine Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Net income (loss) |
| $ | 7,266 |
| $ | 394 |
| $ | (6,406 | ) | $ | 3,538 |
| $ | 7,576 |
| $ | 582 |
| $ | (3,432 | ) | $ | 605 |
|
Depreciation and amortization |
| 21,424 |
| 3,783 |
| 19,317 |
| 1,708 |
| 21,403 |
| 3,452 |
| 10,333 |
| 376 |
| ||||||||
General and administrative |
| 4,317 |
| 608 |
| 2,526 |
| 53 |
| 3,664 |
| 548 |
| 1,091 |
| 2 |
| ||||||||
Interest and other income, net |
| (58 | ) | (28 | ) | (148 | ) | (11 | ) | (2 | ) | — |
| — |
| (8 | ) | ||||||||
Interest expense |
| 29,629 |
| 4,317 |
| 16,609 |
| 960 |
| 29,761 |
| 4,352 |
| 8,557 |
| 238 |
| ||||||||
NOI |
| $ | 62,578 |
| $ | 9,074 |
| $ | 31,898 |
| $ | 6,248 |
| $ | 62,402 |
| $ | 8,934 |
| $ | 16,549 |
| $ | 1,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
HCP’s share of NOI from unconsolidated joint ventures |
| $ | 21,902 |
| $ | 2,722 |
| $ | 6,380 |
| $ | 3,590 |
| $ | 21,841 |
| $ | 2,680 |
| $ | 3,310 |
| $ | 711 |
|
|
|
|
(1) |
| Acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007. |
(2) |
| At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent five months of operations. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
| 16 |
Investment Management Business
In thousands |
|
|
|
|
| ||||||||||||||||||||
|
| EBITDA |
|
|
| ||||||||||||||||||||
|
| Three Months Ended September 30, 2008 |
| Three Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Net income (loss) |
| $ | 2,029 |
| $ | 60 |
| $ | (1,874 | ) | $ | 1,231 |
| $ | 2,457 |
| $ | 140 |
| $ | (2,435 | ) | $ | 605 |
|
Depreciation and amortization |
| 7,142 |
| 1,267 |
| 6,383 |
| 571 |
| 7,141 |
| 1,235 |
| 6,242 |
| 376 |
| ||||||||
Interest expense |
| 9,992 |
| 1,449 |
| 5,554 |
| 303 |
| 10,003 |
| 1,482 |
| 5,265 |
| 238 |
| ||||||||
EBITDA |
| $ | 19,163 |
| $ | 2,776 |
| $ | 10,063 |
| $ | 2,105 |
| $ | 19,601 |
| $ | 2,857 |
| $ | 9,072 |
| $ | 1,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
HCP’s share of EBITDA from unconsolidated joint ventures |
| $ | 6,707 |
| $ | 833 |
| $ | 2,013 |
| $ | 1,207 |
| $ | 6,860 |
| $ | 857 |
| $ | 1,814 |
| $ | 715 |
|
|
| Nine Months Ended September 30, 2008 |
| Nine Months Ended September 30, 2007 |
| ||||||||||||||||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| HCP |
| ||||||||
Net income (loss) |
| $ | 7,266 |
| $ | 394 |
| $ | (6,406 | ) | $ | 3,538 |
| $ | 7,576 |
| $ | 582 |
| $ | (3,432 | ) | $ | 605 |
|
Depreciation and amortization |
| 21,424 |
| 3,783 |
| 19,317 |
| 1,708 |
| 21,403 |
| 3,452 |
| 10,333 |
| 376 |
| ||||||||
Interest expense |
| 29,629 |
| 4,317 |
| 16,609 |
| 960 |
| 29,761 |
| 4,352 |
| 8,557 |
| 238 |
| ||||||||
EBITDA |
| $ | 58,319 |
| $ | 8,494 |
| $ | 29,520 |
| $ | 6,206 |
| $ | 58,740 |
| $ | 8,386 |
| $ | 15,458 |
| $ | 1,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
HCP’s share of EBITDA from unconsolidated joint ventures |
| $ | 20,412 |
| $ | 2,548 |
| $ | 5,904 |
| $ | 3,566 |
| $ | 20,559 |
| $ | 2,516 |
| $ | 3,092 |
| $ | 715 |
|
|
|
|
(1) |
| Acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007. |
(2) |
| At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent five months of operations. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
| 17 |
Investment Management Business
In thousands |
|
|
| ||||||||||||||||
Mortgage Debt Maturities and Scheduled Principal Repayments |
| ||||||||||||||||||
September 30, 2008 |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| HCP’s Share |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| Unconsolidated |
| ||||||
|
| HCP |
| HCP |
| HCP |
| HCP |
|
|
| Mortgage |
| ||||||
|
| Ventures II |
| Ventures III |
| Ventures IV |
| Life Science |
| Total |
| Debt |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
2008 (3 months) |
| $ | 2,333 |
| $ | — |
| $ | 227 |
| $ | 689 |
| $ | 3,249 |
| $ | 1,262 |
|
2009 |
| 9,567 |
| — |
| 936 |
| 2,877 |
| 13,380 |
| 5,205 |
| ||||||
2010 |
| 10,130 |
| — |
| 1,048 |
| 3,086 |
| 14,264 |
| 5,546 |
| ||||||
2011 |
| 10,726 |
| — |
| 2,743 |
| 3,309 |
| 16,778 |
| 6,224 |
| ||||||
2012 |
| 11,254 |
| — |
| 37,806 |
| 3,548 |
| 52,608 |
| 13,560 |
| ||||||
2013 |
| 118,124 |
| — |
| 8,451 |
| 2,630 |
| 129,205 |
| 44,508 |
| ||||||
2014 |
| 10,359 |
| — |
| 2,606 |
| 395 |
| 13,360 |
| 4,364 |
| ||||||
2015 |
| 10,969 |
| — |
| 56,156 |
| — |
| 67,125 |
| 15,070 |
| ||||||
2016 |
| 488,305 |
| 91,730 |
| 97,085 |
| — |
| 677,120 |
| 217,843 |
| ||||||
2017 |
| — |
| — |
| 173,898 |
| — |
| 173,898 |
| 34,780 |
| ||||||
Subtotal |
| 671,767 |
| 91,730 |
| 380,956 |
| 16,534 |
| 1,160,987 |
| 348,362 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Discounts, net |
| (522 | ) | — |
| (2,389 | ) | — |
| (2,911 | ) | (661 | ) | ||||||
Total debt |
| $ | 671,245 |
| $ | 91,730 |
| $ | 378,567 |
| $ | 16,534 |
| $ | 1,158,076 |
| $ | 347,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
HCP’s share of total debt |
| $ | 234,936 |
| $ | 27,519 |
| $ | 75,713 |
| $ | 9,533 |
| $ | 347,701 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average interest rate(1) |
| 5.66% |
| 6.02% |
| 5.56% |
| 6.99% |
| 5.67% |
| 5.70% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average maturity in years |
| 8.50 |
| 7.78 |
| 7.59 |
| 5.04 |
| 8.15 |
|
|
|
(1) Mortgage debt is 100% fixed rate debt.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
18 |
Consolidated Portfolio
As of and for the nine months ended September 30, 2008, dollars and square feet in thousands
Consolidated Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Property |
|
|
| Average |
|
|
|
|
|
|
| EBITDAR |
| EBITDARM |
| |
Segment |
| Count |
| Investment |
| Age (Years) |
| Capacity |
| Occupancy % |
| CFC/DSC |
| CFC/DSC |
| |||
Senior housing |
| 240 |
| $ | 4,151,621 |
| 12 |
| 25,831 |
| Units |
| 89.7 |
| 1.16 x |
| 1.40 x |
|
Life science |
| 99 |
| 2,822,043 |
| 15 |
| 6,232 |
| Sq. Ft. |
| 89.1 |
| N/A |
| N/A |
| |
Medical office |
| 190 |
| 2,162,655 |
| 17 |
| 13,145 |
| Sq. Ft. |
| 90.2 |
| N/A |
| N/A |
| |
Hospital |
| 21 |
| 1,082,931 |
| 22 |
| 2,763 |
| Beds |
| 56.0 |
| 2.49 x |
| 2.92 x |
| |
Skilled nursing |
| 51 |
| 1,172,497 |
| 23 |
| 6,123 |
| Beds |
| 85.9 |
| 1.52 x |
| 2.08 x |
| |
|
| 601 |
| $ | 11,391,747 |
| 15 |
|
|
|
|
|
|
|
|
|
|
|
Portfolio Diversification |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Relationship Concentration |
|
| Geographic Concentration(1) |
| |||||||||||||||||||
|
| Annualized Revenues |
|
|
|
| Investment |
| Rental Revenues |
| Interest |
| Operating |
| |||||||||
Company |
| Amount |
| % |
|
| State |
| Amount |
| % |
| DFL Income |
| Income |
| Expenses |
| |||||
Sunrise Senior Living |
| $ | 145,256 |
| 15 |
|
| CA |
| $ | 3,744,664 |
| 37 |
| $ | 246,210 |
| $ | 219 |
| $ | 44,931 |
|
HCR ManorCare |
| 81,531 |
| 8 |
|
| TX |
| 1,275,292 |
| 12 |
| 115,319 |
| 2,705 |
| 36,313 |
| |||||
HCA |
| 65,507 |
| 7 |
|
| FL |
| 682,551 |
| 7 |
| 55,756 |
| — |
| 10,406 |
| |||||
Brookdale |
| 59,117 |
| 6 |
|
| CO |
| 393,561 |
| 4 |
| 30,454 |
| 1,142 |
| 8,414 |
| |||||
Genentech |
| 33,425 |
| 3 |
|
| VA |
| 383,306 |
| 4 |
| 22,671 |
| — |
| 1,243 |
| |||||
Tenet Healthcare Corporation |
| 32,952 |
| 3 |
|
| WA |
| 307,749 |
| 3 |
| 26,921 |
| — |
| 7,966 |
| |||||
Amgen |
| 25,118 |
| 3 |
|
| NJ |
| 280,589 |
| 3 |
| 14,710 |
| — |
| — |
| |||||
Emeritus Corporation |
| 24,612 |
| 3 |
|
| UT |
| 253,312 |
| 2 |
| 23,825 |
| — |
| 4,774 |
| |||||
Cirrus Health |
| 20,566 |
| 2 |
|
| MD |
| 210,996 |
| 2 |
| 14,918 |
| — |
| 1,176 |
| |||||
Aegis Senior Living |
| 19,980 |
| 2 |
|
| Other |
| 2,614,892 |
| 26 |
| 212,201 |
| 381 |
| 31,283 |
| |||||
Kindred |
| 15,683 |
| 2 |
|
|
|
| $ | 10,146,912 |
| 100 |
| $ | 762,985 |
| $ | 4,447 |
| $ | 146,506 |
| |
Other |
| 440,130 |
| 46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| $ | 963,877 |
| 100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Geographic concentration excludes Mezzanine Loans and Other Debt Investments as the investment and revenues associated with those assets cannot be allocated to a particular geographic region.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
| 19 |
Consolidated Portfolio
In thousands |
|
|
| ||||||||||
|
|
|
| ||||||||||
Consolidated Portfolio |
|
|
| ||||||||||
|
| Three Months Ended September 30, 2008 |
| ||||||||||
|
| Rental |
|
|
|
|
|
|
| ||||
Segment |
| & DFL |
| Operating |
| NOI |
| Interest |
| ||||
Senior housing |
| $ | 85,697 |
| $ | 3,530 |
| $ | 82,167 |
| $ | 311 |
|
Life science |
| 73,510 |
| 9,749 |
| 63,761 |
| — |
| ||||
Medical office |
| 78,028 |
| 35,727 |
| 42,301 |
| — |
| ||||
Hospital |
| 22,019 |
| 840 |
| 21,179 |
| 11,074 |
| ||||
Skilled nursing |
| 9,161 |
| — |
| 9,161 |
| 20,811 |
| ||||
|
| $ | 268,415 |
| $ | 49,846 |
| $ | 218,569 |
| $ | 32,196 |
|
|
| Nine Months Ended September 30, 2008 |
| ||||||||||
|
| Rental |
|
|
|
|
|
|
| ||||
Segment |
| & DFL |
| Operating |
| NOI |
| Interest |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Senior housing |
| $ | 256,097 |
| $ | 10,343 |
| $ | 245,754 |
| $ | 914 |
|
Life science |
| 180,707 |
| 31,414 |
| 149,293 |
| — |
| ||||
Medical office |
| 232,418 |
| 101,968 |
| 130,450 |
| — |
| ||||
Hospital |
| 66,794 |
| 2,781 |
| 64,013 |
| 33,344 |
| ||||
Skilled nursing |
| 26,969 |
| — |
| 26,969 |
| 64,797 |
| ||||
|
| $ | 762,985 |
| $ | 146,506 |
| $ | 616,479 |
| $ | 99,055 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
20 |
Consolidated Portfolio |
As of and for the nine months ended September 30, 2008, dollars and square feet in thousands
Owned Property Portfolio
|
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||||
Segment |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Capacity |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC |
| ||||||
Senior housing |
| 207 |
| $ | 3,503,918 |
| $ | 212,451 |
| $ | 10,343 |
| 12 |
| 22,522 | Units |
| 89.4 |
| $ | 307,959 |
| 1.16 x |
| $ | 371,258 |
| 1.40 x |
|
Life science |
| 99 |
| 2,822,043 |
| 180,707 |
| 31,414 |
| 15 |
| 6,232 | Sq. Ft. |
| 89.1 |
| N/A |
| N/A |
| N/A |
| N/A |
| |||||
Medical office |
| 190 |
| 2,162,655 |
| 232,418 |
| 101,968 |
| 17 |
| 13,145 | Sq. Ft. |
| 90.2 |
| N/A |
| N/A |
| N/A |
| N/A |
| |||||
Hospital |
| 20 |
| 705,514 |
| 66,794 |
| 2,781 |
| 23 |
| 2,705 | Beds |
| 56.1 |
| 164,487 |
| 2.46 x |
| 192,934 |
| 2.88 x |
| |||||
Skilled nursing |
| 48 |
| 254,759 |
| 26,969 |
| — |
| 23 |
| 5,681 | Beds |
| 86.0 |
| 50,875 |
| 1.47 x |
| 70,270 |
| 2.03 x |
| |||||
|
| 564 |
| $ | 9,448,889 |
| $ | 719,339 |
| $ | 146,506 |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Direct Financing Lease Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| Property |
|
|
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||||
Segment |
| Count |
| Investment |
| DFL Income |
|
|
| Age (Years) |
| Capacity |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC |
| ||||||
Senior housing |
| 30 |
| $ | 629,826 |
| $ | 43,646 |
|
|
| 11 |
| 3,141 | Units |
| 91.8 |
| $ | 44,255 |
| 1.16 x |
| $ | 55,568 |
| 1.46 x |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Secured Loan Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Property |
|
|
| Interest |
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||||
Segment |
| Count |
| Investment |
| Income |
|
|
| Age (Years) |
| Capacity |
| Occupancy % |
| Amount |
| DSC |
| Amount |
| DSC |
| ||||||
Senior housing |
| 3 |
| $ | 17,877 |
| $ | 914 |
|
|
| 15 |
| 168 | Units |
| 84.0 |
| $ | 826 |
| 1.93 x |
| $ | 1,000 |
| 2.33 x |
| |
Hospital |
| 1 |
| 35,308 |
| 2,251 |
|
|
| 10 |
| 58 | Beds |
| 53.8 |
| 9,458 |
| 3.15 x |
| 11,138 |
| 3.71 x |
| |||||
Skilled nursing |
| 3 |
| 15,012 |
| 1,282 |
|
|
| 30 |
| 442 | Beds |
| 84.5 |
| 5,189 |
| 2.16 x |
| 6,552 |
| 2.73 x |
| |||||
|
| 7 |
| $ | 68,197 |
| $ | 4,447 |
|
|
| 21 |
|
|
|
|
| $ | 15,473 |
|
|
| $ | 18,690 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mezzanine Loans and Other Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
| Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Segment |
|
|
| Investment |
| Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hospital |
|
|
| $ | 342,109 |
| $ | 31,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Skilled nursing |
|
|
| 902,726 |
| 63,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
| $ | 1,244,835 |
| $ | 94,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
| 601 |
| $ | 11,391,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21 |
Consolidated Portfolio
As of and for the nine months ended September 30, 2008, dollars and square feet in thousands
Lease Expirations and Secured Loan Maturities
|
|
|
| Expiration Year |
| ||||||||||||||||||||||||||||||||
Segment |
| Total |
| 2008 |
| 2009 |
| 2010 |
| 2011 |
| 2012 |
| 2013 |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| Thereafter |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Senior housing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 240 |
| 1 |
| 2 |
| 4 |
| 4 |
| 4 |
| 6 |
| 8 |
| 2 |
| 24 |
| 26 |
| 159 |
| ||||||||||||
Annualized revenues |
| $ | 310,093 |
| $ | 72 |
| $ | 294 |
| $ | 659 |
| $ | 1,103 |
| $ | 1,075 |
| $ | 24,585 |
| $ | 15,600 |
| $ | 3,174 |
| $ | 26,509 |
| $ | 31,041 |
| $ | 205,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Life science: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Square feet |
| 5,552 |
| 33 |
| 465 |
| 558 |
| 410 |
| 176 |
| 198 |
| 250 |
| 595 |
| 197 |
| 733 |
| 1,937 |
| ||||||||||||
Annualized revenues |
| $ | 186,159 |
| $ | 335 |
| $ | 10,310 |
| $ | 12,260 |
| $ | 13,655 |
| $ | 4,112 |
| $ | 6,850 |
| $ | 5,398 |
| $ | 17,752 |
| $ | 5,748 |
| $ | 23,474 |
| $ | 86,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Square feet |
| 11,851 |
| 825 |
| 1,752 |
| 1,853 |
| 1,264 |
| 1,470 |
| 1,150 |
| 651 |
| 590 |
| 381 |
| 461 |
| 1,454 |
| ||||||||||||
Annualized revenues |
| $ | 238,203 |
| $ | 18,311 |
| $ | 35,917 |
| $ | 37,594 |
| $ | 27,079 |
| $ | 29,786 |
| $ | 19,801 |
| $ | 15,427 |
| $ | 11,491 |
| $ | 7,860 |
| $ | 9,981 |
| $ | 24,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Hospital(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 20 |
| — |
| 2 |
| 1 |
| — |
| — |
| 1 |
| 3 |
| 1 |
| 1 |
| 2 |
| 9 |
| ||||||||||||
Annualized revenues |
| $ | 67,839 |
| $ | — |
| $ | 13,961 |
| $ | 2,973 |
| $ | — |
| $ | — |
| $ | 2,400 |
| $ | 16,018 |
| $ | 369 |
| $ | 3,001 |
| $ | 4,413 |
| $ | 24,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Skilled nursing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 51 |
| 1 |
| 5 |
| 2 |
| — |
| — |
| 10 |
| 9 |
| 5 |
| 5 |
| 9 |
| 5 |
| ||||||||||||
Annualized revenues |
| $ | 37,148 |
| $ | 637 |
| $ | 2,440 |
| $ | 1,530 |
| $ | — |
| $ | — |
| $ | 6,899 |
| $ | 6,672 |
| $ | 3,197 |
| $ | 4,837 |
| $ | 7,953 |
| $ | 2,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 839,442 |
| $ | 19,355 |
| $ | 62,922 |
| $ | 55,016 |
| $ | 41,837 |
| $ | 34,973 |
| $ | 60,535 |
| $ | 59,115 |
| $ | 35,983 |
| $ | 47,955 |
| $ | 76,862 |
| $ | 344,889 |
|
(1) Lease expirations exclude one facility in Plaquemine, LA where the lease has been terminated.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22 |
Consolidated Same Property Portfolio
As of September 30, 2008, except NOI data, dollars and square feet in thousands
|
|
|
| Senior |
| Life |
| Medical |
|
|
| Skilled |
| ||||||
|
| Total |
| Housing |
| Science |
| Office |
| Hospital |
| Nursing |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Property count |
| 464 |
| 203 |
| 13 |
| 186 |
| 14 |
| 48 |
| ||||||
Investment |
| $ | 6,258,074 |
| $ | 3,463,974 |
| $ | 167,988 |
| $ | 1,906,458 |
| $ | 464,895 |
| $ | 254,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Percent of owned property portfolio (by investment) |
| 66.2 |
| 98.9 |
| 6.0 |
| 88.2 |
| 65.9 |
| 100.0 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Capacity |
|
|
| 22,206 Units |
| 894 Sq. Ft. |
| 12,171 Sq. Ft. |
| 1,748 Beds |
| 5,681 Beds |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI for the three months ended: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
September 30, 2008 |
| $ | 135,592 |
| $ | 66,869 |
| $ | 4,438 |
| $ | 41,254 |
| $ | 13,870 |
| $ | 9,161 |
|
June 30, 2008 |
| $ | 138,467 |
| $ | 66,012 |
| $ | 4,427 |
| $ | 42,797 |
| $ | 16,216 |
| $ | 9,015 |
|
Same property % change in NOI |
| (2.1 | ) | 1.3 |
| 0.2 |
| (3.6 | ) | (14.5 | ) | 1.6 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI for the three months ended: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
September 30, 2008 |
| $ | 130,385 |
| $ | 63,891 |
| $ | 3,612 |
| $ | 39,991 |
| $ | 13,839 |
| $ | 9,052 |
|
June 30, 2008 |
| $ | 133,143 |
| $ | 62,852 |
| $ | 3,650 |
| $ | 41,555 |
| $ | 16,185 |
| $ | 8,901 |
|
Same property % change in Adjusted NOI |
| (2.1 | ) | 1.7 |
| (1.0 | ) | (3.8 | ) | (14.5 | ) | 1.7 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI for the nine months ended: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
September 30, 2008 |
| $ | 407,120 |
| $ | 199,947 |
| $ | 11,287 |
| $ | 127,029 |
| $ | 41,888 |
| $ | 26,969 |
|
September 30, 2007 |
| $ | 410,959 |
| $ | 205,110 |
| $ | 9,498 |
| $ | 127,466 |
| $ | 42,702 |
| $ | 26,183 |
|
Same property % change in NOI |
| (0.9 | ) | (2.5 | ) | 18.8 |
| (0.3 | ) | (1.9 | ) | 3.0 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI for the nine months ended: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
September 30, 2008 |
| $ | 391,647 |
| $ | 190,274 |
| $ | 9,743 |
| $ | 123,219 |
| $ | 41,795 |
| $ | 26,616 |
|
September 30, 2007 |
| $ | 383,430 |
| $ | 186,243 |
| $ | 8,363 |
| $ | 120,865 |
| $ | 42,227 |
| $ | 25,732 |
|
Same property % change in Adjusted NOI |
| 2.1 |
| 2.2 |
| 16.5 |
| 1.9 |
| (1.0 | ) | 3.4 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
23 |
Consolidated Senior Housing Portfolio
As of and for the nine months ended September 30, 2008, dollars in thousands
Owned Property |
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| |||||||||
Portfolio |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Units |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC |
| |||||
Assisted living |
| 170 |
| $ | 2,282,027 |
| $ | 133,530 |
| $ | 10,343 |
| 11 |
| 14,407 |
| 88.3 |
| $ | 186,761 |
| 1.13 x |
| $ | 229,408 |
| 1.38 x |
|
Independent living |
| 28 |
| 682,030 |
| 42,145 |
| — |
| 14 |
| 4,583 |
| 89.3 |
| 56,931 |
| 1.07 x |
| 65,687 |
| 1.24 x |
| |||||
CCRCs |
| 9 |
| 539,861 |
| 36,776 |
| — |
| 20 |
| 3,532 |
| 94.3 |
| 64,267 |
| 1.36 x |
| 76,163 |
| 1.61 x |
| |||||
|
| 207 |
| $ | 3,503,918 |
| $ | 212,451 |
| $ | 10,343 |
| 12 |
| 22,522 |
| 89.4 |
| $ | 307,959 |
| 1.16 x |
| $ | 371,258 |
| 1.40 x |
|
Direct Financing |
| Property |
|
|
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||
Portfolio |
| Count |
| Investment |
| DFL Income |
|
|
| Age (Years) |
| Units |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC |
| ||||
Assisted living |
| 27 |
| $ | 570,326 |
| $ | 36,656 |
|
|
| 11 |
| 3,141 |
| 91.8 |
| $ | 44,255 |
| 1.16 x |
| $ | 55,568 |
| 1.46 x |
|
CCRCs(1) |
| 3 |
| 59,500 |
| 6,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| 30 |
| $ | 629,826 |
| $ | 43,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured Loan |
| Property |
|
|
| Interest |
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||
Portfolio |
| Count |
| Investment |
| Income |
|
|
| Age (Years) |
| Units |
| Occupancy % |
| Amount |
| DSC |
| Amount |
| DSC |
| ||||
Assisted living |
| 2 |
| $ | 4,800 |
| $ | 219 |
|
|
| 11 |
| 68 |
| — |
| $ | — |
| N/A |
| $ | — |
| N/A |
|
Independent living |
| 1 |
| 3,059 |
| 241 |
|
|
| 24 |
| 100 |
| 84.0 |
| 826 |
| 1.93 x |
| 1,000 |
| 2.33 x |
| ||||
CCRCs(2) |
| — |
| 10,018 |
| 454 |
|
|
| N/A |
| — |
|
|
|
|
|
|
|
|
|
|
| ||||
|
| 3 |
| $ | 17,877 |
| $ | 914 |
|
|
| 15 |
| 168 |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| 240 |
| $ | 4,151,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
(1) Represents ground leases on CCRCs.
(2) Represents a secured construction loan on one CCRC included in the direct financing lease portfolio.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24 |
Consolidated Senior Housing Portfolio |
As of and for the nine months ended September 30, 2008, dollars in thousands |
Portfolio Diversification
Operator Concentration
|
| Properties |
| Investment |
| Rental Revenues & Interest |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||
Operator |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Units |
| Occupancy % |
| CFC/DSC |
| CFC/DSC |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunrise Senior Living |
| 101 |
| 99 |
| $ | 2,225,321 |
| 54 |
| $ | 111,857 |
| 43 |
| 11,730 |
| 90.6 |
| 1.14 x |
| 1.41 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Brookdale |
| 24 |
| 92 |
| 675,054 |
| 16 |
| 50,875 |
| 20 |
| 4,826 |
| 93.7 |
| 1.31 x |
| 1.54 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Aegis Senior Living |
| 12 |
| 67 |
| 258,008 |
| 6 |
| 16,840 |
| 7 |
| 966 |
| 88.4 |
| 1.02 x |
| 1.18 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Emeritus Corporation |
| 26 |
| 88 |
| 245,518 |
| 6 |
| 20,614 |
| 8 |
| 2,344 |
| 90.9 |
| 1.21 x |
| 1.47 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Capital Senior Living |
| 15 |
| 73 |
| 176,517 |
| 4 |
| 10,865 |
| 4 |
| 1,530 |
| 86.2 |
| 1.14 x |
| 1.29 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Harbor Retirement Associates |
| 10 |
| 90 |
| 160,555 |
| 4 |
| 7,668 |
| 3 |
| 1,069 |
| 81.5 |
| 1.08 x |
| 1.42 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Atria Senior Living Group |
| 6 |
| 100 |
| 88,076 |
| 2 |
| 6,884 |
| 3 |
| 854 |
| 85.5 |
| 0.96 x |
| 1.11 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Other |
| 46 |
| 50 |
| 322,572 |
| 8 |
| 31,408 |
| 12 |
| 2,512 |
| 81.7 |
| 1.03 x |
| 1.29 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| 240 |
| 84 |
| $ | 4,151,621 |
| 100 |
| $ | 257,011 |
| 100 |
| 25,831 |
| 89.7 |
| 1.16 x |
| 1.40 x |
|
Geographic Concentration
|
| Property |
| Investment |
| Rental Revenues & Interest |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||
State |
| Count |
| Amount |
| % |
| Amount |
| % |
| Units |
| Occupancy % |
| CFC/DSC |
| CFC/DSC |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CA |
| 28 |
| $ | 582,955 |
| 14 |
| $ | 33,542 |
| 13 |
| 3,178 |
| 86.3 |
| 1.10 x |
| 1.36 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
FL |
| 30 |
| 479,199 |
| 12 |
| 32,630 |
| 13 |
| 3,819 |
| 89.1 |
| 1.22 x |
| 1.50 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
TX |
| 30 |
| 384,445 |
| 9 |
| 28,136 |
| 11 |
| 3,257 |
| 87.8 |
| 1.20 x |
| 1.40 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
NJ |
| 13 |
| 280,589 |
| 7 |
| 14,710 |
| 6 |
| 1,223 |
| 94.0 |
| 1.11 x |
| 1.33 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
VA |
| 10 |
| 278,945 |
| 7 |
| 13,713 |
| 5 |
| 1,336 |
| 91.8 |
| 1.13 x |
| 1.34 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
IL |
| 11 |
| 187,218 |
| 5 |
| 10,583 |
| 4 |
| 912 |
| 91.3 |
| 1.24 x |
| 1.47 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
MD |
| 9 |
| 182,087 |
| 4 |
| 11,755 |
| 5 |
| 828 |
| 90.6 |
| 1.04 x |
| 1.28 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
CO |
| 5 |
| 168,931 |
| 4 |
| 9,903 |
| 4 |
| 893 |
| 92.4 |
| 1.35 x |
| 1.65 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
MI |
| 8 |
| 154,261 |
| 4 |
| 10,760 |
| 4 |
| 938 |
| 88.0 |
| 0.78 x |
| 1.02 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
AL |
| 4 |
| 140,332 |
| 3 |
| 9,580 |
| 4 |
| 683 |
| 94.4 |
| 1.11 x |
| 1.28 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
PA |
| 2 |
| 137,400 |
| 3 |
| 9,168 |
| 3 |
| 542 |
| 95.8 |
| 1.55 x |
| 1.80 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
WA |
| 8 |
| 132,609 |
| 3 |
| 6,133 |
| 2 |
| 573 |
| 84.5 |
| 0.72 x |
| 0.92 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Other |
| 82 |
| 1,042,650 |
| 25 |
| 66,398 |
| 26 |
| 7,649 |
| 90.3 |
| 1.22 x |
| 1.48 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| 240 |
| $ | 4,151,621 |
| 100 |
| $ | 257,011 |
| 100 |
| 25,831 |
| 89.7 |
| 1.16 x |
| 1.40 x |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 25 |
Consolidated Senior Housing Portfolio |
Dollars in thousands |
Portfolio Trends
|
| Same Property Portfolio |
|
| Total Portfolio |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
| |||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the Year to Date Ended |
|
| As of and for the Twelve Months Ended |
| |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
| 09/30/08 |
| 06/30/08 |
| Change % |
| 09/30/08 |
| 09/30/07 |
| Change % |
|
| 09/30/08 |
| 06/30/08 |
| 09/30/07(1) |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total senior housing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Property count |
| 203 |
| 203 |
|
|
| 203 |
| 203 |
|
|
|
| 240 |
| 240 |
| 249 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment |
| $ | 3,463,974 |
| $ | 3,461,639 |
| 0.1 |
| $ | 3,463,974 |
| $ | 3,458,777 |
| 0.2 |
|
| $ | 4,151,621 |
| $ | 4,149,152 |
| $ | 4,166,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Units |
| 22,206 |
| 22,210 |
| — |
| 22,206 |
| 22,242 |
| (0.2 | ) |
| 25,831 |
| 25,838 |
| 26,171 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Occupancy % |
| 89.4 |
| 90.0 |
| (0.6 | ) | 89.4 |
| 89.4 |
| — |
|
| 89.7 |
| 90.1 |
| 88.3 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
EBITDAR |
| $ | 305,126 |
| $ | 304,402 |
| 0.2 |
| $ | 305,126 |
| $ | 248,404 |
| 22.8 |
|
| $ | 353,040 |
| $ | 350,645 |
| $ | 314,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
EBITDAR CFC/DSC |
| 1.16 x |
| 1.19 x |
| (2.5 | ) | 1.16 x |
| 1.06 x |
| 9.4 |
|
| 1.16 x |
| 1.19 x |
| 1.06 x |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
EBITDARM |
| $ | 367,842 |
| $ | 366,039 |
| 0.5 |
| $ | 367,842 |
| $ | 292,752 |
| 25.6 |
|
| $ | 427,826 |
| $ | 423,938 |
| $ | 369,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
EBITDARM CFC/DSC |
| 1.40 x |
| 1.43 x |
| (2.1 | ) | 1.40 x |
| 1.25 x |
| 12.0 |
|
| 1.40 x |
| 1.43 x |
| 1.25 x |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Rental revenues |
| $ | 70,275 |
| $ | 69,113 |
| 1.7 |
| $ | 209,872 |
| $ | 215,709 |
| (2.7 | ) |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Operating expenses |
| (3,406 | ) | (3,101 | ) | 9.8 |
| (9,925 | ) | (10,599 | ) | (6.4 | ) |
|
|
|
|
|
|
| |||||||
|
| $ | 66,869 |
| $ | 66,012 |
| 1.3 |
| $ | 199,947 |
| $ | 205,110 |
| (2.5 | ) |
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Straight-line rents |
| (3,015 | ) | (3,197 | ) | (5.7 | ) | (9,783 | ) | (18,977 | ) | (48.4 | ) |
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Above market rents, net |
| 37 |
| 37 |
| — |
| 110 |
| 110 |
| — |
|
|
|
|
|
|
|
| |||||||
|
| $ | 63,891 |
| $ | 62,852 |
| 1.7 |
| $ | 190,274 |
| $ | 186,243 |
| 2.2 |
|
|
|
|
|
|
|
|
| |
(1) Amounts are reflected as originally reported. | |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
26 |
Consolidated Senior Housing Portfolio |
Dollars in thousands |
Lease Expirations and Secured Loan Maturities
|
| Total |
| Assisted Living |
| Independent Living |
| CCRCs |
| ||||||||||||||
|
|
|
| Annualized Revenues |
|
|
| Annualized |
|
|
| Annualized |
|
|
| Annualized |
| ||||||
Year |
| Properties |
| Amount |
| % |
| Properties |
| Revenues |
| Properties |
| Revenues |
| Properties |
| Revenues |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2008 (Three months) |
| 1 |
| $ | 72 |
| — |
| 1 |
| $ | 72 |
| — |
| $ | — |
| — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2009 |
| 2 |
| 294 |
| — |
| 2 |
| 294 |
| — |
| — |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2010 |
| 4 |
| 659 |
| — |
| 4 |
| 659 |
| — |
| — |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2011 |
| 4 |
| 1,103 |
| — |
| 3 |
| 785 |
| 1 |
| 318 |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2012 |
| 4 |
| 1,075 |
| — |
| 4 |
| 1,075 |
| — |
| — |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2013 |
| 6 |
| 24,585 |
| 8 |
| — |
| — |
| 1 |
| 4,130 |
| 5 |
| 20,455 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2014 |
| 8 |
| 15,600 |
| 5 |
| 5 |
| 1,948 |
| — |
| — |
| 3 |
| 13,652 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2015 |
| 2 |
| 3,174 |
| 1 |
| 1 |
| 617 |
| 1 |
| 2,557 |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2016 |
| 24 |
| 26,509 |
| 9 |
| 14 |
| 12,886 |
| 10 |
| 13,623 |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
2017 |
| 26 |
| 31,041 |
| 10 |
| 21 |
| 19,729 |
| 3 |
| 4,389 |
| 2 |
| 6,923 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Thereafter |
| 159 |
| 205,981 |
| 67 |
| 144 |
| 164,427 |
| 13 |
| 27,698 |
| 2 |
| 13,856 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| 240 |
| $ | 310,093 |
| 100 |
| 199 |
| $ | 202,492 |
| 29 |
| $ | 52,715 |
| 12 |
| $ | 54,886 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
| 27 |
Consolidated Life Science Portfolio |
As of and for the nine months ended September 30, 2008, dollars and square feet in thousands |
Owned Property |
| Property |
|
|
| Rental |
| Operating |
| Average |
| Square |
|
|
| |||
Portfolio |
| Count |
| Investment |
| Revenues(1) |
| Expenses |
| Age (Years) |
| Feet |
| Occupancy % |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
San Francisco |
| 73 |
| $ | 2,243,340 |
| $ | 146,731 |
| $ | 23,703 |
| 16 |
| 4,269 |
| 87.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
San Diego |
| 17 |
| 488,430 |
| 24,980 |
| 6,244 |
| 17 |
| 1,383 |
| 90.9 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Utah |
| 9 |
| 90,273 |
| 8,996 |
| 1,467 |
| 9 |
| 580 |
| 100.0 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
| 99 |
| $ | 2,822,043 |
| $ | 180,707 |
| $ | 31,414 |
| 15 |
| 6,232 |
| 89.1 |
|
Portfolio |
|
|
|
|
|
|
|
|
| |
Diversification |
|
|
|
|
|
|
|
|
| |
Tenant Concentration |
| Square Feet |
| Annualized Revenues |
| |||||
|
|
|
|
|
|
|
|
|
| |
Tenant |
| Amount |
| % |
| Amount |
| % |
| |
Genentech |
| 794 |
| 14 |
| $ | 33,425 |
| 18 |
|
|
|
|
|
|
|
|
|
|
| |
Amgen |
| 433 |
| 8 |
| 25,118 |
| 13 |
| |
|
|
|
|
|
|
|
|
|
| |
Rigel Pharmaceuticals |
| 147 |
| 3 |
| 13,983 |
| 8 |
| |
|
|
|
|
|
|
|
|
|
| |
Takeda |
| 283 |
| 5 |
| 13,922 |
| 7 |
| |
|
|
|
|
|
|
|
|
|
| |
Exelixis, Inc. |
| 295 |
| 5 |
| 12,136 |
| 7 |
| |
|
|
|
|
|
|
|
|
|
| |
General Atomics |
| 281 |
| 5 |
| 5,044 |
| 3 |
| |
|
|
|
|
|
|
|
|
|
| |
ARUP |
| 319 |
| 6 |
| 4,885 |
| 3 |
| |
|
|
|
|
|
|
|
|
|
| |
Sequenom |
| 83 |
| 1 |
| 4,457 |
| 2 |
| |
|
|
|
|
|
|
|
|
|
| |
Myriad Genetics |
| 225 |
| 4 |
| 4,406 |
| 2 |
| |
|
|
|
|
|
|
|
|
|
| |
Fibrogen |
| 106 |
| 2 |
| 4,119 |
| 2 |
| |
|
|
|
|
|
|
|
|
|
| |
Other |
| 2,586 |
| 47 |
| 64,664 |
| 35 |
| |
|
|
|
|
|
|
|
|
|
| |
|
| 5,552 |
| 100 |
| $ | 186,159 |
| 100 |
|
|
|
|
(1) |
| Excludes $12.6 million of rent, $9.5 million from San Francisco and $3.1 million from San Diego, collected on leases where the respective tenant improvement build out are not complete (deferred rent). These leases are included in occupied square feet and annualized revenues when determining occupancy and tenant concentration. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
28 |
Consolidated Life Science Portfolio
Dollars and square feet in thousands
Portfolio Trends
|
| Same Property Portfolio |
|
| Total Portfolio |
| |||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the Year to Date Ended |
|
| As of and for the Twelve Months Ended |
| |||||||||||||||||||
|
| 09/30/08 |
| 06/30/08 |
| Change % |
| 09/30/08 |
| 09/30/07 |
| Change % |
|
| 09/30/08 |
| 06/30/08(1) |
| 09/30/07(1) |
| |||||||
Total life science: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Property count |
| 13 |
| 13 |
|
|
| 13 |
| 13 |
|
|
|
| 99 |
| 99 |
| 93 |
| |||||||
Investment |
| $ | 167,988 |
| $ | 166,924 |
| 0.6 |
| $ | 167,988 |
| $ | 150,968 |
| 11.3 |
|
| $ | 2,822,043 |
| $ | 2,729,716 |
| $ | 2,652,190 |
|
Square feet |
| 894 |
| 898 |
| (0.4 | ) | 894 |
| 921 |
| (2.9 | ) |
| 6,232 |
| 6,171 |
| 5,910 |
| |||||||
Occupancy % |
| 100.0 |
| 91.2 |
| 8.8 |
| 100.0 |
| 88.5 |
| 11.5 |
|
| 89.1 |
| 88.1 |
| 83.4 |
| |||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Rental revenues |
| $ | 5,826 |
| $ | 5,935 |
| (1.8 | ) | $ | 15,058 |
| $ | 12,796 |
| 17.7 |
|
|
|
|
|
|
|
| |||
Operating expenses |
| (1,388 | ) | (1,508 | ) | (8.0 | ) | (3,771 | ) | (3,298 | ) | 14.3 |
|
|
|
|
|
|
|
| |||||||
|
| $ | 4,438 |
| $ | 4,427 |
| 0.2 |
| $ | 11,287 |
| $ | 9,498 |
| 18.8 |
|
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Straight-line rents |
| (731 | ) | (682 | ) | 7.2 |
| (1,260 | ) | (851 | ) | 48.1 |
|
|
|
|
|
|
|
| |||||||
Below market rents, net |
| (95 | ) | (95 | ) | — |
| (284 | ) | (284 | ) | — |
|
|
|
|
|
|
|
| |||||||
|
| $ | 3,612 |
| $ | 3,650 |
| (1.0 | ) | $ | 9,743 |
| $ | 8,363 |
| 16.5 |
|
|
|
|
|
|
|
| |||
(1) Amounts are reflected as originally reported, except for occupancy which were revised to conform to current presentation.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
| |||||||||||
|
|
|
|
|
|
|
|
|
| 29 |
Consolidated Life Science Portfolio
Dollars and square feet in thousands
Lease Expirations
|
| Total |
| San Francisco |
| San Diego |
| Utah |
| ||||||||||||||||
|
| Square Feet |
| Annualized Revenues |
| Square |
| Annualized |
| Square |
| Annualized |
| Square |
| Annualized |
| ||||||||
Year |
| Amount |
| % |
| Amount |
| % |
| Feet |
| Revenues |
| Feet |
| Revenues |
| Feet |
| Revenues |
| ||||
2008 (Three months)(1) |
| 33 |
| 1 |
| $ | 335 |
| — |
| 33 |
| $ | 335 |
| — |
| $ | — |
| — |
| $ | — |
|
2009 |
| 465 |
| 8 |
| 10,310 |
| 6 |
| 230 |
| 5,692 |
| 160 |
| 3,604 |
| 75 |
| 1,014 |
| ||||
2010 |
| 558 |
| 10 |
| 12,260 |
| 7 |
| 284 |
| 7,097 |
| 142 |
| 3,176 |
| 132 |
| 1,987 |
| ||||
2011 |
| 410 |
| 7 |
| 13,655 |
| 7 |
| 380 |
| 12,707 |
| 30 |
| 948 |
| — |
| — |
| ||||
2012 |
| 176 |
| 3 |
| 4,112 |
| 2 |
| 108 |
| 2,493 |
| 32 |
| 1,070 |
| 36 |
| 549 |
| ||||
2013 |
| 198 |
| 4 |
| 6,850 |
| 4 |
| 198 |
| 6,850 |
| — |
| — |
| — |
| — |
| ||||
2014 |
| 250 |
| 4 |
| 5,398 |
| 3 |
| 250 |
| 5,398 |
| — |
| — |
| — |
| — |
| ||||
2015 |
| 595 |
| 11 |
| 17,752 |
| 9 |
| 213 |
| 8,017 |
| 311 |
| 8,539 |
| 71 |
| 1,196 |
| ||||
2016 |
| 197 |
| 4 |
| 5,748 |
| 3 |
| 197 |
| 5,748 |
| — |
| — |
| — |
| — |
| ||||
2017 |
| 733 |
| 13 |
| 23,474 |
| 13 |
| 226 |
| 10,127 |
| 353 |
| 10,522 |
| 154 |
| 2,825 |
| ||||
Thereafter |
| 1,937 |
| 35 |
| 86,265 |
| 46 |
| 1,596 |
| 80,037 |
| 229 |
| 3,959 |
| 112 |
| 2,269 |
| ||||
|
| 5,552 |
| 100 |
| $ | 186,159 |
| 100 |
| 3,715 |
| $ | 144,501 |
| 1,257 |
| $ | 31,818 |
| 580 |
| $ | 9,840 |
|
(1) Includes month-to-month and hold-over leases.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30 |
Consolidated Life Science Portfolio
Square feet in thousands
Leasing Activity
|
|
|
| Annualized |
|
|
| Tenant |
|
|
|
|
|
|
| |
|
| Leased |
| Base Rent |
|
|
| Improvements |
| Leasing |
| Average |
| Renewal Rate |
| |
|
| Square |
| Per |
| % Change |
| Per Square |
| Costs Per |
| Lease Term |
| Year-to- |
| |
|
| Feet(1) |
| Square Foot |
| In Rents |
| Foot |
| Square Foot |
| (Months) |
| Date(2) |
| |
Leased Square Feet as of December 31, 2007 |
| 5,623 |
| $ | 29.62 |
|
|
|
|
|
|
|
|
|
|
|
Expirations |
| (17 | ) | 12.28 |
|
|
|
|
|
|
|
|
|
|
| |
Renewals, amendments and extensions |
| 17 |
| 13.59 |
| 10.7 |
| 2.41 |
| 1.01 |
| 14 |
| 100.0 |
| |
New leases |
| 18 |
| 36.04 |
|
|
| 40.04 |
| 3.51 |
| 52 |
|
|
| |
Terminations |
| (81 | ) | 12.42 |
|
|
|
|
|
|
|
|
|
|
| |
Leased Square Feet as of March 31, 2008 |
| 5,560 |
| $ | 31.67 |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions/Developments |
| 82 |
| 45.16 |
|
|
|
|
|
|
|
|
|
|
| |
Expirations |
| (27 | ) | 13.60 |
|
|
|
|
|
|
|
|
|
|
| |
Renewals, amendments and extensions |
| 7 |
| 14.00 |
| 3.0 |
| — |
| 0.42 |
| 12 |
| 54.5 |
| |
New leases |
| 60 |
| 29.77 |
|
|
| 31.68 |
| 9.56 |
| 79 |
|
|
| |
Terminations |
| (7 | ) | 12.00 |
|
|
|
|
|
|
|
|
|
|
| |
Leased Square Feet as of June 30, 2008 |
| 5,675 |
| $ | 32.51 |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions/Developments |
| 147 |
| 45.16 |
|
|
|
|
|
|
|
|
|
|
| |
Dispositions and redevelopments |
| (41 | ) | 15.44 |
|
|
|
|
|
|
|
|
|
|
| |
Expirations |
| (184 | ) | 23.80 |
|
|
|
|
|
|
|
|
|
|
| |
Renewals, amendments and extensions |
| 140 |
| 28.74 |
| 11.7 |
| 3.26 |
| 4.11 |
| 40 |
| 71.9 |
| |
New leases |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Terminations |
| (149 | ) | 19.82 |
|
|
|
|
|
|
|
|
|
|
| |
Leased Square Feet as of September 30, 2008 |
| 5,588 |
| $ | 33.53 |
|
|
|
|
|
|
|
|
|
|
|
(1) Represents square feet subject to executed lease agreements.
(2) Renewal rates were revised to conform to current presentation.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 31 |
Consolidated Medical Office Portfolio
As of and for the nine months ended September 30, 2008, dollars and square feet in thousands
Owned Property |
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
|
|
|
|
| |||
Portfolio |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Square Feet |
| Occupancy % |
|
|
|
|
| |||
On-Campus |
| 144 |
| $ | 1,703,983 |
| $ | 185,829 |
| $ | 82,182 |
| 17 |
| 10,793 |
| 89.9 |
|
|
|
|
|
Off-Campus |
| 46 |
| 458,672 |
| 46,589 |
| 19,786 |
| 16 |
| 2,352 |
| 91.4 |
|
|
|
|
| |||
|
| 190 |
| $ | 2,162,655 |
| $ | 232,418 |
| $ | 101,968 |
| 17 |
| 13,145 |
| 90.2 |
|
|
|
|
|
Portfolio Diversification
Geographic Concentration
|
| Property |
| Investment |
| Square Feet |
|
|
| Rental Revenues |
| Operating Expenses |
| |||||||||||
State |
| Count |
| Amount |
| % |
| Amount |
| % |
| Occupancy % |
| Amount |
| % |
| Amount |
| % |
| |||
TX |
| 45 |
| $ | 627,945 |
| 29 |
| 4,074 |
| 31 |
| 89.9 |
| $ | 65,333 |
| 28 |
| $ | 33,937 |
| 33 |
|
CA |
| 16 |
| 259,609 |
| 12 |
| 952 |
| 7 |
| 84.2 |
| 25,720 |
| 11 |
| 13,832 |
| 14 |
| |||
CO |
| 16 |
| 187,199 |
| 9 |
| 1,031 |
| 8 |
| 82.8 |
| 18,404 |
| 8 |
| 8,413 |
| 8 |
| |||
WA |
| 7 |
| 175,140 |
| 8 |
| 687 |
| 5 |
| 97.9 |
| 20,788 |
| 9 |
| 7,965 |
| 8 |
| |||
TN |
| 17 |
| 144,142 |
| 7 |
| 1,521 |
| 12 |
| 91.7 |
| 19,593 |
| 8 |
| 8,085 |
| 8 |
| |||
FL |
| 19 |
| 140,902 |
| 6 |
| 1,024 |
| 8 |
| 91.3 |
| 17,343 |
| 8 |
| 8,278 |
| 8 |
| |||
UT |
| 22 |
| 130,304 |
| 6 |
| 939 |
| 7 |
| 92.7 |
| 13,157 |
| 6 |
| 3,307 |
| 3 |
| |||
KY |
| 6 |
| 99,531 |
| 5 |
| 640 |
| 5 |
| 92.0 |
| 9,718 |
| 4 |
| 3,244 |
| 3 |
| |||
NV |
| 8 |
| 83,821 |
| 4 |
| 541 |
| 4 |
| 86.0 |
| 10,134 |
| 4 |
| 3,916 |
| 4 |
| |||
Other |
| 34 |
| 314,062 |
| 14 |
| 1,736 |
| 13 |
| 92.8 |
| 32,228 |
| 14 |
| 10,991 |
| 11 |
| |||
|
| 190 |
| $ | 2,162,655 |
| 100 |
| 13,145 |
| 100 |
| 90.2 |
| $ | 232,418 |
| 100 |
| $ | 101,968 |
| 100 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 32 |
Consolidated Medical Office Portfolio
Dollars and square feet in thousands
Portfolio Trends
|
| Same Property Portfolio |
|
| Total Portfolio |
| |||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the Year to Date Ended |
|
| As of and for the Twelve Months Ended |
| |||||||||||||||||||
|
| 09/30/08 |
| 06/30/08 |
| Change % |
| 09/30/08 |
| 09/30/07 |
| Change % |
|
| 09/30/08 |
| 06/30/08(1) |
| 09/30/07(1) |
| |||||||
Total medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Property count |
| 186 |
| 186 |
|
|
| 186 |
| 186 |
|
|
|
| 190 |
| 192 |
| 204 |
| |||||||
Investment |
| $ | 1,906,458 |
| $ | 1,898,857 |
| 0.4 |
| $ | 1,906,458 |
| $ | 1,880,419 |
| 1.4 |
|
| $ | 2,162,655 |
| $ | 2,160,156 |
| $ | 2,199,637 |
|
Square feet |
| 12,171 |
| 12,154 |
| 0.1 |
| 12,171 |
| 12,128 |
| 0.4 |
|
| 13,145 |
| 13,204 |
| 13,752 |
| |||||||
Occupancy % |
| 90.4 |
| 91.0 |
| (0.6 | ) | 90.4 |
| 90.5 |
| (0.1 | ) |
| 90.2 |
| 90.3 |
| 90.6 |
| |||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Rental revenues |
| $ | 70,614 |
| $ | 70,412 |
| 0.3 |
| $ | 210,552 |
| $ | 209,898 |
| 0.3 |
|
|
|
|
|
|
|
| |||
Operating expenses |
| (29,360 | ) | (27,615 | ) | 6.3 |
| (83,523 | ) | (82,432 | ) | 1.3 |
|
|
|
|
|
|
|
| |||||||
|
| $ | 41,254 |
| $ | 42,797 |
| (3.6 | ) | $ | 127,029 |
| $ | 127,466 |
| (0.3 | ) |
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Straight-line rents |
| (1,025 | ) | (1,003 | ) | 2.2 |
| (3,110 | ) | (5,320 | ) | (41.5 | ) |
|
|
|
|
|
|
| |||||||
Below market rents, net |
| (238 | ) | (239 | ) | (0.4 | ) | (700 | ) | (1,281 | ) | (45.4 | ) |
|
|
|
|
|
|
| |||||||
|
| $ | 39,991 |
| $ | 41,555 |
| (3.8 | ) | $ | 123,219 |
| $ | 120,865 |
| 1.9 |
|
|
|
|
|
|
|
| |||
(1) Amounts are reflected as originally reported, except occupancy which were revised to conform to current presentation.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 33 |
Consolidated Medical Office Portfolio |
Dollars and square feet in thousands
Lease Expirations
|
| Total |
| On-Campus |
| Off-Campus |
| |||||||||||||
|
| Square Feet |
| Annualized Revenues |
|
|
| Annualized |
|
|
| Annualized |
| |||||||
|
| Amount |
| % |
| Amount |
| % |
| Square Feet |
| Revenues |
| Square Feet |
| Revenues |
| |||
2008 (Three months)(1) |
| 825 |
| 7 |
| $ | 18,311 |
| 8 |
| 665 |
| $ | 13,179 |
| 160 |
| $ | 5,132 |
|
2009 |
| 1,752 |
| 15 |
| 35,917 |
| 15 |
| 1,432 |
| 29,497 | �� | 320 |
| 6,420 |
| |||
2010 |
| 1,853 |
| 16 |
| 37,594 |
| 16 |
| 1,690 |
| 33,309 |
| 163 |
| 4,285 |
| |||
2011 |
| 1,264 |
| 11 |
| 27,079 |
| 11 |
| 1,067 |
| 22,947 |
| 197 |
| 4,132 |
| |||
2012 |
| 1,470 |
| 12 |
| 29,786 |
| 13 |
| 1,267 |
| 25,781 |
| 203 |
| 4,005 |
| |||
2013 |
| 1,150 |
| 10 |
| 19,801 |
| 8 |
| 876 |
| 15,159 |
| 274 |
| 4,642 |
| |||
2014 |
| 651 |
| 5 |
| 15,427 |
| 6 |
| 575 |
| 13,695 |
| 76 |
| 1,732 |
| |||
2015 |
| 590 |
| 5 |
| 11,491 |
| 5 |
| 435 |
| 8,335 |
| 155 |
| 3,156 |
| |||
2016 |
| 381 |
| 3 |
| 7,860 |
| 3 |
| 312 |
| 6,415 |
| 69 |
| 1,445 |
| |||
2017 |
| 461 |
| 4 |
| 9,981 |
| 4 |
| 390 |
| 8,617 |
| 71 |
| 1,364 |
| |||
Thereafter |
| 1,456 |
| 12 |
| 24,956 |
| 11 |
| 994 |
| 15,552 |
| 462 |
| 9,404 |
| |||
|
| 11,853 |
| 100 |
| $ | 238,203 |
| 100 |
| 9,703 |
| $ | 192,486 |
| 2,150 |
| $ | 45,717 |
|
| |
(1) Includes month-to-month and hold-over leases. | |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
34 |
Consolidated Medical Office Portfolio |
Square feet in thousands
Leasing |
|
|
| Annualized |
|
|
| Tenant |
|
|
|
|
|
|
| |||
|
|
|
| Base Rent |
|
|
| Improvements |
| Leasing |
| Average |
|
|
| |||
|
| Leased |
| Per |
| % Change |
| Per Square |
| Costs Per |
| Lease Term |
| Renewal Rate |
| |||
|
| Square Feet |
| Square Foot |
| In Rents |
| Foot |
| Square Foot |
| (Months) |
| Year-to-Date |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Leased Square Feet as of December 31, 2007 |
| 12,605 |
| $ | 20.28 |
|
|
|
|
|
|
|
|
|
|
| ||
Expirations |
| (711 | ) | 20.21 |
|
|
|
|
|
|
|
|
|
|
| |||
Renewals, amendments and extensions |
| 582 |
| 20.08 |
| 5.0 |
| $ | 3.72 |
| $ | 1.07 |
| 38 |
| 81.8 |
| |
New leases |
| 108 |
| 17.78 |
|
|
| 24.84 |
| 4.04 |
| 54 |
|
|
| |||
Terminations |
| (27 | ) | 20.48 |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Leased Square Feet as of March 31, 2008 |
| 12,557 |
| $ | 20.47 |
|
|
|
|
|
|
|
|
|
|
| ||
Dispositions |
| (619 | ) | 16.80 |
|
|
|
|
|
|
|
|
|
|
| |||
Expirations |
| (499 | ) | 21.40 |
|
|
|
|
|
|
|
|
|
|
| |||
Renewals, amendments and extensions |
| 392 |
| 24.39 |
| 15.5 |
| 2.41 |
| 0.66 |
| 37 |
| 80.5 |
| |||
New leases |
| 123 |
| 20.04 |
|
|
| 25.33 |
| 3.80 |
| 66 |
|
|
| |||
Terminations |
| (36 | ) | 21.79 |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Leased Square Feet as of June 30, 2008 |
| 11,918 |
| $ | 20.87 |
|
|
|
|
|
|
|
|
|
|
| ||
Dispositions |
| (41 | ) | 15.77 |
|
|
|
|
|
|
|
|
|
|
| |||
Expirations |
| (618 | ) | 25.12 |
|
|
|
|
|
|
|
|
|
|
| |||
Renewals, amendments, and extensions |
| 470 |
| 21.10 |
| 3.7 |
| 5.59 |
| 2.17 |
| 37 |
| 78.9 |
| |||
New leases |
| 153 |
| 18.18 |
|
|
| 27.39 |
| 3.14 |
| 50 |
|
|
| |||
Terminations |
| (29 | ) | 16.86 |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Leased Square Feet as of September 30, 2008 |
| 11,853 |
| 20.82 |
|
|
|
|
|
|
|
|
|
|
| |||
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
35 |
Consolidated Hospital Portfolio |
As of and for the nine months ended September 30, 2008, dollars in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDAR(1) |
| EBITDARM(1) |
| |||||||||||||
|
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
| Occupancy |
|
|
|
|
|
|
|
|
| |||||||||
Owned Property |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Beds |
| %(1) |
| Amount |
| CFC |
| Amount |
| CFC |
| |||||||||
Acute care |
| 8 |
| $ | 511,277 |
| $ | 48,311 |
| $ | 2,285 |
| 31 |
| 1,937 |
| 53.7 |
| $ | 112,640 |
| 2.55 x |
| $ | 129,822 |
| 2.94 x |
| ||||
Rehab |
| 7 |
| 95,322 |
| 8,815 |
| 343 |
| 18 |
| 487 |
| 59.6 |
| 19,095 |
| 1.65 x |
| 23,063 |
| 2.00 x |
| |||||||||
Specialty |
| 2 |
| 63,710 |
| 3,686 |
| 153 |
| 24 |
| 37 |
| N/A |
| 15,949 |
| 3.42 x |
| 18,561 |
| 3.98 x |
| |||||||||
LTACH |
| 3 |
| 35,205 |
| 5,982 |
| — |
| 14 |
| 244 |
| 61.9 |
| 16,803 |
| 2.56 x |
| 21,488 |
| 3.27 x |
| |||||||||
|
| 20 |
| $ | 705,514 |
| $ | 66,794 |
| $ | 2,781 |
| 23 |
| 2,705 |
| 56.1 |
| $ | 164,487 |
| 2.46 x |
| $ | 192,934 |
| 2.88 x |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDAR(1) |
| EBITDARM(1) |
| |||||||||||||
Secured Loan |
| Property |
|
|
| Interest |
|
|
| Average |
|
|
| Occupancy |
|
|
|
|
|
|
|
|
| |||||||||
Portfolio |
| Count |
| Investment |
| Income |
|
|
| Age (Years) |
| Beds |
| %(1) |
| Amount |
| DSC |
| Amount |
| DSC |
| |||||||||
Acute care |
| 1 |
| $ | 35,308 |
| $ | 2,251 |
|
|
| 10 |
| 58 |
| 53.8 |
| $ | 9,458 |
| 3.15 x |
| $ | 11,138 |
| 3.71 x |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Other Debt |
|
|
|
|
| Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Investments |
|
|
| Investment |
| Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Acute care |
|
|
| $ | 258,400 |
| $ | 18,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Specialty |
|
|
| 83,709 |
| 12,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
| $ | 342,109 |
| $ | 31,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Total |
| 21 |
| $ | 1,082,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| |
(1) Certain operators in HCP’s hospital portfolio are not required under their respective leases to provide operational data. | |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
36 |
Consolidated Hospital Portfolio |
As of and for the nine months ended September 30, 2008, dollars in thousands
Portfolio Diversification
Operator Concentration
|
| Properties |
| Investment |
| Rental Revenues & |
|
|
| Occupancy |
| EBITDAR |
| EBITDARM |
| ||||||||
Operator(1) |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Beds |
| % |
| CFC/DSC |
| CFC/DSC |
| ||
HCA |
| 1 |
| — |
| $ | 424,473 |
| 39 |
| $ | 34,659 |
| 35 |
| 598 |
| N/A |
| N/A |
| N/A |
|
Tenet Healthcare Corp |
| 6 |
| — |
| 339,885 |
| 32 |
| 32,125 |
| 32 |
| 1,240 |
| 55.0 |
| 2.56 x |
| 2.95 x |
| ||
Cirrus Health |
| 2 |
| — |
| 130,419 |
| 12 |
| 14,998 |
| 15 |
| 37 |
| N/A |
| 3.42 x |
| 3.98 x |
| ||
HealthSouth |
| 5 |
| 80 |
| 55,981 |
| 5 |
| 6,206 |
| 6 |
| 372 |
| 58.2 |
| 2.84 x |
| 3.23 x |
| ||
Other |
| 7 |
| 71 |
| 132,173 |
| 12 |
| 12,150 |
| 12 |
| 516 |
| 53.0 |
| 1.71 x |
| 2.25 x |
| ||
|
| 21 |
| 43 |
| $ | 1,082,931 |
| 100 |
| $ | 100,138 |
| 100 |
| 2,763 |
| 56.0 |
| 2.49 x |
| 2.92 x |
|
Geographic Concentration(1)(2)
|
| Property |
| Investment |
| Rental Revenues & Interest |
|
|
|
|
| EBITDAR |
| EBITDARM |
|
|
| ||||||
State |
| Count |
| Amount |
| % |
| Amount |
| % |
| Beds |
| Occupancy % |
| CFC/DSC |
| CFC/DSC |
|
|
| ||
TX |
| 5 |
| $ | 260,084 |
| 35 |
| $ | 24,092 |
| 35 |
| 947 |
| 53.5 |
| 1.25 x |
| 1.68 x |
|
|
|
CA |
| 3 |
| 155,983 |
| 21 |
| 13,836 |
| 20 |
| 319 |
| 39.1 |
| 1.38 x |
| 1.67 x |
|
|
| ||
GA |
| 2 |
| 76,735 |
| 10 |
| 8,569 |
| 13 |
| 274 |
| 70.2 |
| 4.29 x |
| 4.81 x |
|
|
| ||
LA |
| 4 |
| 65,719 |
| 9 |
| 5,101 |
| 7 |
| 343 |
| 49.4 |
| 2.21 x |
| 2.69 x |
|
|
| ||
Other |
| 7 |
| 182,301 |
| 25 |
| 17,447 |
| 25 |
| 880 |
| 65.2 |
| 3.22 x |
| 3.71 x |
|
|
| ||
|
| 21 |
| $ | 740,822 |
| 100 |
| $ | 69,045 |
| 100 |
| 2,763 |
| 56.0 |
| 2.49 x |
| 2.92 x |
|
|
|
| |
(1) Certain operators in HCP’s hospital portfolio are not required under their respective leases to provide operational data. (2) Geographic concentration excludes Other Debt Investments as the investment and revenues associated with those assets cannot be allocated to a particular geographic region. | |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
37 |
Consolidated Hospital Portfolio |
Dollars in thousands
Portfolio Trends
|
|
|
|
|
|
| |||||||||||||||||||||
|
| Same Property Portfolio |
|
| Total Portfolio |
| |||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the Year to Date Ended |
|
| As of and for the Twelve Months Ended |
| |||||||||||||||||||
|
| 09/30/08 |
| 06/30/08 |
| Change % |
| 09/30/08 |
| 09/30/07 |
| Change % |
|
| 09/30/08 |
| 06/30/08(1) |
| 09/30/07(1) |
| |||||||
Total hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Property count |
| 14 |
| 14 |
|
|
| 14 |
| 14 |
|
|
|
| 21 |
| 21 |
| 37 |
| |||||||
Investment |
| $ | 464,895 |
| $ | 453,971 |
| 2.4 |
| $ | 464,895 |
| $ | 458,310 |
| 1.4 |
|
| $ | 1,082,931 |
| $ | 1,077,322 |
| $ | 1,082,798 |
|
Beds |
| 1,748 |
| 1,766 |
| (1.0 | ) | 1,748 |
| 1,766 |
| (1.0 | ) |
| 2,763 |
| 2,781 |
| 4,402 |
| |||||||
Occupancy % |
| 54.7 |
| 53.7 |
| 1.0 |
| 54.7 |
| 53.3 |
| 1.4 |
|
| 56.0 |
| 54.3 |
| 54.4 |
| |||||||
EBITDAR |
| $ | 151,692 |
| $ | 154,328 |
| (1.7 | ) | $ | 151,692 |
| $ | 133,970 |
| 13.2 |
|
| $ | 173,945 |
| $ | 175,280 |
| $ | 251,106 |
|
EBITDAR CFC/DSC |
| 2.66 x |
| 2.72 x |
| (2.2 | ) | 2.66 x |
| 2.69 |
| (1.1 | ) |
| 2.49 x |
| 2.53 x |
| 2.46 |
| |||||||
EBITDARM |
| $ | 174,645 |
| $ | 177,186 |
| (1.4 | ) | $ | 174,645 |
| $ | 153,134 |
| 14.0 |
|
| $ | 204,072 |
| $ | 205,199 |
| $ | 291,098 |
|
EBITDARM CFC/DSC |
| 3.06 x |
| 3.12 x |
| (1.9 | ) | 3.06 x |
| 3.08 |
| (0.6 | ) |
| 2.92 x |
| 2.97 x |
| 2.85 x |
| |||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Rental revenues |
| $ | 13,888 |
| $ | 16,253 |
| (14.6 | ) | $ | 41,943 |
| $ | 42,705 |
| (1.8 | ) |
|
|
|
|
|
|
| |||
Operating expenses |
| (18 | ) | (37 | ) | (51.4 | ) | (55 | ) | (3 | ) | NM | (2) |
|
|
|
|
|
|
| |||||||
|
| $ | 13,870 |
| $ | 16,216 |
| (14.5 | ) | $ | 41,888 |
| $ | 42,702 |
| (1.9 | ) |
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Straight-line rents |
| (6 | ) | (6 | ) | — |
| (18 | ) | (400 | ) | (95.5 | ) |
|
|
|
|
|
|
| |||||||
Below market rents, net |
| (25 | ) | (25 | ) | — |
| (75 | ) | (75 | ) | — |
|
|
|
|
|
|
|
| |||||||
|
| $ | 13,839 |
| $ | 16,185 |
| (14.5 | ) | $ | 41,795 |
| $ | 42,227 |
| (1.0 | ) |
|
|
|
|
|
|
|
Lease Expirations and Secured Loan Maturities(3)
|
|
|
| Annualized Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
| Properties |
| Amount |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2008 (Three months) |
| — |
| $ | — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
| 2 |
| 13,961 |
| 21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2010 |
| 1 |
| 2,973 |
| 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2011 |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2012 |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2013 |
| 1 |
| 2,400 |
| 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2014 |
| 3 |
| 16,018 |
| 24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2015 |
| 1 |
| 369 |
| 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2016 |
| 1 |
| 3,001 |
| 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2017 |
| 2 |
| 4,413 |
| 6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Thereafter |
| 9 |
|
| 24,704 |
| 36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20 |
| $ | 67,839 |
| 100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(1) Amounts are reflected as originally reported. (2) Percentage change not meaningful. (3) Lease expirations exclude one facility in Plaquemine, LA where the lease has been terminated. | |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
38 |
Consolidated Skilled Nursing Portfolio
As of and for the nine months ended September 30, 2008, dollars in thousands
Owned |
|
|
|
|
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||||
Property |
| Property |
| Investment |
| Rental |
| Operating |
| Age |
| Beds |
| Occupancy |
| Amount |
| CFC |
| Amount |
| CFC |
| ||||||
Skilled nursing |
| 48 |
| $ | 254,759 |
| $ | 26,969 |
| $ | — |
| 23 |
| 5,681 |
| 86.0 |
| $ | 50,875 |
| 1.47 x |
| $ | 70,270 |
| 2.03 x |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||||||
Secured Loan |
| Property |
| Investment |
| Interest |
|
|
| Age |
| Beds |
| Occupancy |
| Amount |
| DSC |
| Amount |
| DSC |
| ||||||
Skilled nursing |
| 3 |
| $ | 15,012 |
| $ | 1,282 |
|
|
| 30 |
| 442 |
| 84.5 |
| $ | 5,189 |
| 2.16 x |
| $ | 6,552 |
| 2.73 x |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mezzanine |
|
|
| Investment |
| Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Skilled nursing |
|
|
| $ | 902,726 |
| $ | 63,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
| 51 |
| $ | 1,172,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Portfolio Diversification
|
| Properties |
| Investment |
| Rental Revenues & |
|
|
|
|
|
|
|
|
| ||||||||
Operator |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Beds |
| Occupancy |
| EBITDAR |
| EBITDARM |
| ||
HCR ManorCare(1) |
| — |
| — |
| $ | 902,726 |
| 77 |
| $ | 63,515 |
| 69 |
| N/A |
| N/A |
| N/A |
| N/A |
|
Formation Capital |
| 9 |
| 100 |
| 63,100 |
| 6 |
| 5,090 |
| 6 |
| 934 |
| 95.3 |
| 1.70 x |
| 2.19 x |
| ||
Covenant Care |
| 12 |
| — |
| 61,891 |
| 5 |
| 6,653 |
| 7 |
| 1,373 |
| 82.7 |
| 1.59 x |
| 2.13 x |
| ||
Sun HealthCare |
| 6 |
| 67 |
| 38,848 |
| 3 |
| 3,347 |
| 4 |
| 841 |
| 84.3 |
| 2.13 x |
| 2.67 x |
| ||
Kindred |
| 9 |
| 100 |
| 38,117 |
| 3 |
| 6,039 |
| 6 |
| 1,288 |
| 87.3 |
| 1.22 x |
| 1.96 x |
| ||
Trilogy Health Services |
| 5 |
| 100 |
| 33,452 |
| 3 |
| 3,474 |
| 4 |
| 569 |
| 90.5 |
| 1.64 x |
| 2.03 x |
| ||
Other |
| 10 |
| — |
| 34,363 |
| 3 |
| 3,648 |
| 4 |
| 1,118 |
| 78.8 |
| 0.79 x |
| 1.39 x |
| ||
|
| 51 |
| 53 |
| $ | 1,172,497 |
| 100 |
| $ | 91,766 |
| 100 |
| 6,123 |
| 85.9 |
| 1.52 x |
| 2.08 x |
|
(1) | For the Company’s HCR ManorCare investment, DSC is calculated as the quotient of i) Facility EBITDAR with an imputed management fee of 4% and EBITDARM for the most recent quarter(s) of available data since HCR ManorCare’s December 2007 recapitalization divided by ii) the borrower’s pro forma debt service calculated as the product of a) total outstanding senior and mezzanine debt for the relevant period(s) multiplied by b) HCR ManorCare’s hedged interest rate maximum exposure of 5.25%. Currently, the EBITDAR and EBITDARM DSC for this investment is 1.33 x and 1.69 x, respectively. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
39 |
Consolidated Skilled Nursing Portfolio
As of and for the nine months ended September 30, 2008, dollars in thousands
Geographic Concentration(1)
|
| Property |
| Investment |
| Rental Revenues & Interest |
|
|
|
|
| EBITDAR |
| EBITDARM |
| ||||||
State |
| Count |
| Amount |
| % |
| Amount |
| % |
| Beds |
| Occupancy |
| CFC/DSC |
| CFC/DSC |
| ||
VA |
| 9 |
| $ | 63,100 |
| 23 |
| $ | 5,090 |
| 18 |
| 934 |
| 95.3 |
| 1.70 x |
| 2.19 x |
|
IN |
| 8 |
| 46,090 |
| 17 |
| 4,935 |
| 17 |
| 870 |
| 85.9 |
| 1.51 x |
| 1.94 x |
| ||
OH |
| 8 |
| 43,263 |
| 16 |
| 5,181 |
| 18 |
| 1,120 |
| 77.9 |
| 1.31 x |
| 1.85 x |
| ||
CO |
| 4 |
| 28,403 |
| 11 |
| 2,298 |
| 8 |
| 602 |
| 91.0 |
| 2.38 x |
| 2.96 x |
| ||
CA |
| 3 |
| 14,347 |
| 5 |
| 1,583 |
| 6 |
| 379 |
| 86.8 |
| 1.47 x |
| 2.16 x |
| ||
NV |
| 2 |
| 13,100 |
| 5 |
| 1,566 |
| 6 |
| 267 |
| 90.8 |
| 1.86 x |
| 2.54 x |
| ||
Other |
| 17 |
| 61,468 |
| 23 |
| 7,598 |
| 27 |
| 1,951 |
| 82.9 |
| 1.15 x |
| 1.81 x |
| ||
|
| 51 |
| $ | 269,771 |
| 100 |
| $ | 28,251 |
| 100 |
| 6,123 |
| 85.9 |
| 1.52 x |
| 2.08 x |
|
Portfolio Trends
|
| Same Property Portfolio |
|
| Total Portfolio |
| |||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the Year to Date Ended |
|
| As of and for the Twelve Months Ended |
| |||||||||||||||||||
|
| 09/30/08 |
| 06/30/08 |
| Change % |
| 09/30/08 |
| 09/30/07 |
| Change % |
|
| 09/30/08 |
| 06/30/08(2) |
| 09/30/07(2) |
| |||||||
Total skilled nursing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Property count |
| 48 |
| 48 |
|
|
| 48 |
| 48 |
|
|
|
| 51 |
| 51 |
| 65 |
| |||||||
Investment |
| $ | 254,759 |
| $ | 242,737 |
| 5.0 |
| $ | 254,759 |
| $ | 240,450 |
| 6.0 |
|
| $ | 1,172,497 |
| $ | 1,160,670 |
| $ | 321,572 |
|
Beds |
| 5,681 |
| 5,637 |
| 0.8 |
| 5,681 |
| 5,608 |
| 1.3 |
|
| 6,123 |
| 6,079 |
| 7,560 |
| |||||||
Occupancy % |
| 86.0 |
| 85.9 |
| 0.1 |
| 86.0 |
| 84.6 |
| 1.4 |
|
| 85.9 |
| 85.9 |
| 84.5 |
| |||||||
EBITDAR |
| $ | 50,875 |
| $ | 47,972 |
| 6.1 |
| $ | 50,875 |
| $ | 47,451 |
| 7.2 |
|
| $ | 56,064 |
| $ | 53,082 |
| $ | 67,606 |
|
EBITAR CFC/DSC |
| 1.47 x |
| 1.41 x |
| 4.3 |
| 1.47 x |
| 1.39 x |
| 5.8 |
|
| 1.52 x |
| 1.46 x |
| 1.51 x |
| |||||||
EBITDARM |
| $ | 70,270 |
| $ | 66,801 |
| 5.2 |
| $ | 70,270 |
| $ | 64,158 |
| 9.5 |
|
| $ | 76,822 |
| $ | 73,260 |
| $ | 89,763 |
|
EBITDARM CFC/DSC |
| 2.03 x |
| 1.97 x |
| 3.0 |
| 2.03 x |
| 1.88 x |
| 8.0 |
|
| 2.08 x |
| 2.01x |
| 2.00 x |
| |||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Rental revenues |
| $ | 9,161 |
| $ | 9,015 |
| 1.6 |
| $ | 26,969 |
| $ | 26,183 |
| 3.0 |
|
|
|
|
|
|
|
| |||
Operating expenses |
| — |
| — |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
| |||||||
|
| $ | 9,161 |
| $ | 9,015 |
| 1.6 |
| $ | 26,969 |
| $ | 26,183 |
| 3.0 |
|
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Straight-line rents |
| (109 | ) | (138 | ) | (21.0 | ) | (406 | ) | (538 | ) | (24.5 | ) |
|
|
|
|
|
|
| |||||||
Above market rents, net |
| — |
| 24 |
| (100.0 | ) | 53 |
| 87 |
| (39.1 | ) |
|
|
|
|
|
|
| |||||||
|
| $ | 9,052 |
| $ | 8,901 |
| 1.7 |
| $ | 26,616 |
| $ | 25,732 |
| 3.4 |
|
|
|
|
|
|
|
|
(1) | Geographic concentration excludes Mezzanine Loans as the investment and revenues associated with these assets cannot be allocated to a particular geographic region. |
(2) | Amounts are reflected as originally reported. |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
40 |
Consolidated Skilled Nursing Portfolio
As of and for the nine months ended September 30, 2008, dollars in thousands
Lease Expirations and Secured Loan Maturities
|
|
|
| Annualized Revenues |
| |||
|
| Properties |
| Amount |
| % |
| |
2008 (Three months) |
| 1 |
| $ | 637 |
| 2 |
|
2009 |
| 5 |
| 2,440 |
| 7 |
| |
2010 |
| 2 |
| 1,530 |
| 4 |
| |
2011 |
| — |
| — |
| — |
| |
2012 |
| — |
| — |
| — |
| |
2013 |
| 10 |
| 6,899 |
| 18 |
| |
2014 |
| 9 |
| 6,672 |
| 18 |
| |
2015 |
| 5 |
| 3,197 |
| 9 |
| |
2016 |
| 5 |
| 4,837 |
| 13 |
| |
2017 |
| 9 |
| 7,953 |
| 21 |
| |
Thereafter |
| 5 |
| 2,983 |
| 8 |
| |
|
| 51 |
| $ | 37,148 |
| 100 |
|
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
41 |
Unconsolidated Portfolio
As of and for the nine months ended September 30, 2008, dollars and square feet in thousands
|
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM |
| |||||||||
HCP Ventures II (35%) (1) |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Units |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC |
| |||||
Assisted living |
| 2 |
| $ | 11,077 |
| $ | 669 |
| $ | — |
| 12 |
| 111 |
| 91.6 |
| $ | 589 |
| 0.79 x |
| $ | 790 |
| 1.05 x |
|
Independent living |
| 20 |
| 978,522 |
| 55,615 |
| 3 |
| 19 |
| 5,074 |
| 94.3 |
| 65,197 |
| 1.01 x |
| 72,839 |
| 1.13 x |
| |||||
CCRCs |
| 3 |
| 107,668 |
| 6,298 |
| 1 |
| 13 |
| 444 |
| 91.6 |
| 6,983 |
| 0.95 x |
| 8,004 |
| 1.09 x |
| |||||
|
| 25 |
| $ | 1,097,267 |
| $ | 62,582 |
| $ | 4 |
| 18 |
| 5,629 |
| 94.0 |
| $ | 72,769 |
| 1.00 x |
| $ | 81,633 |
| 1.13 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
HCP Ventures III (30%) |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Square Feet |
| Occupancy % |
|
|
|
|
|
|
|
|
| |||||
On-Campus |
| 9 |
| $ | 108,135 |
| $ | 10,322 |
| $ | 3,318 |
| 8 |
| 606 |
| 100.0 |
|
|
|
|
|
|
|
|
| ||
Off-Campus |
| 4 |
| 32,482 |
| 3,306 |
| 1,236 |
| 7 |
| 183 |
| 100.0 |
|
|
|
|
|
|
|
|
| |||||
|
| 13 |
| $ | 140,617 |
| $ | 13,628 |
| $ | 4,554 |
| 8 |
| 789 |
| 100.0 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
HCP Ventures IV (20%) |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Square Feet |
| Occupancy %(2) |
|
|
|
|
|
|
|
|
| |||||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
On-Campus |
| 23 |
| $ | 223,588 |
| $ | 18,572 |
| $ | 8,964 |
| 20 |
| 1,203 |
| 83.2 |
|
|
|
|
|
|
|
|
| ||
Off-Campus |
| 27 |
| 322,104 |
| 26,237 |
| 10,699 |
| 17 |
| 1,368 |
| 89.2 |
|
|
|
|
|
|
|
|
| |||||
Life science |
| 4 |
| 23,855 |
| 1,439 |
| 216 |
| 11 |
| 111 |
| 100.0 |
|
|
|
|
|
|
|
|
| |||||
Hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
LTACH |
| 1 |
| 12,184 |
| 1,061 |
| 152 |
| 2 |
| N/A |
| N/A |
|
|
|
|
|
|
|
|
| |||||
Rehab |
| 1 |
| 13,965 |
| 1,039 |
| 7 |
| 2 |
| N/A |
| 53.2 |
|
|
|
|
|
|
|
|
| |||||
Specialty |
| 2 |
| 55,224 |
| 4,110 |
| 522 |
| 4 |
| N/A |
| N/A |
|
|
|
|
|
|
|
|
| |||||
|
| 58 |
| $ | 650,920 |
| $ | 52,458 |
| $ | 20,560 |
| 17 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| �� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Property |
|
|
| Rental |
| Operating |
| Average |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
HCP Life Science (50%-63%) |
| Count |
| Investment |
| Revenues |
| Expenses |
| Age (Years) |
| Square Feet |
| Occupancy % |
|
|
|
|
|
|
|
|
| |||||
San Francisco |
| 2 |
| $ | 40,040 |
| $ | 4,308 |
| $ | 1,011 |
| 11 |
| 147 |
| 100.0 |
|
|
|
|
|
|
|
|
| ||
San Diego |
| 2 |
| 39,806 |
| 3,338 |
| 387 |
| 13 |
| 131 |
| 96.8 |
|
|
|
|
|
|
|
|
| |||||
|
| 4 |
| $ | 79,846 |
| $ | 7,646 |
| $ | 1,398 |
| 12 |
| 278 |
| 98.5 |
|
|
|
|
|
|
|
|
|
(1) All facilities are operated by Horizon Bay Senior Communities.
(2) Hospital occupancy information not provided by the respective operator/tenant.
See Reporting Definitions and Supplemental Financial Measures Disclosures | |||||||||||
|
|
|
|
|
|
|
|
|
|
| 42 |
Unconsolidated Portfolio
As of and for the nine months ended September 30, 2008, dollars in thousands
Portfolio Diversification
Geographic Concentration
|
| Investment |
| Rental |
| Operating |
| ||||||
State |
|
| Amount |
| % |
| Revenues |
| Expenses |
| |||
TX |
| $ | 606,730 |
| 31 |
| $ | 43,351 |
| $ | 10,585 |
| |
FL |
| 435,016 |
| 22 |
| 27,722 |
| 4,027 |
| ||||
IL |
| 235,372 |
| 12 |
| 14,627 |
| 1,452 |
| ||||
RI |
| 200,885 |
| 10 |
| 12,596 |
| 1 |
| ||||
CA |
| 153,695 |
| 8 |
| 11,558 |
| 1,398 |
| ||||
AZ |
| 113,148 |
| 6 |
| 7,670 |
| 2,181 |
| ||||
AL |
| 57,981 |
| 3 |
| 5,129 |
| 1,504 |
| ||||
TN |
| 34,364 |
| 2 |
| 3,011 |
| 1,213 |
| ||||
MO |
| 33,181 |
| 2 |
| 2,512 |
| 1,026 |
| ||||
NC |
| 23,855 |
| 1 |
| 1,439 |
| 216 |
| ||||
Other |
| 74,423 |
| 3 |
| 6,699 |
| 2,913 |
| ||||
|
| $ | 1,968,650 |
| 100 |
| $ | 136,314 |
| $ | 26,516 |
| |
See Reporting Definitions and Supplemental Financial Measures Disclosures | |
| |
43 |
Reporting Definitions
Acute Care Hospitals. Acute care hospitals offer a wide range of services such as fully-equipped operating and recovery rooms, obstetrics, radiology, intensive care, open heart surgery and coronary care, neurosurgery, neonatal intensive care, magnetic resonance imaging, nursing units, oncology, clinical laboratories, respiratory therapy, physical therapy, nuclear medicine, rehabilitation services and outpatient services.
Annualized Debt Service. The most recent monthly interest and principal amortization due to HCP as of period end annualized for twelve months. The Company uses Annualized Debt Service for purposes of determining Debt Service Coverage.
Annualized Revenues. The most recent monthly base rent, income from direct financing leases and/or interest income annualized for twelve months. Annualized Revenues do not include tenant recoveries, additional rents and non-cash revenue adjustments (i.e., straight-line rents, amortization of above and below market lease intangibles, interest accretion and deferred revenues). The Company uses Annualized Revenues for the purpose of determining Relationship Concentrations, Lease Expirations and Secured Loan Maturities.
Assets Held for Sale. Assets of discontinued operations in accordance with –Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
Assisting Living Facility (“ALF”). A senior housing facility that predominantly consists of assisted living units is classified by the Company as an ALF.
Beds/Units/Square Feet. Senior housing facilities are measured in units (e.g., studio, one or two bedroom units). MOBs and life science facilities are measured in square feet. Hospitals and skilled nursing facilities are measured in licensed bed count.
Book Value. The carrying amount as reported in the Company’s financial statements.
Cash Flow Coverage (“CFC”). Facility EBITDAR or Facility EBITDARM for the most recent twelve months of available data divided by the Same Period Rent. Cash Flow Coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR or Facility EBITDARM. The coverages shown exclude newly completed facilities under start-up, vacant facilities and facilities for which data is not available or meaningful.
Consolidated Assets. Total assets as reported in the Company’s consolidated financial statements.
Consolidated Book Capitalization. The carrying amount of (i) Consolidated Debt, plus (ii) minority interests, plus (iii) stockholders’ equity, as reported in the Company’s consolidated financial statements.
Consolidated Debt. The carrying amount of bank line of credit, bridge loan (if applicable), senior unsecured notes, mortgage debt and other debt as reported in the Company’s consolidated financial statements.
Consolidated Gross Assets. The carrying amount of total assets, excluding investments in and advances to unconsolidated joint ventures, after adding back accumulated depreciation and amortization, as reported in the Company’s consolidated financial statements.
Consolidated Market Capitalization. Consolidated Debt at Book Value plus Consolidated Market Equity.
Consolidated Market Equity. The total number of outstanding shares of the Company’s common stock multiplied by the closing price per share of its common stock on the New York Stock Exchange as of period end, plus the total number of convertible partnership units multiplied by the closing price per share of its common stock on the New York Stock Exchange as of period end (adjusted for stock splits), plus the total number of outstanding shares of the Company’s preferred stock multiplied by the closing price of its preferred stock on the New York Stock Exchange as of period end.
Consolidated Secured Debt. Mortgage debt secured by real estate excluding debt on assets held for sale as reported in the Company’s consolidated financial statements.
Consolidated Undepreciated Book Capitalization. Consolidated Book Capitalization after adding back accumulated depreciation and amortization on the Company’s real estate assets, as reported in the Company’s consolidated financial statements.
Continuing Care Retirement Community (“CCRC”). A senior housing facility which provides at least three levels of care (i.e., independent living, assisted living and skilled nursing) is classified by the Company as a CCRC.
Debt Service. The periodic payment of interest expense and principal amortization on secured loans.
Debt Service Coverage (“DSC”). Facility EBITDAR or Facility EBITDARM for the most recent twelve months of available data divided by Annualized Debt Service. Debt Service Coverage is a supplemental measure of the property’s ability to generate sufficient cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related obligations to the Company under loan agreements. However, its usefulness is limited by the same factors that limit the usefulness of Facility EBITDAR or Facility EBITDARM. The coverages shown exclude newly completed facilities under start-up, vacant facilities and facilities for which data is not available or meaningful.
Development. Includes ground-up construction and redevelopments.
Direct Financing Lease (“DFL”). The Company uses the direct finance method of accounting to record income from DFLs. For leases accounted for as DFLs, future minimum lease payments are recorded as a receivable. The difference between the future minimum lease payments and the estimated residual values less the cost of the properties is recorded as unearned income. Unearned income is deferred and amortized to income over the lease terms to provide a constant yield. Investments in DFLs are presented net of unamortized interest income.
Estimated Completion Date. Management’s estimate of the date the core and shell structure improvements are expected to be or have been completed.
| |
| |
44 |
Reporting Definitions
Facility EBITDAR (“EBITDAR”). Earnings before interest, taxes, depreciation, amortization and rent for a particular facility accruing to the operator/tenant of the property (not the Company). The Company uses Facility EBITDAR in determining Cash Flow Coverage and Debt Service Coverage. Facility EBITDAR has limitations as an analytical tool. Facility EBITDAR does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDAR does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management. The Company utilizes Facility EBITDAR as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company. Facility EBITDAR includes the greater of (i) contractual management fees or (ii) an imputed management fee of 2% for acute care hospitals and 5% for skilled nursing facilities and senior housing facilities which the Company believes represents typical management fees in their respective industries. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.
Facility EBITDARM (“EBITDARM”). Earnings before interest, taxes, depreciation, amortization, rent and management fees for a particular facility accruing to the operator/tenant of the property (not the Company). The Company uses Facility EBITDARM in determining Cash Flow Coverage and Debt Service Coverage. Facility EBITDARM has limitations as an analytical tool. Facility EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDARM does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management. The Company utilizes Facility EBITDARM as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.
GAAP. U.S. generally accepted accounting principles.
HCP Life Science. Includes three unconsolidated joint ventures between the Company and an institutional capital partner for which the Company is the managing member. HCP Life Science includes the following partnerships: (i) Torrey Pines Science Center LP (50%), (ii) Britannia Biotech Gateway LP (55%) and (iii) LASDK LP (63%). The unconsolidated joint ventures were acquired as part of its purchase of Slough Estates USA Inc. on August 1, 2007.
HCP Ventures II. An unconsolidated joint venture formed on January 5, 2007 between the Company and an institutional capital partner, for which the Company is the managing member and has a 35% interest.
HCP Ventures III. An unconsolidated joint venture formed on October 27, 2006 between the Company and an institutional capital partner, for which the Company is the managing member and has an effective 25.5% interest.
HCP Ventures IV. An unconsolidated joint venture formed on April 30, 2007 between the Company and an institutional capital partner, for which the Company is the managing member and has a 20% interest.
Independent Living Facility (“ILF”). A senior housing facility that predominantly consists of independent living units is classified by the Company as an ILF.
Investment. The carrying amount of real estate assets, including intangibles, after adding back accumulated depreciation and amortization, and the carrying amount of mortgage loans receivable. Excludes real estate assets held for sale and classified as discontinued operations, unless otherwise specified.
Investment Management Business. Excludes unconsolidated joint ventures outside of its unconsolidated institutional joint ventures: (i) HCP Life Science, (ii) HCP Ventures II, (iii) HCP Ventures III and (iv) HCP Ventures IV.
Life Science. Laboratory and office space primarily for biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry.
Long-Term Acute Care Hospitals (“LTACHs”). LTACHs provide care for patients with complex medical conditions that require longer stays and more intensive care, monitoring or emergency back-up than that available in most skilled nursing-based programs.
Marketable Securities. The Company classifies its existing marketable equity and debt securities as available-for-sale in accordance with provisions of Statement of Financial Accounting Standards No. 115. These securities are carried at fair market value, with unrealized gains and losses reported in stockholders’ equity as a component of accumulated other comprehensive income.
MOB. Medical office building.
Occupancy. For MOBs and life science facilities, occupancy represents the percentage of total rentable square feet leased where rental payments have commenced, including month-to-month leases, as of the date reported. For hospitals, skilled nursing facilities and senior housing facilities, occupancy represents the facilities’ operating occupancy for the trailing twelve months of the most recent quarter of available data. The percentages are calculated based on licensed beds, available beds and units for hospitals, skilled nursing facilities and senior housing facilities, respectively. The percentages shown exclude newly completed facilities under start-up, vacant facilities and facilities for which data is not available or meaningful. All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.
Operating Portfolio. Represents owned properties, direct financing leases, loans and marketable debt securities, and excludes properties under development.
Other Debt Investments. Marketable debt securities and loans not secured by real estate.
Percentage Pre-leased. Represents the percentage of a development project’s estimated square footage attributed to signed leases.
Pooled Leases. Two or more leases to the same operator/tenant or their subsidiaries under which their obligations are combined by virtue of a master lease, or multiple master leases, a pooling agreement, or multiple pooling agreements, or cross-guaranties. Sunrise Senior Living percentage pooled consists of 100 assets under 12 separate pools.
| |
| |
45 |
Reporting Definitions
Redevelopment projects. Properties that require significant capital expenditures (generally more than 25% of acquired cost or existing basis) to achieve stabilization or to change the use of the properties.
Rehabilitation Hospitals (“Rehab”). Rehabilitation hospitals provide inpatient and outpatient care for patients who have sustained traumatic injuries or illnesses, such as spinal cord injuries, strokes, head injuries, orthopedic problems, work-related disabilities and neurological diseases.
Renewal Rate. The Company defines renewal rate as the ratio of total square feet expiring and available for lease to total renewed square feet, excluding the square feet of tenants that terminate by default or buy-out prior to the expiration of their lease.
Rental Revenues. Represents rental and related revenues, tenant recoveries and income from direct financing leases.
Same Period Rent. The base rent plus additional rent due to the Company over the most recent trailing twelve-month period as of period end. The Company uses Same Period Rent for purposes of determining property-level Cash Flow Coverage.
Same Property Portfolio (“SPP”). An important component of the Company’s evaluation of the operating performance of its properties. The Company defines its same property portfolio each quarter as those properties that have been in operation throughout the current year and the prior year and that were also in operation at January 1st of the prior year. Newly acquired assets, developments and redevelopments in process and assets classified in discontinued operations are excluded from the same property portfolio. Same property statistics allow management to evaluate the NOI of its real estate portfolio as a consistent population from period to period and eliminates the effects of changes in the composition of the properties on performance measures.
Senior Housing. ALFs, ILFs and CCRCs. For reporting purposes, the Company’s senior housing portfolio also includes a school formerly operated as an assisted living facility and six health and wellness centers.
Specialty Hospitals. Specialty hospitals are licensed as acute care hospitals but focus on providing care in specific areas such as cardiac, orthopedic and women’s conditions, or specific procedures such as surgery and are less likely to provide emergency services.
Square Feet Owned. The square footage for properties owned by the Company or its consolidated joint ventures, and excludes square footage for development properties prior to completion.
Stabilization. Assets are considered stabilized at the earlier of achieving 90% occupancy or one year from the completion of development or redevelopment
activities.
Total Book Capitalization. Total Debt plus the carrying amount of minority interests plus the carrying amount of stockholders’ equity.
Total Debt. Consolidated Debt at Book Value plus the Company’s pro rata share of debt from unconsolidated joint ventures.
The following table details the calculation of Total Debt:
In thousands
|
| September 30, |
| December 31, |
| ||
|
| 2008 |
| 2007 |
| ||
Bank lines of credit |
| $ | — |
| $ | 951,700 |
|
Bridge loan |
| 520,000 |
| 1,350,000 |
| ||
Senior unsecured notes |
| 3,522,689 |
| 3,819,950 |
| ||
Mortgage debt |
| 1,804,069 |
| 1,277,291 |
| ||
Mortgage debt on assets held for sale |
| 978 |
| 3,470 |
| ||
Other debt |
| 102,602 |
| 108,496 |
| ||
Consolidated debt |
| 5,950,338 |
| 7,510,907 |
| ||
HCP’s share of unconsolidated debt(1) |
| 347,701 |
| 340,506 |
| ||
Total debt |
| $ | 6,298,039 |
| $ | 7,851,413 |
|
Total Gross Assets. Consolidated Gross Assets plus the Company’s pro rata share of total assets from unconsolidated joint ventures, after adding back accumulated depreciation and amortization.
The following table details the calculation of Total Gross Assets:
In thousands
|
| September 30, |
| December 31, |
| ||
|
| 2008 |
| 2007 |
| ||
Consolidated total assets |
| $ | 12,031,404 |
| $ | 12,521,772 |
|
Investments in and advances to unconsolidated joint ventures |
| (275,593 | ) | (248,894 | ) | ||
Accumulated depreciation and amortization |
| 940,355 |
| 722,917 |
| ||
Accumulated depreciation and amortization from assets held for sale |
| 4,989 |
| 107,503 |
| ||
Consolidated gross assets |
| $ | 12,701,155 |
| $ | 13,103,298 |
|
HCP’s share of unconsolidated total assets(1) |
| 569,150 |
| 555,343 |
| ||
HCP’s share of unconsolidated accumulated depreciation and amortization(1) |
| 41,889 |
| 17,593 |
| ||
Total gross assets |
| $ | 13,312,194 |
| $ | 13,676,234 |
|
(1) Excludes unconsolidated joint ventures outside of the investment management business. | |
| |
46 |
Reporting Definitions
Total Market Capitalization. Total Debt plus Consolidated Market Equity.
The following table details the calculation of Total Market Capitalization:
In thousands, except price data |
| September 30, 2008 |
| ||||||
|
| Shares/Units |
| Price |
| Value |
| ||
Common stock |
| 251,926 |
| $ | 40.13 |
| $ | 10,109,790 |
|
|
|
|
|
|
|
|
| ||
Convertible partnership units |
|
|
|
|
|
|
| ||
2 for 1(1) |
| 2,415 |
| 80.26 |
| 193,828 |
| ||
1 for 1(2) |
| 3,218 |
| 40.13 |
| 129,138 |
| ||
|
|
|
|
|
| 322,966 |
| ||
Preferred stock: |
|
|
|
|
|
|
| ||
7.25% Series E |
| 4,000 |
| 18.12 |
| 72,480 |
| ||
7.10% Series F |
| 7,820 |
| 18.20 |
| 142,324 |
| ||
|
|
|
|
|
| 214,804 |
| ||
|
|
|
|
|
|
|
| ||
Consolidated market equity |
|
|
|
|
| $ | 10,647,560 |
| |
|
|
|
|
|
|
|
| ||
Consolidated debt |
|
|
|
|
| 5,950,338 |
| ||
|
|
|
|
|
|
|
| ||
Consolidated market capitalization |
|
|
|
|
| $ | 16,597,898 |
| |
|
|
|
|
|
|
|
| ||
HCP’s share of unconsolidated debt(3) |
|
|
|
|
| 347,701 |
| ||
|
|
|
|
|
|
|
| ||
Total market capitalization |
|
|
|
|
| $ | 16,945,599 |
| |
Total Secured Debt. Consolidated secured debt plus the Company’s pro rata share of mortgage debt from unconsolidated joint ventures.
Total Undepreciated Book Capitalization. Total Book Capitalization after adding back accumulated depreciation and amortization on the Company’s real estate assets and the Company’s pro rata share of accumulated depreciation and amortization on real estate assets in unconsolidated joint ventures.
The following table details the calculation of Total Undepreciated Book Capitalization at:
In thousands
|
| September 30, |
| December 31, |
| ||
|
| 2008 |
| 2007 |
| ||
Total debt |
| $ | 6,298,039 |
| $ | 7,851,413 |
|
Total minority interests |
| 248,241 |
| 339,271 |
| ||
Total stockholders’ equity |
| 5,293,339 |
| 4,103,709 |
| ||
Total book capitalization |
| 11,839,619 |
| 12,294,393 |
| ||
Accumulated depreciation and amortization |
| 940,355 |
| 722,917 |
| ||
Accumulated depreciation and amortization from assets held for sale |
| 4,989 |
| 107,503 |
| ||
HCP’s share of unconsolidated accumulated depreciation and amortization(3) |
| 41,889 |
| 17,593 |
| ||
Total undepreciated book capitalization |
| $ | 12,826,852 |
| $ | 13,142,406 |
|
Yield. Yield is calculated as Net Operating Income, as adjusted, divided by total investment. For acquisitions, initial yields are calculated as projected Net Operating Income, twelve months forward, as adjusted, as of the closing date divided by total acquisition cost. The total acquisition cost basis includes the initial purchase price, the effects of adjusting assumed debt to market, lease intangible adjustments and all transaction costs.
|
(1) Each convertible partnership unit is exchangeable for an amount of cash approximating the then-current market value of two shares of the Company’s common stock at the time of conversion or, at the Company’s election, two shares of the Company’s common stock.
(2) Each convertible partnership unit is exchangeable for an amount of cash approximating the then-current market value of one share of the Company’s common stock at the time of conversion or, at the Company’s election, one share of the Company’s common stock.
(3) Excludes unconsolidated joint ventures outside of the investment management business.
| |
47 |
Supplemental Financial Measures Disclosures
Adjusted Fixed Charge Coverage. Adjusted EBITDA divided by Fixed Charges. The Company uses Adjusted Fixed Charge Coverage, a non-GAAP financial measure, as a measure of liquidity. The Company believes Adjusted Fixed Charge Coverage provides investors, particularly fixed income investors, relevant and useful information because it measures the Company’s ability to meet its interest payments on outstanding debt and pay dividends to its preferred stockholders. The Company’s various debt agreements contain covenants that require the Company to maintain ratios similar to Adjusted Fixed Charge Coverage and credit rating agencies utilize similar ratios in evaluating and determining the credit rating on certain debt instruments of the Company. However, since this ratio is derived from Adjusted EBITDA and Fixed Charges, its usefulness is limited by the same factors that limit the usefulness of Adjusted EBITDA and Fixed Charges. Further, the Company’s computation of Adjusted Fixed Charge Coverage may not be comparable to similar fixed charge coverage ratios reported by other companies.
The following table details the calculation of Adjusted Fixed Charge Coverage:
In thousands
|
| Three months ended |
| Nine Months ended |
| ||||||||
|
| September 30, |
| September 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 125,417 |
| $ | 322,148 |
| $ | 408,124 |
| $ | 538,720 |
|
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 83,249 |
| 103,707 |
| 265,054 |
| 254,434 |
| ||||
Discontinued operations |
| 15 |
| 202 |
| 166 |
| 1,931 |
| ||||
Income taxes: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 866 |
| (318 | ) | 4,385 |
| (860 | ) | ||||
Discontinued operations |
| 2 |
| 369 |
| 92 |
| 1,891 |
| ||||
Depreciation and amortization of real estate, in-place lease and other intangibles: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 77,659 |
| 70,418 |
| 233,920 |
| 184,132 |
| ||||
Discontinued operations |
| 47 |
| 3,886 |
| 5,832 |
| 17,748 |
| ||||
Equity income from unconsolidated joint ventures |
| (1,227 | ) | (1,242 | ) | (3,736 | ) | (3,758 | ) | ||||
HCP’s share of EBITDA from Investment Management Business |
| 10,760 |
| 10,246 |
| 32,430 |
| 26,882 |
| ||||
Other joint venture adjustments |
| 655 |
| 608 |
| 1,880 |
| 1,609 |
| ||||
EBITDA |
| 297,443 |
| 510,024 |
| 948,147 |
| 1,022,729 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Minority interests’ share in earnings |
| 5,803 |
| 6,018 |
| 17,055 |
| 17,992 |
| ||||
Gains on sales of real estate and real estate interest |
| (27,416 | ) | (286,153 | ) | (227,810 | ) | (402,410 | ) | ||||
Adjusted EBITDA |
| $ | 275,830 |
| $ | 229,889 |
| $ | 737,392 |
| $ | 638,311 |
|
|
|
|
|
|
|
|
|
|
| ||||
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| $ | 83,249 |
| $ | 103,707 |
| $ | 265,054 |
| $ | 254,434 |
|
Discontinued operations |
| 15 |
| 202 |
| 166 |
| 1,931 |
| ||||
HCP’s share of interest expense from Investment Management Business |
| 5,217 |
| 5,136 |
| 15,540 |
| 13,570 |
| ||||
Capitalized interest |
| 5,579 |
| 3,851 |
| 22,479 |
| 4,024 |
| ||||
Preferred stock dividends |
| 5,282 |
| 5,282 |
| 15,848 |
| 15,848 |
| ||||
Fixed charges |
| $ | 99,342 |
| $ | 118,178 |
| $ | 319,087 |
| $ | 289,807 |
|
|
|
|
|
|
|
|
|
|
| ||||
Adjusted fixed charge coverage |
| 2.8 x |
| 1.9 x |
| 2.3 x |
| 2.2 x |
|
| |
48 |
Supplemental Financial Measures Disclosures
EBITDA and Adjusted EBITDA. The real estate industry uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, as a measure of both operating performance and liquidity. Adjusted EBITDA is calculated as EBITDA excluding minority interests’ share in earnings, impairments and gains or losses from real estate dispositions. The Company uses EBITDA and Adjusted EBITDA to measure both its operating performance and liquidity. The Company considers Adjusted EBITDA to provide investors relevant and useful information because it permits investors to view income from its operations on an unleveraged basis before the effects of taxes, non-cash depreciation and amortization, impairments and gains or losses from real estate dispositions. By excluding interest expense, Adjusted EBITDA allows investors to measure the Company’s operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries. The Company considers Adjusted EBITDA to be a useful supplemental measure for reviewing its comparative performance with other companies because, by excluding non-cash depreciation expense, Adjusted EBITDA can help the investing public compare the performance of a real estate company to that of companies in other industries. As a liquidity measure, the Company believes that EBITDA and Adjusted EBITDA help investors analyze the Company’s ability to meet its interest payments on outstanding debt and to make preferred dividend payments. The Company’s various debt agreements contain covenants that require the Company to maintain ratios similar to Adjusted Fixed Charge Coverage and credit rating agencies utilize similar ratios in evaluating and determining the credit rating on certain debt instruments of the Company. The Company believes investors should consider EBITDA and Adjusted EBITDA, in conjunction with net income (the primary measure of the Company’s performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of the Company’s operating results and liquidity, and to make more meaningful comparisons of its performance between periods and as against other companies. By excluding interest, taxes, depreciation and amortization, impairments and gains or losses from real estate dispositions when assessing the Company’s financial performance, an investor is assessing the earnings generated by the Company’s operations, but not taking into account the eliminated expenses or gains or losses from real estate dispositions incurred in connection with such operations. As a result, EBITDA and Adjusted EBITDA have limitations as analytical tools and should be used in conjunction with the Company’s required GAAP presentations. EBITDA and Adjusted EBITDA do not reflect the Company’s historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. Also, EBITDA and Adjusted EBITDA do not reflect the cash required to make interest and principal payments on the Company’s outstanding debt. While Adjusted EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, the Company’s computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.
The following table reconciles Adjusted EBITDA from net cash provided by operating activities:
In thousands
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net cash provided by operating activities |
| $ | 182,689 |
| $ | 93,226 |
| $ | 455,383 |
| $ | 309,821 |
|
Changes in: |
|
|
|
|
|
|
|
|
| ||||
Accounts receivable |
| (1,909 | ) | (1,286 | ) | (14,881 | ) | 2,626 |
| ||||
Other assets |
| 12,059 |
| 15,053 |
| 6,660 |
| 18,384 |
| ||||
Accounts payable and accrued liabilities |
| (16,823 | ) | 3,592 |
| (10,776 | ) | 3,128 |
| ||||
Marketable securities losses (gains), net |
| 36 |
| — |
| (2,746 | ) | 4,874 |
| ||||
Derivative losses, net |
| 557 |
| — |
| (1,803 | ) | — |
| ||||
Impairments |
| (3,710 | ) | — |
| (13,425 | ) | — |
| ||||
Gains on sales of real estate and real estate interest |
| 27,416 |
| 286,153 |
| 227,810 |
| 402,410 |
| ||||
Minority interests’ share in earnings |
| (5,803 | ) | (6,018 | ) | (17,055 | ) | (17,992 | ) | ||||
Distributions of earnings from unconsolidated joint ventures |
| (1,663 | ) | (1,081 | ) | (3,736 | ) | (3,148 | ) | ||||
Equity income from unconsolidated joint ventures |
| 1,227 |
| 1,242 |
| 3,736 |
| 3,758 |
| ||||
Deferred rental revenue |
| (2,948 | ) | (5,266 | ) | (16,227 | ) | (8,937 | ) | ||||
Interest accretion |
| 7,108 |
| 2,265 |
| 20,134 |
| 6,428 |
| ||||
Straight-line rents |
| 9,112 |
| 19,088 |
| 28,645 |
| 39,467 |
| ||||
Recovery of loan losses |
| — |
| 176 |
| — |
| 386 |
| ||||
Amortization of debt issuance costs |
| (3,064 | ) | (9,631 | ) | (9,226 | ) | (15,274 | ) | ||||
Stock-based compensation |
| (3,152 | ) | (2,674 | ) | (10,637 | ) | (8,516 | ) | ||||
Amortization of below market lease intangibles, net |
| 1,991 |
| 1,613 |
| 6,020 |
| 3,185 |
| ||||
Depreciation and amortization of real estate, in-place lease and other intangibles: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| (77,659 | ) | (70,418 | ) | (233,920 | ) | (184,132 | ) | ||||
Discontinued operations |
| (47 | ) | (3,886 | ) | (5,832 | ) | (17,748 | ) | ||||
Net income |
| 125,417 |
| 322,148 |
| 408,124 |
| 538,720 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 83,249 |
| 103,707 |
| 265,054 |
| 254,434 |
| ||||
Discontinued operations |
| 15 |
| 202 |
| 166 |
| 1,931 |
| ||||
Income taxes: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 866 |
| (318 | ) | 4,385 |
| (860 | ) | ||||
Discontinued operations |
| 2 |
| 369 |
| 92 |
| 1,891 |
| ||||
Depreciation and amortization of real estate, in-place lease and other intangibles: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 77,659 |
| 70,418 |
| 233,920 |
| 184,132 |
| ||||
Discontinued operations |
| 47 |
| 3,886 |
| 5,832 |
| 17,748 |
| ||||
Equity income from unconsolidated joint ventures |
| (1,227 | ) | (1,242 | ) | (3,736 | ) | (3,758 | ) | ||||
HCP’s share of EBITDA from Investment Management Business |
| 10,760 |
| 10,246 |
| 32,430 |
| 26,882 |
| ||||
Other joint venture adjustments |
| 655 |
| 608 |
| 1,880 |
| 1,609 |
| ||||
EBITDA |
| 297,443 |
| 510,024 |
| 948,147 |
| 1,022,729 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Minority interests’ share in earnings |
| 5,803 |
| 6,018 |
| 17,055 |
| 17,992 |
| ||||
Gains on sales of real estate and real estate interest |
| (27,416 | ) | (286,153 | ) | (227,810 | ) | (402,410 | ) | ||||
Adjusted EBITDA |
| $ | 275,830 |
| $ | 229,889 |
| $ | 737,392 |
| $ | 638,311 |
|
| |
49 |
Supplemental Financial Measures Disclosures
Financial Leverage. Total Debt divided by Total Gross Assets. The Company believes that its Financial Leverage is a meaningful supplemental measure of its financial position, which enables both management and investors to analyze its leverage and to compare its leverage to that of other companies. The Company believes that the ratio of consolidated debt to consolidated gross assets is the most directly comparable GAAP measure to Financial Leverage. The Company’s computation of its Financial Leverage may not be identical to the computations of financial leverage reported by other companies. The Company’s share of total debt is not intended to reflect its actual liability or ability to access assets should there be a default under any or all of such loans or a liquidation of the joint ventures.
Fixed Charges. Total interest expense plus capitalized interest plus preferred stock dividends. The Company uses Fixed Charges to measure its interest payments on outstanding debt and dividends to its preferred stockholders for purposes of presenting Fixed Charge Coverage and Adjusted Fixed Charge Coverage. However, the usefulness of Fixed Charges is limited as, among other things, it does not include all contractual obligations. The Company’s computation of Fixed Charges should not be considered an alternative to fixed charges as defined by Item 503(d) of Regulation S-K and may not be comparable to fixed charges reported by other companies.
Funds From Operations (“FFO”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that Funds From Operations, or FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO applicable to common shares, Diluted FFO applicable to common shares, and Basic and Diluted FFO per common share are important non-GAAP supplemental measures of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments to derive the Company’s pro rata share of FFO from consolidated and unconsolidated joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. The Company believes that the use of FFO, combined with the required GAAP presentations, improves the understanding of operating results of real estate investment trusts among investors and makes comparisons of operating results among such companies more meaningful. The Company considers FFO to be a useful measure for reviewing comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, FFO can help investors compare the operating performance of a real estate investment trust between periods or as compared to other companies. While FFO is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO also does not consider the costs associated with capital expenditures related to the Company’s real estate assets nor is FFO necessarily indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO may not be comparable to FFO reported by other real estate investment trusts that
do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently from the Company. For a reconciliation of FFO to net income, please refer to the slide in this supplemental information package captioned “Consolidated Funds From Operations.”
FFO Payout Ratio per Common Share. Dividends declared per common share divided by Diluted FFO per common share for a given period. The Company believes the FFO Payout Ratio per Common Share provides investors relevant and useful information because it measures the portion of FFO being declared as dividends to common stockholders. FFO Payout Ratio per Common Share is subject to the same limitations noted in the definition of FFO above.
Net Operating Income from Continuing Operations (“NOI”). A non-GAAP supplemental financial measure used to evaluate the operating performance of real estate properties and SPP. The Company defines NOI as rental revenues, including tenant reimbursements and income from direct financing leases, less property level operating expenses. NOI excludes gain on sale of real estate interest, depreciation and amortization, general and administrative expenses, impairments, interest expense and discontinued operations. The Company believes NOI provides investors relevant and useful information because it measures the operating performance of the Company’s real estate at the property level on an unleveraged basis. NOI, as adjusted, is calculated as NOI eliminating the effects of straight-line rents, amortization of above and below market lease intangibles, and lease termination fees. NOI, as adjusted, is sometimes referred as “adjusted NOI” or “cash basis NOI.” The Company uses NOI and NOI, as adjusted, to make decisions about resource allocations, to assess and compare property level performance, and evaluate SPP. The Company believes that net income is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net income as defined by GAAP since it does not reflect the aforementioned excluded items. Further, NOI may not be comparable to that of other real estate investment trusts, as they may use different methodologies for calculating NOI.
The following table reconciles NOI from net income:
In thousands |
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
Net income |
| $ | 125,417 |
| $ | 322,148 |
| $ | 408,124 |
| $ | 538,720 |
|
Investment management fee income |
| (1,523 | ) | (1,602 | ) | (4,448 | ) | (12,062 | ) | ||||
Depreciation and amortization |
| 77,659 |
| 70,418 |
| 233,920 |
| 184,132 |
| ||||
General and administrative |
| 17,541 |
| 16,499 |
| 56,913 |
| 53,894 |
| ||||
Impairments |
| 3,710 |
| — |
| 13,425 |
| — |
| ||||
Gain on sale of real estate interest |
| — |
| — |
| — |
| (10,141 | ) | ||||
Interest and other income, net |
| (62,312 | ) | (21,538 | ) | (128,378 | ) | (54,724 | ) | ||||
Interest expense |
| 83,249 |
| 103,707 |
| 265,054 |
| 254,434 |
| ||||
Income taxes |
| 866 |
| (318 | ) | 4,385 |
| (860 | ) | ||||
Equity income from unconsolidated joint ventures |
| (1,227 | ) | (1,242 | ) | (3,736 | ) | (3,758 | ) | ||||
Minority interests’ share in earnings |
| 5,803 |
| 6,018 |
| 17,055 |
| 17,992 |
| ||||
Total discontinued operations, net of taxes |
| (30,614 | ) | (302,027 | ) | (245,835 | ) | (449,107 | ) | ||||
Net operating income (“NOI”) |
| $ | 218,569 |
| $ | 192,063 |
| $ | 616,479 |
| $ | 518,520 |
|
| |
50 |
Supplemental Financial Measures Disclosures
The information in this supplemental information package should be read in conjunction with the Company’s Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the SEC. The Reporting Definitions and Supplemental Financial Measures Disclosures are an integral part of the information presented herein.
On the Company’s internet website, www.hcpi.com, you can access, free of charge, its Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained on its website is not incorporated by reference into, and should not be considered a part of, this supplemental information package. In addition, the SEC maintains an internet website that contains reports, proxy and information statements, and other information regarding issuers, including HCP, that file electronically with the SEC at www.sec.gov.
For more information, contact Mark A. Wallace, Executive Vice President, Chief Financial Officer and Treasurer at (562) 733-5100.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this supplemental information which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include among other things the Company’s estimate of (i) yields, (ii) completion dates, stabilization dates, rentable square feet and total investment for development projects in progress, and (iii) rentable square feet for land held for future development. These statements are made as of the date hereof and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company’s control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include but are not limited to: the Company’s ability to access external sources of capital when desired and on reasonable terms; the Company’s ability to manage its indebtedness levels; the Company’s ability to maintain its credit ratings; the Company’s ability to achieve its expected benefits from acquisitions, including integrating and preserving the goodwill of those companies; competition for lessees and mortgagors (including new leases and mortgages and the renewal or rollover of existing leases); continuing reimbursement uncertainty in the skilled nursing segment; competition in the senior housing segment specifically and in the healthcare industry in general; the Company’s ability to acquire, sell or lease facilities and the timing of acquisitions, sales and leasings; the Company’s ability to realize the benefits of its mezzanine investments; changes in the financial condition of the Company’s lessees and obligors; changes in healthcare laws and regulations and other changes in the healthcare industry which affect the operations of the Company’s lessees or obligors; changes in the Company’s management; litigation claims and developments; costs of compliance with building regulations; changes in tax laws and regulations; changes in rules governing financial reporting, including new accounting pronouncements; changes in economic conditions, including changes in interest rates and the availability and cost of capital, which affect opportunities for profitable investments; and other risks described from time to time in the Company’s Securities and Exchange Commission filings. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.
| |
51 |