Exhibit 99.2
Supplemental Information
December 31, 2009
(Unaudited)
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San Francisco, CA | San Diego, CA |
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Irvine, CA | Richmond, VA |
Table of Contents
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Portfolio summary | 25 |
Reporting Definitions and Reconciliations of Non-GAAP Measures | 26-30 |
“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: national and local economic conditions, including the possibility of a prolonged recession; continued volatility in the capital markets, including changes in interest rates and the availability and cost of capital, which changes and volatility affect opportunities for profitable investment; 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; changes in the terms of the Company’s indebtedness; the Company’s ability to maintain its credit ratings; the potential impact of existing and future litigation matters, including the possibility of larger than expected litigation costs and related developments; the Company’s ability to sell its investments when desired and on profitable terms; competition for lessees and mortgagors (including new leases and mortgages and the renewal or rollover of existing leases); the Company’s ability to reposition its properties on the same or better terms if existing leases are not renewed or the Company exercises its right to replace an existing operator or tenant upon default; continuing reimbursement uncertainty in the skilled nursing segment; competition in the senior housing segment specifically and in the healthcare industry in general; the ability of the Company’s operators and tenants to maintain or increase occupancy levels at, and rental income from, the senior housing segment; the Company’s ability to realize the benefits of its mezzanine and other loan investments; the ability of the Company’s lessees and mortgagors to maintain the financial strength and liquidity necessary to satisfy their respective obligations to the Company and other third parties; the bankruptcy, insolvency or financial deterioration of the Company’s operators, lessees, borrowers or other obligors; changes in healthcare laws and regulations, including the impact of future or pending healthcare reform, and other changes in the healthcare industry which affect the operations of the Company’s lessees or obligors; the Company’s ability to recruit and retain key management personnel; costs of compliance with regulations and environmental laws affecting the Company’s properties; changes in tax laws and regulations; the Company’s ability and willingness to maintain its qualification as a REIT; changes in rules governing financial reporting, including new accounting pronouncements; 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.
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Board of Directors | ||
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Robert R. Fanning, Jr. |
| Harold M. Messmer, Jr. |
Managing Director (Retired), |
| Chairman and Chief Executive Officer |
The Huron Consulting Group |
| Robert Half International, Inc. |
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James F. Flaherty III |
| Peter L. Rhein |
Chairman and Chief Executive Officer |
| Partner, Sarlot & Rhein |
HCP, Inc. |
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Christine N. Garvey |
| Kenneth B. Roath |
Former Global Head of Corporate |
| Chairman Emeritus, HCP, Inc. |
Real Estate Services, Deutsche Bank AG |
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David B. Henry |
| Richard M. Rosenberg |
Vice Chairman, President and Chief |
| Chairman and Chief Executive Officer |
Executive Officer, Kimco Realty Corporation |
| (Retired), BankAmerica Corporation |
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Lauralee E. Martin |
| Joseph P. Sullivan |
Chief Operating and Financial Officer |
| Chairman of the Board of Advisors |
Jones Lang LaSalle Incorporated |
| RAND Health |
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Michael D. McKee |
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Chief Executive Officer and Vice Chairman |
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(Retired), The Irvine Company |
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Senior Management | ||
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James F. Flaherty III |
| Thomas D. Kirby |
Chairman and |
| Executive Vice President |
Chief Executive Officer |
| Acquisitions and Valuations |
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Paul F. Gallagher |
| Thomas M. Klaritch |
Executive Vice President and |
| Executive Vice President |
Chief Investment Officer |
| Medical Office Properties |
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Edward J. Henning |
| Timothy M. Schoen |
Executive Vice President, |
| Executive Vice President |
General Counsel, Chief Administrative |
| Life Science and Investment Management |
Officer and Corporate Secretary |
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Thomas M. Herzog |
| Susan M. Tate |
Executive Vice President and |
| Executive Vice President |
Chief Financial Officer |
| Asset Management and Senior Housing |
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Other Information | ||
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Corporate Headquarters |
| San Francisco Office |
3760 Kilroy Airport Way, Suite 300 |
| 400 Oyster Point Boulevard, Suite 409 |
Long Beach, CA 90806-2473 |
| South San Francisco, CA 94080 |
(562) 733-5100 |
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Nashville Office |
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3000 Meridian Boulevard, Suite 200 |
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Franklin, TN 37067 |
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The information in this supplemental information package should be read in conjunction with the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the Securities and Exchange Commission (“SEC”). The Reporting Definitions and Reconciliations of Non-GAAP Measures 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, 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 Thomas M. Herzog, Executive Vice President and Chief Financial Officer at (562) 733-5309.
(1) As of February 12, 2010.
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Dollars in thousands, except per share data |
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| Three Months Ended December 31, |
| Year Ended December 31, |
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| 2009 |
| 2008 |
| 2009 |
| 2008 |
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Revenues | $ | 296,424 |
| $ | 294,946 |
| $ | 1,157,030 |
| $ | 1,153,188 |
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NOI |
| 212,804 |
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| 211,685 |
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| 841,674 |
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| 823,275 |
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Adjusted EBITDA |
| 247,674 |
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| 232,475 |
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| 949,820 |
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| 983,291 |
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Net income applicable to common shares |
| 26,397 |
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| 34,650 |
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| 109,069 |
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| 425,368 |
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FFO applicable to common shares |
| 106,040 |
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| 121,029 |
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| 412,464 |
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| 535,789 |
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Diluted EPS | $ | 0.09 |
| $ | 0.14 |
| $ | 0.40 |
| $ | 1.79 |
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Diluted FFO per common share | $ | 0.36 |
| $ | 0.48 |
| $ | 1.50 |
| $ | 2.24 |
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Diluted FFO per common share, before giving effect to impairments, litigation provision and merger-related charges | $ | 0.55 |
| $ | 0.54 |
| $ | 2.14 |
| $ | 2.37 |
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FFO payout ratio, before giving effect to impairments, litigation provision and merger-related charges |
| 84% |
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| 84% |
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| 86% |
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| 77% |
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Financial Leverage |
| 43% |
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| 48% |
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Adjusted fixed charge coverage |
| 2.7x |
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| 2.3x |
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| 2.6x |
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| 2.3x |
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| December 31, |
| December 31, |
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| 2009 |
| 2008 |
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Operating properties: |
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Senior housing |
| 256 |
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| 260 |
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Life science |
| 98 |
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| 104 |
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Medical office |
| 251 |
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| 251 |
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Hospital |
| 22 |
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| 23 |
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Skilled nursing |
| 48 |
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| 48 |
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Total |
| 675 |
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| 686 |
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Portfolio Income from Assets Under Management(1) |
| Assets Under Management: $13.8 billion(2) |
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(1) | Represents the NOI from real estate owned by HCP, the interest income from debt investments and HCP’s pro rata share of the NOI from real estate owned by the Company’s Investment Management Platform, excluding assets under development and land held for future development, for the year ended December 31, 2009. |
(2) | Represents the historical cost of real estate owned by HCP, the carrying amount of debt investments and 100% of the cost of real estate owned by the Company’s Investment Management Platform, excluding assets under development and land held for future development, at December 31, 2009. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
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Dollars in thousands, except per share data |
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| Three Months Ended |
| Year Ended |
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| December 31, |
| December 31, |
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| 2009 |
| 2008(1) |
| 2009 |
| 2008(1) |
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Net income applicable to common shares |
| $ | 26,397 |
| $ | 34,650 |
| $ | 109,069 |
| $ | 425,368 |
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Depreciation and amortization of real estate, in-place lease and other intangibles: |
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Continuing operations |
| 77,472 |
| 81,037 |
| 319,583 |
| 313,404 |
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Discontinued operations |
| 69 |
| 447 |
| 542 |
| 7,832 |
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Gain on sales of real estate |
| (2,964 | ) | (794 | ) | (37,321 | ) | (229,189 | ) | ||||
Equity (income) loss from unconsolidated joint ventures |
| (1,518 | ) | 410 |
| (3,511 | ) | (3,326 | ) | ||||
FFO from unconsolidated joint ventures |
| 7,019 |
| 5,909 |
| 26,023 |
| 24,125 |
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Noncontrolling interests’ and participating securities’ share in earnings |
| 3,805 |
| 5,287 |
| 15,952 |
| 24,485 |
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Noncontrolling interests’ and participating securities’ share in FFO |
| (4,240 | ) | (5,917 | ) | (17,873 | ) | (26,910 | ) | ||||
FFO applicable to common shares |
| $ | 106,040 |
| $ | 121,029 |
| $ | 412,464 |
| $ | 535,789 |
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Distributions on convertible units |
| $ | — |
| $ | 1,819 |
| $ | — |
| $ | 12,974 |
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Diluted FFO applicable to common shares |
| $ | 106,040 |
| $ | 122,848 |
| $ | 412,464 |
| $ | 548,763 |
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Basic FFO per common share |
| $ | 0.36 |
| $ | 0.48 |
| $ | 1.50 |
| $ | 2.26 |
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Diluted FFO per common share |
| $ | 0.36 |
| $ | 0.48 |
| $ | 1.50 |
| $ | 2.24 |
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Weighted average shares used to calculate diluted FFO per share |
| 293,763 |
| 256,616 |
| 274,631 |
| 244,650 |
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Dividends declared per common share |
| $ | 0.460 |
| $ | 0.455 |
| $ | 1.84 |
| $ | 1.82 |
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Impact of impairments, litigation provision and merger-related charges |
| $ | 54,485 |
| $ | 15,150 |
| $ | 177,487 |
| $ | 31,748 |
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Per common share impact of impairments, litigation provision and merger-related charges on diluted FFO |
| $ | 0.19 |
| $ | 0.06 |
| $ | 0.64 |
| $ | 0.13 |
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Diluted FFO per common share, before giving effect to impairments, litigation provision and merger-related charges |
| $ | 0.55 |
| $ | 0.54 |
| $ | 2.14 |
| $ | 2.37 |
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FFO payout ratio, before giving effect to impairments, litigation provision and merger-related charges |
| 83.6% |
| 84.3% |
| 86.0% |
| 76.8% |
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Consolidated selected supplemental cash flow information: |
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Impairments(2) |
| $ | 54,485 |
| $ | 14,426 |
| $ | 75,514 |
| $ | 27,851 |
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Litigation provision |
| — |
| — |
| 101,973 |
| — |
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Amortization of above and below market lease intangibles, net(3) |
| (2,123 | ) | (2,420 | ) | (14,780 | ) | (8,440 | ) | ||||
Stock-based compensation |
| 3,320 |
| 3,128 |
| 14,388 |
| 13,765 |
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Amortization of debt premiums, discounts and issuance costs, net |
| 2,141 |
| 2,460 |
| 8,328 |
| 9,869 |
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Straight-line rents |
| (7,937 | ) | (10,818 | ) | (46,688 | ) | (39,463 | ) | ||||
Interest accretion – DFLs |
| (2,074 | ) | (2,204 | ) | (8,057 | ) | (8,554 | ) | ||||
Increase in deferred revenues – tenant improvement related |
| 3,137 |
| 1,646 |
| 13,315 |
| 14,240 |
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Decrease in deferred revenues – additional rents (SAB 104) |
| (840 | ) | (3,942 | ) | (511 | ) | (309 | ) | ||||
Lease commissions and tenant and capital improvements |
| (13,381 | ) | (15,257 | ) | (40,702 | ) | (59,991 | ) | ||||
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HCP’s share of selected supplemental cash flow information from unconsolidated joint ventures(4): |
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Amortization of above and below market lease intangibles, net |
| $ | 30 |
| $ | 1,407 |
| $ | 1,424 |
| $ | 2,206 |
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Amortization of debt premiums, discounts and issuance costs, net |
| 105 |
| 106 |
| 405 |
| 451 |
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Straight-line rents |
| (2,159 | ) | (1,282 | ) | (5,553 | ) | (4,949 | ) | ||||
Lease commissions and tenant and capital improvements |
| (830 | ) | (1,492 | ) | (2,474 | ) | (2,795 | ) |
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(1) | Presentation and certain computational changes have been made for the adoption of Accounting Standard Codification 260-10, Earnings Per Share - Overall (formerly FSP-EITF 03-6-1, Determining Whether Instruments Granted in Share Based Payment Transactions are Participating Securities), to compute earnings per share and funds from operations per share under the two-class method. |
(2) | In the three months and year ended December 31, 2008, included in other income, net, are impairments of $0.4 million related to two of the Company’s investments in unconsolidated joint ventures. |
(3) | Year ended December 31, 2009 amortization of $14.8 million includes the net effect of the following: (i) income of $16.4 million related to net below market lease intangibles; (ii) operating expense of $0.4 million related to net below market ground lease intangibles; and (iii) a charge to revenues of $1.2 million related to lease incentives. |
(4) | Includes Investment Management Platform and three other unconsolidated joint ventures. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
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Dollars and shares in thousands, except price data | |||||||||
Total Debt | |||||||||
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| December 31, |
| December 31, 2008 | |||
Bank line of credit |
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| $ | — |
| $ | 150,000 | |
Term loan |
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| 200,000 |
| 200,000 | |||
Bridge loan |
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| — |
| 320,000 | |||
Senior unsecured notes |
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| 3,521,325 |
| 3,523,513 | |||
Mortgage and other secured debt |
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| 1,834,935 |
| 1,641,734 | |||
Other debt |
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| 99,883 |
| 102,209 | |||
Consolidated debt |
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| 5,656,143 |
| 5,937,456 | |||
HCP’s share of unconsolidated debt(1) |
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| 341,389 |
| 346,470 | |||
Total debt |
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| $ | 5,997,532 |
| $ | 6,283,926 | |
Total Market Capitalization | ||||||||
| December 31, 2009 | |||||||
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| Shares/Units |
| Price |
| Value | ||
Common stock |
| 293,548 |
| $ | 30.54 |
| $ | 8,964,956 |
Convertible partnership units |
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2 for 1(2) |
| 1,617 |
| 61.08 |
| 98,766 | ||
1 for 1(3) |
| 2,650 |
| 30.54 |
| 80,931 | ||
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| 4,267 |
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| 179,697 | ||
Preferred stock: |
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7.25% Series E (Callable at par after September 15, 2008) |
| 4,000 |
| 23.08 |
| 92,320 | ||
7.10% Series F (Callable at par after December 3, 2008) |
| 7,820 |
| 22.88 |
| 178,922 | ||
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| 11,820 |
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| 271,242 | ||
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Consolidated market equity |
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| $ | 9,415,895 | |
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Consolidated debt |
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| 5,656,143 | ||
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Consolidated market capitalization |
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| $ | 15,072,038 | |
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HCP’s share of unconsolidated debt(1) |
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| 341,389 | ||
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Total market capitalization |
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| $ | 15,413,427 | |
Common Stock and Equivalents | |||||||||
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| Weighted Average Shares | ||||||
| Shares |
| Three Months Ended |
| Year Ended | ||||
| Outstanding |
| December 31, 2009 |
| December 31, 2009 | ||||
| December 31, 2009 |
| Diluted EPS |
| Diluted FFO |
| Diluted EPS |
| Diluted FFO |
Common Stock | 293,548 |
| 292,748 |
| 292,748 |
| 274,216 |
| 274,216 |
Dilutive securities: |
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Restricted stock and units | 988 |
| 256 |
| 256 |
| 136 |
| 136 |
Options | 279 |
| 759 |
| 759 |
| 279 |
| 279 |
Convertible partnership units | 5,884 |
| — |
| — |
| — |
| — |
Total common and equivalents | 300,699 |
| 293,763 |
| 293,763 |
| 274,631 |
| 274,631 |
Other Information | ||||
Trading Symbol |
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| Senior Unsecured Debt Ratings | |
HCP | Common Stock |
| Moody’s | Baa3 (stable outlook) |
HCP_pe | Series E Preferred Stock |
| Standard & Poor’s | BBB (stable outlook) |
HCP_pf | Series F Preferred Stock |
| Fitch | BBB (positive outlook) |
Stock Exchange Listing |
NYSE |
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(1) | Reflects the Company’s pro rata share of amounts from the Investment Management Platform. Excludes unconsolidated joint ventures outside of the Investment Management Platform. |
(2) | 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. |
(3) | 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. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
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Dollars in thousands
Debt Maturities and Scheduled Principal Repayments (Amortization)
December 31, 2009
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| Bank Line |
| Term Loan |
| Senior |
| Rates(1) |
| Mortgage and |
|
|
| Consolidated |
| HCP’s Share of |
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
|
|
|
|
|
|
| Rates(1) |
|
|
| Rates(1) |
| Total Debt |
| ||||||||||||||
2010 |
| $ | — |
| $ | — |
| $ | 206,421 |
| 5.17 | % | $ | 102,958 |
| 7.53 | % | $ | 309,379 |
| $ | 5,546 |
| — | % | $ | 314,925 |
|
2011 |
| — |
| 200,000 |
| 292,265 |
| 6.13 |
| 146,987 |
| 4.89 |
| 639,252 |
| 6,224 |
| — |
| 645,476 |
| |||||||
2012 |
| — |
| — |
| 250,000 |
| 6.67 |
| 63,776 |
| 5.43 |
| 313,776 |
| 13,560 |
| 4.85 |
| 327,336 |
| |||||||
2013 |
| — |
| — |
| 550,000 |
| 5.83 |
| 675,104 |
| 2.97 |
| 1,225,104 |
| 44,508 |
| 5.75 |
| 1,269,612 |
| |||||||
2014 |
| — |
| — |
| 87,000 |
| 4.87 |
| 177,435 |
| 5.86 |
| 264,435 |
| 4,364 |
| — |
| 268,799 |
| |||||||
2015 |
| — |
| — |
| 400,000 |
| 6.64 |
| 355,369 |
| 5.99 |
| 755,369 |
| 15,070 |
| 5.39 |
| 770,439 |
| |||||||
2016 |
| — |
| — |
| 400,000 |
| 6.43 |
| 250,142 |
| 6.17 |
| 650,142 |
| 50,975 |
| 5.84 |
| 701,117 |
| |||||||
2017 |
| — |
| — |
| 750,000 |
| 6.05 |
| 3,203 |
| — |
| 753,203 |
| 201,648 |
| 5.67 |
| 954,851 |
| |||||||
2018 |
| — |
| — |
| 600,000 |
| 6.85 |
| 3,389 |
| — |
| 603,389 |
| — |
| — |
| 603,389 |
| |||||||
2019 |
| — |
| — |
| — |
| — |
| 3,063 |
| 5.20 |
| 3,063 |
| — |
| — |
| 3,063 |
| |||||||
Thereafter |
| — |
| — |
| — |
| — |
| 50,514 |
| 5.72 |
| 50,514 |
| — |
| — |
| 50,514 |
| |||||||
Subtotal |
| — |
| 200,000 |
| 3,535,686 |
|
|
| 1,831,940 |
|
|
| 5,567,626 |
| 341,895 |
|
|
| 5,909,521 |
| |||||||
Other debt(4) |
| — |
| — |
| — |
|
|
| — |
|
|
| 99,883 |
| — |
|
|
| 99,883 |
| |||||||
(Discounts) and premiums, net |
| — |
| — |
| (14,361 | ) |
|
| 2,995 |
|
|
| (11,366 | ) | (506 | ) |
|
| (11,872 | ) | |||||||
Total debt |
| $ | — |
| $ | 200,000 |
| $ | 3,521,325 |
|
|
| $ | 1,834,935 |
|
|
| $ | 5,656,143 |
| $ | 341,389 |
|
|
| $ | 5,997,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Weighted average interest rate |
| N/A |
| 2.70% |
| 6.12% |
|
|
| 5.08% |
|
|
| 5.65% |
| 5.70% |
|
|
| 5.66% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Weighted average maturity in years |
| 1.61 |
| 1.61 |
| 5.30 |
|
|
| 4.39 |
|
|
| 4.86 |
| 6.87 |
|
|
| 4.98 |
|
Ratios |
| Covenants | |||||||||||
|
| December 31, |
| The following is a summary of the financial covenants under the revolving line of credit facility and term loan at | |||||||||
|
| 2009 |
|
| 2008 |
| December 31, 2009. |
|
|
| |||
Consolidated Debt/Consolidated Gross Assets |
| 42.8 | % |
| 47.1 | % |
| Financial Covenants(6) |
| Line of Credit and Term Loan |
| ||
Financial Leverage (Total Debt/Total Gross Assets) |
| 43.4 | % |
| 47.6 | % |
|
| Requirement |
| Actual Compliance |
| |
|
|
|
|
|
|
|
| Leverage Ratio |
| No greater than 60% |
| 45% |
|
Consolidated Secured Debt/Consolidated Gross Assets |
| 13.9 | % |
| 13.0 | % |
| Secured Debt Ratio |
| No greater than 30% |
| 17% |
|
Total Secured Debt/Total Gross Assets |
| 15.8 | % |
| 15.1 | % |
| Unsecured Leverage Ratio |
| No greater than 65% |
| 43% |
|
|
|
|
|
|
|
|
| Fixed Charge Coverage Ratio (12 months) |
| No less than 1.75x |
| 2.4x |
|
Fixed and variable rate ratios(5): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate Total Debt |
| 83.8 | % |
| 85.8 | % |
|
|
|
|
|
|
|
Variable rate Total Debt |
| 16.2 | % |
| 14.2 | % |
|
|
|
|
|
|
|
|
| 100.0 | % |
| 100.0 | % |
|
|
|
|
|
|
|
|
|
(1) | Senior unsecured notes and mortgage and other secured debt weighted-average effective rates relate to maturing amounts. |
(2) | Mortgage debt attributable to non-controlling interests at December 31, 2009 was $16 million. |
(3) | Includes pro-rata share of other debt that represents the Company’s Investment Management Platform. At December 31, 2009, 100% of the Company’s Investment Management Platform’s mortgage debt accrues interest at fixed rates. |
(4) | $99.9 million of other debt that represents non-interest bearing Life Care Bonds and occupancy fee deposits at three of the Company’s senior housing facilities have no scheduled maturities. |
(5) | $250 million of fixed-rate senior unsecured notes are presented as variable-rate debt as the interest payments under such debt has been swapped (pay float and receive fixed) and $60 million of variable-rate mortgages are presented as fixed-rate debt as the interest payments under such debt has been swapped (pay fixed and receive float). |
(6) | The revolving line of credit facility and term loan have very similar terms, including financial covenants that are calculated based on the definitions contained within the agreements and may be different than similar terms in the Company’s Consolidated Financial Statements provided herein and as provided in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Compliance with certain of these financial covenants requires the inclusion of the Company’s consolidated amounts and its proportionate share of unconsolidated investees. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Dollars in thousands
Investments |
| ||||||
|
| December 31, 2009 |
| ||||
|
| Three Months |
| Year |
| ||
Description |
| Ended |
| Ended |
| ||
|
|
|
|
|
| ||
Acquisition of joint venture interests |
| $ | — |
| $ | 14,250 |
|
Purchase of participation in HCR ManorCare’s first mortgage debt |
|
| — |
|
| 590,536 |
|
Total fundings for development, tenant and capital improvements(1) |
|
| 33,133 |
|
| 119,221 |
|
|
|
|
|
|
|
|
|
Total investments |
| $ | 33,133 |
| $ | 724,007 |
|
Dispositions |
| |||||||||||
|
|
|
|
|
| Property |
|
|
| Sales Price, |
| |
Description |
| Capacity |
| Count |
| Segment |
| Net of Costs |
| |||
Location |
| Date |
|
|
|
|
|
|
|
|
| |
Three Months Ended December 31, 2009: |
|
|
|
|
|
|
|
|
| |||
Dunwoody, Georgia |
| Various |
| 127 units |
| 2 |
| Senior Housing |
| $ | 11,746 |
|
Fairfield, California |
| December 31, 2009 |
| 46 units |
| 1 |
| Senior Housing |
| 2,480 |
| |
Fourth quarter property dispositions |
|
|
|
| 3 |
|
|
| 14,226 |
| ||
Marketable securities sold |
| Various |
|
|
|
|
|
|
| 37,457 |
| |
Total |
|
|
|
|
|
|
|
|
| $ | 51,683 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year Ended December 31, 2009: |
|
|
|
|
|
|
|
|
| |||
Property dispositions |
| Various |
|
|
| 14 |
| Various |
| $ | 72,272 |
|
Marketable security sold |
| Various |
|
|
|
|
|
|
| 157,122 |
| |
Total |
|
|
|
|
|
|
|
|
| $ | 229,394 |
|
(1) | The quarter ended December 31, 2009, includes the following: (i) $16.0 million of development, (ii) $9.5 million of first generation tenant improvements, and (iii) $7.6 million of second generation tenant and capital improvements (excludes $5.8 million of lease commissions). The year ended December 31, 2009, includes the following: (i) $67.5 million of development, (ii) $25.2 million of first generation tenant improvements, and (iii) $26.5 million of second generation tenant and capital improvements (excludes $14.2 million of lease commissions). Investments for development include capitalized interest for the quarter and year ended December 31, 2009, of $6.9 million and $25.9 million, respectively. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of December 31, 2009, dollars and square feet in thousands
Development Projects in Process | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
| Estimated/ |
|
|
| Estimated |
|
|
|
| ||
|
|
|
|
|
| Actual |
| Rent |
| Rentable |
|
|
| Estimated | ||
|
|
|
|
|
| Completion |
| Commencement |
| Square |
| Investment |
| Total | ||
Name of Project |
| Location |
| Segment |
| Date |
| Date |
| Feet |
| to Date(1)(3) |
| Investment | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Oyster Point II (A) |
| So. San Francisco, CA |
| Life science |
| 4Q 2008 |
| 4Q 2008 |
| 122 |
| $ | 94,317 |
| $ | 96,183 |
Oyster Point II (B) |
| So. San Francisco, CA |
| Life science |
| 4Q 2008 |
| 1Q 2009 |
| 129 |
| 99,474 |
| 101,922 | ||
Oyster Point II (C) |
| So. San Francisco, CA |
| Life science |
| 4Q 2008 |
| N/A |
| 78 |
| 51,085 |
| 60,660 | ||
|
|
|
|
|
|
|
|
|
| 329 |
| 244,876 |
| 258,765 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Percentage pre-leased |
|
|
|
|
|
|
| 76% |
|
|
|
| ||
Redevelopment |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
500/600 Saginaw |
| Redwood City, CA |
| Life science |
| 1Q 2010 |
| N/A |
| 89 |
| 36,787 |
| 52,100 | ||
Modular Labs IV |
| So. San Francisco, CA |
| Life science |
| 4Q 2010 |
| N/A |
| 97 |
| 26,202 |
| 55,948 | ||
Westridge |
| San Diego, CA |
| Life science |
| 3Q 2011 |
| N/A |
| 53 |
| 10,199 |
| 22,999 | ||
Innovation Drive |
| San Diego, CA |
| MOB |
| 3Q 2010 |
| N/A |
| 84 |
| 21,552 |
| 34,272 | ||
Folsom |
| Sacramento, CA |
| MOB |
| 3Q 2010 |
| N/A |
| 92 |
| 25,386 |
| 31,605 | ||
Knoxville |
| Knoxville, TN |
| MOB |
| 4Q 2010 |
| N/A |
| 38 |
| 5,536 |
| 7,969 | ||
|
|
|
|
|
|
|
|
|
| 453 |
| 125,662 |
| 204,893 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Total |
|
|
|
|
|
|
| 782 |
| $ | 370,538 |
| $ | 463,658 |
Land Held for Future Development |
|
|
|
|
|
| Estimated |
| |
|
|
|
| Gross |
| Rentable |
| |
|
|
|
| Site |
| Square |
| |
Location |
| Segment |
| Acreage |
| Feet |
| |
So. San Francisco, CA |
| Life science |
| 30 |
| 866 |
| |
Carlsbad, CA |
| Life science |
| 41 |
| 697 |
| |
Poway, CA |
| Life science |
| 72 |
| 1,261 |
| |
Torrey Pines, CA |
| Life science |
| 6 |
| 93 |
| |
|
|
|
| 149 |
| 2,917 |
| |
|
|
|
|
|
|
|
| |
Investment-to-date(2)(3) |
|
|
|
|
| $ | 261,841 |
|
(1) | Includes $74 million in land, $73 million in buildings, $13 million in net intangible assets and $211 million in development costs and construction in progress. |
(2) | Includes $221 million in land and $41 million in development costs and construction in progress. |
(3) | Development costs and construction in progress of $273 million presented on the Company’s consolidated balance sheet at December 31, 2009, includes the following: (i) $211 million of costs for development projects in process; (ii) $41 million of costs for land held for future development; and (iii) $21 million for tenant and other facility related improvement projects. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of and for the year ended December 31, 2009, dollars and square feet in thousands, unless otherwise indicated
Portfolio Summary by Investment Product
Leased |
| Property |
|
|
|
|
| Average |
|
|
| Occupancy |
| EBITDAR |
| EBITDARM |
| ||||||||||
Properties |
| Count |
| Investment(1) |
| NOI |
| Age (Years) |
| Capacity |
| %(2) |
| Amount |
| CFC |
| Amount |
| CFC |
| ||||||
Senior housing |
| 231 |
| $ | 4,081,157 |
| $ | 338,373 |
| 13 |
| 25,335 | Units |
| 86.5 |
| $ | 348,224 |
| 1.13 x |
| $ | 421,024 |
| 1.36 x |
| |
Life science |
| 94 |
| 2,822,709 |
| 207,694 |
| 16 |
| 6,083 | Sq. Ft. |
| 89.8 |
| N/A |
| N/A |
| N/A |
| N/A |
| |||||
Medical office |
| 184 |
| 2,137,140 |
| 176,663 |
| 18 |
| 12,812 | Sq. Ft. |
| 90.9 |
| N/A |
| N/A |
| N/A |
| N/A |
| |||||
Hospital |
| 18 |
| 673,248 |
| 81,398 |
| 23 |
| 2,510 | Beds |
| 57.0 |
| 306,883 |
| 4.44 x |
| 340,872 |
| 4.93 x |
| |||||
Skilled nursing |
| 48 |
| 255,084 |
| 37,546 |
| 24 |
| 5,628 | Beds |
| 85.4 |
| 57,122 |
| 1.56 x |
| 77,111 |
| 2.11 x |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| 575 |
| $ | 9,969,338 |
| $ | 841,674 |
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Secured |
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA |
| EBITDAM |
| ||||||||||
Loans |
|
|
| Investment |
| Income |
|
|
|
|
|
|
| DSC |
| DSC |
| ||||||||||
Senior housing |
|
|
| $ | 7,013 |
| $ | 1,147 |
|
|
|
|
|
|
|
|
| 1.62 x |
|
|
| 1.95 x |
| ||||
Hospital |
|
|
| 35,308 |
| 3,001 |
|
|
|
|
|
|
|
|
| 4.02 x |
|
|
| 4.68 x |
| ||||||
Skilled nursing |
|
|
| 617,907 |
| 21,601 |
|
|
|
|
|
|
|
|
| 13.97 x |
|
|
| 17.16 x |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
| $ | 660,228 |
| $ | 25,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mezzanine |
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA |
| EBITDAM |
| ||||||||||
Loans |
|
|
| Investment |
| Income |
|
|
|
|
|
|
| DSC |
| DSC |
| ||||||||||
Hospital |
|
|
| $ | 251,122 |
| $ | 37,294 |
|
|
|
|
|
|
|
|
| 2.44 x |
|
|
| 2.64 x |
| ||||
Skilled nursing |
|
|
| 934,387 |
| 61,103 |
|
|
|
|
|
|
|
|
| 3.68 x |
|
|
| 4.52 x |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
| $ | 1,185,509 |
| $ | 98,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
|
|
| $ | 11,815,075 |
| $ | 965,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Portfolio NOI, Adjusted NOI and Interest Income
|
| Three Months Ended December 31, 2009 |
| ||||||||||||||||
|
| Rental |
|
|
|
|
|
|
| NOI and |
|
|
| ||||||
|
| Revenues |
| Operating |
|
|
| Interest |
| Interest |
| Adjusted |
| ||||||
Segment |
| & DFL Income |
| Expenses |
| NOI(3) |
| Income(4) |
| Income |
| NOI |
| ||||||
Senior housing |
| $ | 86,444 |
| $ | — |
| $ | 86,444 |
| $ | 266 |
| $ | 86,710 |
| $ | 77,687 |
|
Life science |
| 65,596 |
| 12,646 |
| 52,950 |
| — |
| 52,950 |
| 50,035 |
| ||||||
Medical office |
| 75,680 |
| 32,062 |
| 43,618 |
| — |
| 43,618 |
| 42,573 |
| ||||||
Hospital |
| 21,613 |
| 1,331 |
| 20,282 |
| 8,135 |
| 28,417 |
| 18,122 |
| ||||||
Skilled nursing |
| 9,558 |
| 48 |
| 9,510 |
| 27,953 |
| 37,463 |
| 9,167 |
| ||||||
|
| $ | 258,891 |
| $ | 46,087 |
| $ | 212,804 |
| $ | 36,354 |
| $ | 249,158 |
| $ | 197,584 |
|
|
| Year Ended December 31, 2009 |
| ||||||||||||||||
|
| Rental |
|
|
|
|
|
|
| NOI and |
|
|
| ||||||
|
| Revenues |
| Operating |
|
|
| Interest |
| Interest |
| Adjusted |
| ||||||
Segment |
| & DFL Income |
| Expenses |
| NOI(3) |
| Income(4) |
| Income |
| NOI |
| ||||||
Senior housing |
| $ | 342,311 |
| $ | 3,938 |
| $ | 338,373 |
| $ | 1,147 |
| $ | 339,520 |
| $ | 298,886 |
|
Life science |
| 254,979 |
| 47,285 |
| 207,694 |
| — |
| 207,694 |
| 190,982 |
| ||||||
Medical office |
| 307,264 |
| 130,601 |
| 176,663 |
| — |
| 176,663 |
| 170,363 |
| ||||||
Hospital |
| 85,271 |
| 3,873 |
| 81,398 |
| 40,295 |
| 121,693 |
| 70,902 |
| ||||||
Skilled nursing |
| 37,747 |
| 201 |
| 37,546 |
| 82,704 |
| 120,250 |
| 36,630 |
| ||||||
|
| $ | 1,027,572 |
| $ | 185,898 |
| $ | 841,674 |
| $ | 124,146 |
| $ | 965,820 |
| $ | 767,763 |
|
(1) | Represents (i) the carrying amount of real estate assets, including intangibles, after adding back accumulated depreciation and amortization and (ii) the carrying amount of DFLs and debt investments. |
(2) | For MOBs and life science facilities, occupancy percentages are presented as of the end of the period reported. For hospitals, skilled nursing facilities and senior housing facilities, occupancy represents the facilities’ average operating occupancy for the trailing twelve months and one quarter in arrears from the period reported. |
(3) | NOI attributable to non-controlling interests for the quarter and year ended December 31, 2009, was $1.3 million and $5.4 million, respectively. |
(4) | Includes loan accretion for the quarter and year ended December 31, 2009, of $13.3 million and $31.0 million, respectively. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of and for the year ended December 31, 2009, dollars in thousands
Geographic Diversification(1)
|
| Total |
| Senior |
| Life |
| Medical |
|
|
| Skilled |
|
|
| % of |
| ||||||
Investment by State |
| Properties |
| Housing |
| Science |
| Office |
| Hospital |
| Nursing |
| Total |
| Total |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
CA |
| 131 |
| $ | 575,218 |
| $ | 2,732,414 |
| $ | 218,977 |
| $ | 128,508 |
| $ | 14,347 |
| $ | 3,669,464 |
| 37 |
|
TX |
| 80 |
| 348,724 |
| — |
| 636,177 |
| 260,524 |
| 2,818 |
| 1,248,243 |
| 12 |
| ||||||
FL |
| 50 |
| 480,777 |
| — |
| 144,594 |
| 62,450 |
| — |
| 687,821 |
| 7 |
| ||||||
CO |
| 24 |
| 168,931 |
| — |
| 190,955 |
| 9,028 |
| 27,399 |
| 396,313 |
| 4 |
| ||||||
VA |
| 21 |
| 279,059 |
| — |
| 40,409 |
| — |
| 63,100 |
| 382,568 |
| 4 |
| ||||||
WA |
| 14 |
| 132,609 |
| — |
| 172,422 |
| — |
| — |
| 305,031 |
| 3 |
| ||||||
NJ |
| 13 |
| 285,638 |
| — |
| — |
| — |
| — |
| 285,638 |
| 3 |
| ||||||
UT |
| 33 |
| 27,800 |
| 90,295 |
| 131,936 |
| — |
| 4,935 |
| 254,966 |
| 2 |
| ||||||
MD |
| 12 |
| 189,392 |
| — |
| 29,230 |
| — |
| — |
| 218,622 |
| 2 |
| ||||||
IL |
| 12 |
| 191,503 |
| — |
| 12,415 |
| — |
| — |
| 203,918 |
| 2 |
| ||||||
Other |
| 185 |
| 1,408,519 |
| — |
| 560,025 |
| 248,046 |
| 156,449 |
| 2,373,039 |
| 24 |
| ||||||
Total |
| 575 |
| $ | 4,088,170 |
| $ | 2,822,709 |
| $ | 2,137,140 |
| $ | 708,556 |
| $ | 269,048 |
| $ | 10,025,623 |
| 100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mezzanine and HCR ManorCare secured debt loan investments not allocated to geographic regions |
| $ | 1,789,452 |
|
|
|
NOI and Interest |
| Total |
| Senior |
| Life |
| Medical |
|
|
| Skilled |
|
|
| % of |
| ||||||
Income by State |
| Properties |
| Housing |
| Science |
| Office |
| Hospital |
| Nursing |
| Total |
| Total |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
CA |
| 131 |
| $ | 46,990 |
| $ | 197,731 |
| $ | 11,102 |
| $ | 15,868 |
| $ | 2,161 |
| $ | 273,852 |
| 32 |
|
TX |
| 80 |
| 34,845 |
| — |
| 47,520 |
| 27,544 |
| 409 |
| 110,318 |
| 13 |
| ||||||
FL |
| 50 |
| 43,560 |
| — |
| 12,730 |
| 7,634 |
| — |
| 63,924 |
| 7 |
| ||||||
CO |
| 24 |
| 12,058 |
| — |
| 15,311 |
| 1,347 |
| 3,020 |
| 31,736 |
| 4 |
| ||||||
VA |
| 21 |
| 20,768 |
| — |
| 4,106 |
| — |
| 6,855 |
| 31,729 |
| 4 |
| ||||||
UT |
| 33 |
| 1,606 |
| 9,963 |
| 13,022 |
| — |
| 689 |
| 25,280 |
| 3 |
| ||||||
WA |
| 14 |
| 7,838 |
| — |
| 16,190 |
| — |
| — |
| 24,028 |
| 3 |
| ||||||
NJ |
| 13 |
| 23,633 |
| — |
| — |
| — |
| — |
| 23,633 |
| 3 |
| ||||||
TN |
| 23 |
| 2,740 |
| — |
| 15,039 |
| — |
| 3,412 |
| 21,191 |
| 3 |
| ||||||
MD |
| 12 |
| 15,648 |
| — |
| 2,931 |
| — |
| — |
| 18,579 |
| 2 |
| ||||||
Other |
| 174 |
| 129,834 |
| — |
| 38,712 |
| 32,006 |
| 22,650 |
| 223,202 |
| 26 |
| ||||||
Total |
| 575 |
| $ | 339,520 |
| $ | 207,694 |
| $ | 176,663 |
| $ | 84,399 |
| $ | 39,196 |
| $ | 847,472 |
| 100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mezzanine and HCR ManorCare secured debt loan interest income not allocated to geographic regions |
| $ | 118,348 |
|
|
|
Operator/Tenant Diversification
|
| Primary |
| Annualized Revenues(2) |
| |||
Company |
| Segment |
| Amount |
| % |
| |
Sunrise Senior Living |
| Senior housing |
| $ | 111,002 |
| 12 |
|
Brookdale |
| Senior housing |
| 60,725 |
| 7 |
| |
HCR ManorCare |
| Skilled nursing |
| 54,264 |
| 6 |
| |
HCA |
| Hospital |
| 52,772 |
| 6 |
| |
Emeritus Corporation |
| Senior housing |
| 46,712 |
| 5 |
| |
Genentech |
| Life science |
| 35,032 |
| 4 |
| |
Amgen |
| Life science |
| 25,927 |
| 3 |
| |
Aegis Senior Living |
| Senior housing |
| 20,189 |
| 2 |
| |
Tenet Healthcare Corporation |
| Hospital |
| 18,991 |
| 2 |
| |
Cirrus |
| Hospital |
| 16,604 |
| 2 |
| |
Other |
|
|
| 471,249 |
| 51 |
| |
|
|
|
| $ | 913,467 |
| 100 |
|
(1) | Owned portfolio geographic concentration includes investments, NOI and interest income from investments in our leased properties and certain secured loans and excludes mezzanine loans and other investments in HCR ManorCare as the investment and interest income associated with those assets cannot be allocated to a particular geographic region. |
(2) | The most recent monthly base rent, income from direct financing leases and/or interest income annualized for twelve months. For additional details regarding “annualized revenues,” see reporting definitions. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of December 31, 2009, dollars and square feet in thousands
|
|
|
| Senior |
| Life |
| Medical |
|
|
| Skilled |
| ||||||
|
| Total |
| Housing(1) |
| Science |
| Office |
| Hospital |
| Nursing |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Property count |
| 540 |
| 200 |
| 91 |
| 183 |
| 18 |
| 48 |
| ||||||
Investment |
| $ | 9,177,235 |
| $ | 3,469,163 |
| $ | 2,660,643 |
| $ | 2,119,097 |
| $ | 673,248 |
| $ | 255,084 |
|
Percent of operating lease portfolio (by investment) |
| 98.0% |
| 99.7% |
| 94.3% |
| 99.2% |
| 100.0% |
| 100.0% |
| ||||||
Capacity |
|
|
| 22,093 Units |
| 5,854 Sq. Ft. |
| 12,694 Sq. Ft. |
| 2,510 Beds |
| 5,628 Beds |
| ||||||
Year-Over-Year Three-Month SPP
Occupancy(2): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2009 |
|
|
| 85.5% |
| 89.4% |
| 91.1% |
| 54.3% |
| 85.2% |
| ||||||
December 31, 2008 |
|
|
| 88.1% |
| 90.6% |
| 90.7% |
| 56.2% |
| 86.4% |
| ||||||
% change |
|
|
| (2.6% | ) | (1.2% | ) | 0.4% |
| (1.9%) |
| (1.2% | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI % change |
| 2.1% |
| (2.0% | ) | 7.1% |
| 4.5% |
| (1.3% | ) | 7.4% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2009 |
| $ | 186,226 |
| $ | 67,451 |
| $ | 47,895 |
| $ | 43,592 |
| $ | 18,117 |
| $ | 9,171 |
|
December 31, 2008 |
| $ | 182,043 |
| $ | 71,800 |
| $ | 40,064 |
| $ | 41,194 |
| $ | 20,225 |
| $ | 8,760 |
|
Adjusted NOI % change |
| 2.3% |
| (6.1% | ) | 19.5% |
| 5.8% |
| (10.4% | ) | 4.7% |
|
Sequential Three-Month SPP
Occupancy(2): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2009 |
|
|
| 85.5% |
| 89.4% |
| 91.1% |
| 54.3% |
| 85.2% |
| ||||||
September 30, 2009 |
|
|
| 85.8% |
| 90.8% |
| 90.9% |
| 57.5% |
| 85.2% |
| ||||||
% change |
|
|
| (0.3% | ) | (1.4% | ) | 0.2% |
| (3.2% | ) | 0.0% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI % change |
| 3.5% |
| 8.8% |
| 3.9% |
| (1.3% | ) | (1.6% | ) | (2.6% | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2009 |
| $ | 186,226 |
| $ | 67,451 |
| $ | 47,895 |
| $ | 43,592 |
| $ | 18,117 |
| $ | 9,171 |
|
September 30, 2009 |
| $ | 177,820 |
| $ | 61,628 |
| $ | 45,366 |
| $ | 43,760 |
| $ | 17,650 |
| $ | 9,416 |
|
Adjusted NOI % change |
| 4.7% |
| 9.4% |
| 5.6% |
| (0.4% | ) | 2.6% |
| (2.6% | ) |
Year-Over-Year SPP
NOI % change |
| 2.7% |
| 3.3% |
| 0.8% |
| 5.0% |
| (0.2% | ) | 5.0% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2009 |
| $ | 719,780 |
| $ | 254,974 |
| $ | 182,148 |
| $ | 175,107 |
| $ | 70,902 |
| $ | 36,649 |
|
December 31, 2008 |
| $ | 697,146 |
| $ | 263,447 |
| $ | 152,663 |
| $ | 165,491 |
| $ | 80,206 |
| $ | 35,339 |
|
Adjusted NOI % change |
| 3.2% |
| (3.2% | ) | 19.3% |
| 5.8% |
| (11.6% | ) | 3.7% |
|
(1) | Excludes 30 properties which are classified as direct financing leases. |
(2) | Occupancy percentages for senior housing, hospital and skilled nursing are calculated based on the average three month occupancy one quarter in arrears from the period presented. Occupancy percentages for life science and medical office are as of the end of the period presented. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
At December 31, 2009, dollars and square feet in thousands
|
| Expiration Year(1) |
| ||||||||||||||||||||||||||||||||||
Segment |
| Total |
| 2010(2) |
| 2011 |
| 2012 |
| 2013 |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| 2018 |
| 2019 |
| Thereafter |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Lease Expirations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Senior housing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 231 |
| 4 |
| 3 |
| 4 |
| 6 |
| 8 |
| 2 |
| 24 |
| 26 |
| 49 |
| 12 |
| 93 |
| ||||||||||||
Annualized revenues |
| $ | 301,912 |
| $ | 664 |
| $ | 785 |
| $ | 1,075 |
| $ | 18,278 |
| $ | 12,150 |
| $ | 3,174 |
| $ | 27,079 |
| $ | 31,675 |
| $ | 85,895 |
| $ | 13,939 |
| $ | 107,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Life science: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Square feet |
| 5,464 |
| 306 |
| 417 |
| 194 |
| 387 |
| 408 |
| 571 |
| 263 |
| 733 |
| 411 |
| — |
| 1,774 |
| ||||||||||||
Annualized revenues |
| $ | 191,183 |
| $ | 7,085 |
| $ | 13,254 |
| $ | 4,668 |
| $ | 11,355 |
| $ | 8,504 |
| $ | 17,912 |
| $ | 7,988 |
| $ | 24,273 |
| $ | 23,492 |
| $ | — |
| $ | 72,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Square feet |
| 11,651 |
| 2,325 |
| 1,424 |
| 1,640 |
| 1,258 |
| 1,290 |
| 664 |
| 540 |
| 509 |
| 710 |
| 583 |
| 708 |
| ||||||||||||
Annualized revenues |
| $ | 236,851 |
| $ | 49,429 |
| $ | 31,502 |
| $ | 33,796 |
| $ | 23,435 |
| $ | 29,315 |
| $ | 13,525 |
| $ | 10,397 |
| $ | 11,371 |
| $ | 13,418 |
| $ | 12,061 |
| $ | 8,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 18 |
| 1 |
| — |
| — |
| 1 |
| 3 |
| — |
| — |
| 2 |
| — |
| 4 |
| 7 |
| ||||||||||||
Annualized revenues |
| $ | 60,096 |
| $ | 2,973 |
| $ | — |
| $ | — |
| $ | 2,424 |
| $ | 16,018 |
| $ | — |
| $ | — |
| $ | 4,480 |
| $ | — |
| $ | 5,911 |
| $ | 28,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Skilled nursing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 48 |
| — |
| 1 |
| — |
| 10 |
| 12 |
| 5 |
| 5 |
| 9 |
| 4 |
| 1 |
| 1 |
| ||||||||||||
Annualized revenues |
| $ | 36,894 |
| $ | — |
| $ | 292 |
| $ | — |
| $ | 7,090 |
| $ | 8,118 |
| $ | 3,261 |
| $ | 4,898 |
| $ | 8,072 |
| $ | 2,664 |
| $ | 1,314 |
| $ | 1,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total annualized revenues |
| $ | 826,936 |
| $ | 60,151 |
| $ | 45,833 |
| $ | 39,539 |
| $ | 62,582 |
| $ | 74,105 |
| $ | 37,872 |
| $ | 50,362 |
| $ | 79,871 |
| $ | 125,469 |
| $ | 33,225 |
| $ | 217,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Debt Investment Maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Senior housing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 471 |
| $ | 166 |
| $ | 305 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 30,183 |
| $ | 11,777 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 16,556 |
| $ | 1,850 |
| $ | — |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Skilled nursing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 55,877 |
| $ | 1,433 |
| $ | — |
| $ | — |
| $ | 54,264 |
| $ | 180 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total annualized revenues |
| $ | 86,531 |
| $ | 13,376 |
| $ | 305 |
| $ | — |
| $ | 54,264 |
| $ | 180 |
| $ | — |
| $ | 16,556 |
| $ | 1,850 |
| $ | — |
| $ | — |
| $ | — |
|
(1) | The most recent monthly base rent, income from direct financing leases and/or interest income annualized for twelve months. For additional details regarding “annualized revenues,” see reporting definitions. |
(2) | Includes month-to-month and holdover leases. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Senior Housing Portfolio
As of and for the year ended December 31, 2009, dollars in thousands | ||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||
Operating |
| Property |
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM | ||||||||
Leases |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Units |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Assisted living |
| 164 |
| $ | 2,261,440 |
| $ | 178,997 |
| 12 |
| 14,088 |
| 85.5 |
| $ | 187,648 |
| 1.12 x |
| $ | 228,473 |
| 1.37 x |
Independent living | 29 |
|
| 708,952 |
|
| 60,964 |
| 16 |
| 4,880 |
| 86.0 |
|
| 62,362 |
| 1.03 x |
|
| 71,661 |
| 1.18 x | |
CCRCs |
| 8 |
|
| 510,688 |
|
| 46,926 |
| 21 |
| 3,226 |
| 90.9 |
|
| 56,316 |
| 1.32 x |
|
| 67,598 |
| 1.58 x |
|
| 201 |
| $ | 3,481,080 |
| $ | 286,887 |
| 13 |
| 22,194 |
| 86.4 |
| $ | 306,326 |
| 1.13 x |
| $ | 367,732 |
| 1.36 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Financing |
| Property |
|
|
|
|
|
| Average |
|
|
|
| EBITDAR |
| EBITDARM | ||||||||
Leases |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Units |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Assisted living |
| 27 |
| $ | 598,313 |
| $ | 48,372 |
| 12 |
| 3,141 |
| 86.9 |
| $ | 41,898 |
| 1.09 x |
| $ | 53,292 |
| 1.39 x |
CCRCs(1) |
| 3 |
|
| 1,764 |
|
| 3,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30 |
| $ | 600,077 |
| $ | 51,486 |
| 12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Properties |
| 231 |
| $ | 4,081,157 |
| $ | 338,373 |
|
|
| 25,335 |
| 86.5 |
| $ | 348,224 |
| 1.13 x |
| $ | 421,024 |
| 1.36 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA |
| EBITDAM | |||||||
Secured Loans |
|
|
| Investment |
| Income |
|
|
|
|
|
|
| Amount |
| DSC |
| Amount |
| DSC | ||||
Assisted living |
|
|
| $ | 3,517 |
| $ | 518 |
|
|
|
|
|
|
| $ | 191 |
| 2.18 x |
| $ | 241 |
| 2.76 x |
Independent living |
|
|
| 2,896 |
|
| 310 |
|
|
|
|
|
|
|
| 668 |
| 1.51 x |
|
| 788 |
| 1.79 x | |
CCRC(2) |
|
|
|
| 600 |
|
| 319 |
|
|
|
|
|
|
|
| — |
|
|
|
| — |
| — x |
|
|
|
| $ | 7,013 |
| $ | 1,147 |
|
|
|
|
|
|
| $ | 859 |
| 1.62 x |
| $ | 1,029 |
| 1.95 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
| $ | 4,088,170 |
| $ | 339,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NOI and |
|
|
|
|
|
|
|
| |||
|
| Properties |
| Investment |
| Interest Income |
|
|
| Occupancy |
| EBITDA(R) |
| EBITDA(R)M | |||||||
Operator |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Units |
| % |
| CFC/DSC |
| CFC/DSC | |
Sunrise Senior Living(4) |
| 75 |
| 99 |
| $1,762,228 |
| 43 |
| $ | 121,955 |
| 36 |
| 8,808 |
| 87.6 |
| 1.13 x |
| 1.42 x |
Brookdale |
| 24 |
| 92 |
| 675,804 |
| 17 |
| 68,844 |
| 20 |
| 4,815 |
| 89.6 |
| 1.32 x |
| 1.55 x | |
Emeritus Corporation |
| 36 |
| 89 |
| 534,364 |
| 13 |
| 55,879 |
| 16 |
| 3,740 |
| 87.7 |
| 1.21 x |
| 1.43 x | |
Aegis Senior Living |
| 12 |
| 83 |
| 258,008 |
| 6 |
| 22,790 |
| 7 |
| 965 |
| 87.6 |
| 1.00 x |
| 1.16 x | |
Harbor Retirement Associates |
| 13 |
| 92 |
| 191,014 |
| 5 |
| 13,457 |
| 4 |
| 1,260 |
| 76.0 |
| 0.99 x |
| 1.27 x | |
Capital Senior Living |
| 15 |
| 73 |
| 176,517 |
| 4 |
| 15,001 |
| 4 |
| 1,530 |
| 80.0 |
| 1.03 x |
| 1.17 x | |
Horizon Bay Senior Communities |
| 11 |
| 91 |
| 157,203 |
| 4 |
| 11,242 |
| 3 |
| 1,278 |
| 94.0 |
| 1.49 x |
| 1.72 x | |
Other |
| 45 |
| 62 |
| 333,032 |
| 8 |
| 30,352 |
| 10 |
| 2,939 |
| 75.7 |
| 0.87 x |
| 1.06 x | |
|
| 231 |
| 86 |
| $4,088,170 |
| 100 |
| $ | 339,520 |
| 100 |
| 25,335 |
| 86.4 |
| 1.13 x |
| 1.36 x |
|
|
(1) | Represents ground leases on CCRCs. |
(2) | Represents a secured construction loan on one CCRC included in the DFL portfolio. |
(3) | Property count and units are presented for leased properties, excluding secured loans. Occupancy percentages are presented in the aggregate for leased properties and secured loans. |
(4) | Sunrise Senior Living percentage pooled consists of 75 assets under 11 separate pools. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Senior Housing Portfolio
Dollars in thousands |
| Same Property Operating Lease Portfolio |
|
| Total Portfolio |
| ||||||||||||||||||||
|
|
| As of and for the |
|
|
|
| ||||||||||||||||||
| As of and for the Quarter Ended |
| YTD Period Ended |
|
| As of and for the Twelve Months Ended |
| ||||||||||||||||||
| 12/31/09 |
| 09/30/09 |
| 12/31/08 |
| 12/31/09 |
| 12/31/08 |
|
| 12/31/09 |
| 09/30/09(1) |
| 12/31/08(1) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property count |
| 200 |
|
| 200 |
|
| 200 |
|
| 200 |
|
| 200 |
|
|
| 231 |
|
| 233 |
|
| 235 |
|
Investment | $ | 3,469,163 |
| $ | 3,466,693 |
| $ | 3,468,771 |
| $ | 3,469,163 |
| $ | 3,468,771 |
|
| $ | 4,088,170 |
| $ | 4,113,923 |
| $ | 4,145,965 |
|
Units |
| 22,093 |
|
| 22,073 |
|
| 22,097 |
|
| 22,093 |
|
| 22,097 |
|
|
| 25,335 |
|
| 25,457 |
|
| 25,599 |
|
3-Month Occupancy %(2) |
| 85.5 |
|
| 85.8 |
|
| 88.1 |
|
| 85.5 |
|
| 88.1 |
|
|
| 85.5 |
|
| 85.7 |
|
| 88.4 |
|
12-Month Occupancy %(2) |
| 86.4 |
|
| 87.1 |
|
| 89.1 |
|
| 86.4 |
|
| 89.1 |
|
|
| 86.4 |
|
| 87.1 |
|
| 89.3 |
|
EBITDA(R)(3) | $ | 305,151 |
| $ | 307,076 |
| $ | 311,311 |
| $ | 305,151 |
| $ | 311,311 |
|
| $ | 349,083 |
| $ | 353,150 |
| $ | 357,874 |
|
EBITDA(R) CFC/DSC(3) |
| 1.13 x |
|
| 1.15 x |
|
| 1.18 x |
|
| 1.13 x |
|
| 1.18 x |
|
|
| 1.13 x |
|
| 1.16 x |
|
| 1.17 x |
|
EBITDA(R)M(3) | $ | 366,384 |
| $ | 368,268 |
| $ | 372,568 |
| $ | 366,384 |
| $ | 372,568 |
|
| $ | 422,053 |
| $ | 426,335 |
| $ | 433,954 |
|
EBITDA(R)M CFC/DSC(3) |
| 1.36 x |
|
| 1.38 x |
|
| 1.41 x |
|
| 1.36 x |
|
| 1.41 x |
|
|
| 1.36 x |
|
| 1.40 x |
|
| 1.42 x |
|
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related revenues | $ | 73,945 |
| $ | 68,057 |
| $ | 78,514 |
| $ | 289,646 |
| $ | 287,539 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(4) |
| 136 |
|
| 9 |
|
| (2,923 | ) |
| (3,442 | ) |
| (10,468 | ) |
|
|
|
|
|
|
|
|
|
|
| $ | 74,081 |
| $ | 68,066 |
| $ | 75,591 |
| $ | 286,204 |
| $ | 277,071 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rents |
| (5,838 | ) |
| (5,689 | ) |
| (3,757 | ) |
| (23,003 | ) |
| (13,680 | ) |
|
|
|
|
|
|
|
|
|
|
Above (below) market lease intangibles, net |
| (792 | ) |
| (749 | ) |
| (34 | ) |
| (8,227 | ) |
| 56 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 67,451 |
| $ | 61,628 |
| $ | 71,800 |
| $ | 254,974 |
| $ | 263,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Amounts reflected conform to current presentation, without giving effect to discontinued operations. |
(2) | Occupancy percentages are one quarter in arrears from the period presented. Total portfolio occupancy percentages are presented in the aggregate for leased properties and secured loans. |
(3) | EBITDA(R) and EBITDA(R)M amounts and coverages are based on the trailing twelve-month period presented and are one quarter in arrears from the period presented. |
(4) | Excludes certain non-property specific operating expenses allocated to each segment. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of and for the year ended December 31, 2009, unless otherwise indicated, dollars and square feet in thousands |
| Property |
|
|
|
|
|
| Average |
| Square |
|
|
| ||||
Leased Properties |
| Count |
| Investment |
| NOI(1) |
| Age (Years) |
| Feet |
| Occupancy %(2) |
| ||||
San Francisco |
|
| 70 |
| $ | 2,243,621 |
| $ | 162,240 |
| 16 |
|
| 4,171 |
| 89.1 |
|
San Diego |
|
| 15 |
|
| 488,793 |
|
| 35,492 |
| 18 |
|
| 1,328 |
| 89.7 |
|
Utah |
|
| 9 |
|
| 90,295 |
|
| 9,962 |
| 10 |
|
| 584 |
| 95.1 |
|
|
|
| 94 |
| $ | 2,822,709 |
| $ | 207,694 |
| 16 |
|
| 6,083 |
| 89.8 |
|
Tenant Concentration |
| Annualized Revenues |
| Square Feet |
| ||||||||
Tenant |
| Amount |
| % |
| Amount |
| % |
| ||||
Genentech |
| $ | 35,032 |
|
| 18 |
|
| 794 |
|
| 15 |
|
Amgen |
|
| 25,927 |
|
| 14 |
|
| 433 |
|
| 8 |
|
Takeda |
|
| 15,939 |
|
| 8 |
|
| 324 |
|
| 6 |
|
Rigel Pharmaceuticals |
|
| 14,438 |
|
| 8 |
|
| 147 |
|
| 3 |
|
Exelixis, Inc. |
|
| 12,502 |
|
| 7 |
|
| 295 |
|
| 5 |
|
ARUP |
|
| 5,088 |
|
| 3 |
|
| 324 |
|
| 6 |
|
Alexza Pharmaceuticals, Inc. |
|
| 4,916 |
|
| 3 |
|
| 107 |
|
| 2 |
|
Sequenom |
|
| 4,713 |
|
| 2 |
|
| 83 |
|
| 2 |
|
Myriad Genetics |
|
| 4,500 |
|
| 2 |
|
| 225 |
|
| 4 |
|
NuVasive, Inc. |
|
| 4,362 |
|
| 2 |
|
| 145 |
|
| 3 |
|
Other |
|
| 63,766 |
|
| 33 |
|
| 2,587 |
|
| 46 |
|
|
| $ | 191,183 |
|
| 100 |
|
| 5,464 |
|
| 100 |
|
Portfolio Trends | ||||||||||||||||||||||||||
|
| Same Property Operating Lease Portfolio |
|
| Total Portfolio |
| ||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the YTD Period Ended |
|
| At the Period Ended |
| ||||||||||||||||||
|
| 12/31/09 |
| 09/30/09 |
| 12/31/08 |
| 12/31/09 |
| 12/31/08 |
|
| 12/31/09 |
| 09/30/09(3) |
| 12/31/08(3) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property count |
|
| 91 |
|
| 91 |
|
| 91 |
|
| 91 |
|
| 91 |
|
|
| 94 |
|
| 94 |
|
| 96 |
|
Investment |
| $ | 2,660,643 |
| $ | 2,654,071 |
| $ | 2,639,089 |
| $ | 2,660,643 |
| $ | 2,639,089 |
|
| $ | 2,822,709 |
| $ | 2,815,660 |
| $ | 2,810,577 |
|
Square feet |
|
| 5,854 |
|
| 5,854 |
|
| 5,843 |
|
| 5,854 |
|
| 5,843 |
|
|
| 6,083 |
|
| 6,083 |
|
| 6,126 |
|
Occupancy %(2) |
|
| 89.4 |
|
| 90.8 |
|
| 90.6 |
|
| 89.4 |
|
| 90.6 |
|
|
| 89.8 |
|
| 91.1 |
|
| 91.1 |
|
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related revenues |
| $ | 51,485 |
| $ | 49,578 |
| $ | 48,991 |
| $ | 198,902 |
| $ | 199,777 |
|
|
|
|
|
|
|
|
|
|
|
Tenant recoveries |
|
| 9,788 |
|
| 9,305 |
|
| 8,476 |
|
| 38,884 |
|
| 33,221 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(4) |
|
| (11,295 | ) |
| (10,773 | ) |
| (10,806 | ) |
| (42,813 | ) |
| (39,520 | ) |
|
|
|
|
|
|
|
|
|
|
|
| $ | 49,978 |
| $ | 48,110 |
| $ | 46,661 |
| $ | 194,973 |
| $ | 193,478 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rents |
|
| 943 |
|
| (3,211 | ) |
| (5,452 | ) |
| (8,754 | ) |
| (19,012 | ) |
|
|
|
|
|
|
|
|
|
|
Below market lease intangibles, net |
|
| 3 |
|
| 467 |
|
| (1,145 | ) |
| (1,042 | ) |
| (3,753 | ) |
|
|
|
|
|
|
|
|
|
|
Lease termination fees |
|
| (3,029 | ) |
| — |
|
| — |
|
| (3,029 | ) |
| (18,050 | ) |
|
|
|
|
|
|
|
|
|
|
|
| $ | 47,895 |
| $ | 45,366 |
| $ | 40,064 |
| $ | 182,148 |
| $ | 152,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Excludes $3.9 million of rent, $3.4 million from San Francisco and $0.5 million from San Diego, collected on leases where the respective tenant improvement build outs are not complete (deferred rent). These leases are included in occupied square feet and annualized revenues when determining occupancy and tenant concentration. |
(2) | Occupancy percentages are presented as of the end of the period reported. |
(3) | Amounts reflected conform to current presentation, without giving effect to discontinued operations. |
(4) | Excludes certain non-property specific operating expenses allocated to each segment. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Life Science Portfolio
Dollars and square feet in thousands, except dollars per square foot |
| ||||||||||||||||||||||||||||
|
| 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 |
| |||||||
2010(1) |
|
| 306 |
| 6 |
| $ | 7,085 |
| 4 |
| 150 |
| $ | 4,189 |
| 149 |
| $ | 2,805 |
| 7 |
| $ | 91 |
| ||
2011 |
| 417 |
| 8 |
| 13,254 |
| 7 |
| 365 |
| 11,656 |
| 52 |
| 1,598 |
| — |
| — |
| |||||||
2012 |
| 194 |
| 4 |
| 4,668 |
| 2 |
| 120 |
| 3,164 |
| 74 |
| 1,504 |
| — |
| — |
| |||||||
Thereafter |
| 4,547 |
| 82 |
| 166,176 |
| 87 |
| 3,082 |
| 130,845 |
| 917 |
| 25,744 |
| 548 |
| 9,587 |
| |||||||
|
|
| 5,464 |
| 100 |
| $ | 191,183 |
| 100 |
| 3,717 |
| $ | 149,854 |
| 1,192 |
| $ | 31,651 |
| 555 |
| $ | 9,678 |
| ||
Leasing Activity | Leased |
| Annualized |
| % |
| Tenant |
| Leasing |
| Average |
| Retention |
| |||||
| Square |
| Base Rent Per |
| Change |
| Improvements |
| Costs Per |
| Lease Term |
| Rate |
| |||||
| Feet |
| Square Foot |
| In Rents |
| Per Square Foot |
| Square Foot |
| (Months) |
| YTD |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of December 31, 2008 | 5,579 |
| $ | 33.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (159 | ) |
| 20.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 126 |
|
| 16.68 |
| (7.2 | ) | $ | — |
| $ | 2.54 |
|
| 109 |
|
| 79.7 |
|
New leases and expansions | 87 |
|
| 33.70 |
|
|
|
| 68.95 |
|
| 12.28 |
|
| 79 |
|
|
|
|
Terminations | (34 | ) |
| 13.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of March 31, 2009 | 5,599 |
| $ | 34.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (317 | ) |
| 28.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 310 |
|
| 24.56 |
| (13.6 | ) |
| 1.96 |
|
| 6.70 |
|
| 54 |
|
| 91.9 |
|
New leases and expansions | 39 |
|
| 17.70 |
|
|
|
| — |
|
| — |
|
| 2 |
|
|
|
|
Terminations | (42 | ) |
| 18.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of June 30, 2009 | 5,589 |
| $ | 35.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redevelopments | (54 | ) |
| 15.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (75 | ) |
| 22.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 48 |
|
| 22.94 |
| 18.4 |
|
| — |
|
| 5.46 |
|
| 45 |
|
| 88.0 |
|
New leases and expansions | 78 |
|
| 19.75 |
|
|
|
| 71.03 |
|
| 0.33 |
|
| 73 |
|
|
|
|
Terminations | (41 | ) |
| 38.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of September 30, 2009 | 5,545 |
| $ | 35.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (57 | ) |
| 10.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 57 |
|
| 16.91 |
| 69.0 |
|
| 4.37 |
|
| 4.79 |
|
| 41 |
|
| 89.2 |
|
New leases and expansions | 37 |
|
| 35.09 |
|
|
|
| 16.07 |
|
| 4.50 |
|
| 22 |
|
|
|
|
Terminations | (118 | ) |
| 38.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of December 31, 2009 | 5,464 |
| $ | 34.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes month-to-month and holdover leases. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Medical Office Portfolio
As of and for the year ended December 31, 2009, dollars and square feet in thousands | ||||||||||||||||||
|
| Property |
|
|
|
|
|
| Average |
|
|
|
|
|
| |||
Leased Properties |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Square Feet |
| Occupancy % |
|
| ||||
On-Campus |
|
| 141 |
| $ | 1,727,527 |
| $ | 140,089 |
| 18 |
|
| 10,695 |
| 90.9 |
|
|
Off-Campus |
|
| 43 |
|
| 409,613 |
|
| 36,574 |
| 17 |
|
| 2,117 |
| 90.9 |
|
|
|
|
| 184 |
| $ | 2,137,140 |
| $ | 176,663 |
| 18 |
|
| 12,812 |
| 90.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Trends
| |||||||||||||||||||||||||
| Same Property Operating Lease Portfolio |
|
| Total Portfolio |
| ||||||||||||||||||||
| As of and for the Quarter Ended |
| As of and for the YTD Period Ended |
|
| At the Period Ended |
| ||||||||||||||||||
| 12/31/09 |
| 09/30/09 |
| 12/31/08 |
| 12/31/09 |
| 12/31/08 |
|
| 12/31/09 |
| 09/30/09(1) |
| 12/31/08(1) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property count |
| 183 |
|
| 183 |
|
| 183 |
|
| 183 |
|
| 183 |
|
|
| 184 |
|
| 184 |
|
| 188 |
|
Investment | $ | 2,119,097 |
| $ | 2,109,447 |
| $ | 2,093,822 |
| $ | 2,119,097 |
| $ | 2,093,822 |
|
| $ | 2,137,140 |
| $ | 2,127,477 |
| $ | 2,125,280 |
|
Square feet |
| 12,694 |
|
| 12,697 |
|
| 12,688 |
|
| 12,694 |
|
| 12,688 |
|
|
| 12,812 |
|
| 12,815 |
|
| 12,952 |
|
Occupancy %(2) |
| 91.1 |
|
| 90.9 |
|
| 90.7 |
|
| 91.1 |
|
| 90.7 |
|
|
| 90.9 |
|
| 90.7 |
|
| 90.3 |
|
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related revenues | $ | 63,702 |
| $ | 65,065 |
| $ | 62,824 |
| $ | 258,460 |
| $ | 252,170 |
|
|
|
|
|
|
|
|
|
|
|
Tenant recoveries |
| 11,417 |
|
| 12,197 |
|
| 11,526 |
|
| 46,337 |
|
| 45,898 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(3) |
| (30,497 | ) |
| (32,049 | ) |
| (31,666 | ) |
| (123,481 | ) |
| (125,408 | ) |
|
|
|
|
|
|
|
|
|
|
| $ | 44,622 |
| $ | 45,213 |
| $ | 42,684 |
| $ | 181,316 |
| $ | 172,660 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rents |
| (195 | ) |
| (443 | ) |
| (778 | ) |
| (2,027 | ) |
| (4,254 | ) |
|
|
|
|
|
|
|
|
|
|
Below market lease intangibles, net |
| (785 | ) |
| (846 | ) |
| (712 | ) |
| (3,193 | ) |
| (2,875 | ) |
|
|
|
|
|
|
|
|
|
|
Lease terminations |
| (50 | ) |
| (164 | ) |
| — |
|
| (989 | ) |
| (40 | ) |
|
|
|
|
|
|
|
|
|
|
| $ | 43,592 |
| $ | 43,760 |
| $ | 41,194 |
| $ | 175,107 |
| $ | 165,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Amounts reflected conform to current presentation, without giving effect to discontinued operations. |
(2) | Occupancy percentages are presented as of the end of the period reported. |
(3) | Excludes certain non-property specific operating expenses allocated to each segment. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Medical Office Portfolio
Square feet in thousands |
Leased |
| Annualized |
| % |
| Tenant |
| Leasing |
| Average |
| Retention |
| ||||||
| Square |
| Base Rent Per |
| Change |
| Improvements |
| Costs Per |
| Lease Term |
| Rate |
| |||||
| Feet |
| Square Foot |
| In Rents |
| Per Square Foot |
| Square Foot |
| (Months) |
| YTD |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of December 31, 2008 | 11,699 |
| $ | 20.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dispositions | (36 | ) |
| 24.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (468 | ) |
| 21.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 369 |
|
| 19.77 |
| 1.2 |
| $ | 7.70 |
| $ | 1.73 |
|
| 38 |
|
| 78.7 |
|
New leases | 162 |
|
| 19.19 |
|
|
|
| 20.64 |
|
| 3.42 |
|
| 49 |
|
|
|
|
Terminations | (35 | ) |
| 21.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of March 31, 2009 | 11,691 |
| $ | 20.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dispositions | (38 | ) |
| 14.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (686 | ) |
| 18.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 542 |
|
| 18.84 |
| 15.6 |
|
| 2.62 |
|
| 0.89 |
|
| 35 |
|
| 78.8 |
|
New leases | 268 |
|
| 17.96 |
|
|
|
| 10.84 |
|
| 1.76 |
|
| 53 |
|
|
|
|
Terminations | (89 | ) |
| 19.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of June 30, 2009 | 11,688 |
| $ | 21.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dispositions | (62 | ) |
| 19.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (288 | ) |
| 21.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 227 |
|
| 21.96 |
| 1.3 |
|
| 3.34 |
|
| 1.04 |
|
| 34 |
|
| 78.8 |
|
New leases | 126 |
|
| 19.59 |
|
|
|
| 18.51 |
|
| 4.56 |
|
| 63 |
|
|
|
|
Terminations | (63 | ) |
| 22.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of September 30, 2009 | 11,628 |
| $ | 21.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expirations | (418 | ) |
| 24.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewals, amendments and extensions | 303 |
|
| 23.23 |
| 1.6 |
|
| 7.12 |
|
| 2.51 |
|
| 48 |
|
| 77.4 |
|
New leases | 170 |
|
| 20.37 |
|
|
|
| 24.53 |
|
| 6.33 |
|
| 60 |
|
|
|
|
Terminations | (32 | ) |
| 20.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased Square Feet as of December 31, 2009 | 11,651 |
| $ | 21.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of and for the year ended December 31, 2009, dollars in thousands, unless otherwise indicated | ||||||||||||||||||||||||
Leased |
| Property |
|
|
|
|
| Average |
|
|
|
|
| EBITDAR(1) |
| EBITDARM(1) | ||||||||
Properties |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Beds |
| Occupancy %(1) |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Acute care |
| 6 |
| $ | 478,927 |
| $ | 59,462 |
| 32 |
| 1,742 |
| 56.6 |
| $ | 243,392 |
| 5.01 x |
| $ | 267,586 |
| 5.50 x |
Rehab |
| 7 |
|
| 95,427 |
|
| 8,444 |
| 19 |
| 487 |
| 60.5 |
|
| 25,347 |
| 2.96 x |
|
| 28,665 |
| 3.35 x |
Specialty |
| 2 |
|
| 63,689 |
|
| 5,474 |
| 26 |
| 37 |
| N/A |
|
| 25,967 |
| 5.13 x |
|
| 28,796 |
| 5.69 x |
LTACH |
| 3 |
|
| 35,205 |
|
| 8,018 |
| 16 |
| 244 |
| 52.9 |
|
| 12,177 |
| 1.77 x |
|
| 15,825 |
| 2.29 x |
|
| 18 |
| $ | 673,248 |
| $ | 81,398 |
| 23 |
| 2,510 |
| 57.0 |
| $ | 306,883 |
| 4.44 x |
| $ | 340,872 |
| 4.93 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured |
|
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA(1) |
| EBITDAM(1) | |||||||
Loans |
|
|
| Investment |
| Income |
|
|
|
|
|
|
| Amount |
| DSC |
| Amount |
| DSC | ||||
Acute care |
|
|
| $ | 35,308 |
| $ | 3,001 |
|
|
|
|
|
|
| $ | 12,069 |
| 4.02 x |
| $ | 14,034 |
| 4.68 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine |
|
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA |
| EBITDAM | |||||||
Loans |
|
|
| Investment |
| Income |
|
|
|
|
|
|
| Amount |
| DSC |
| Amount |
| DSC | ||||
Acute care |
|
|
| $ | 152,448 |
| $ | 23,023 |
|
|
|
|
|
|
| $ | 45,678 |
| 2.70 x |
| $ | 50,739 |
| 3.00 x |
Specialty |
|
|
|
| 98,674 |
|
| 14,271 |
|
|
|
|
|
|
|
| 18,381 |
| 1.98 x |
|
| 18,381 |
| 1.98 x |
|
|
|
| $ | 251,122 |
| $ | 37,294 |
|
|
|
|
|
|
| $ | 64,059 |
| 2.44 x |
| $ | 69,120 |
| 2.64 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
| $ | 959,678 |
| $ | 121,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operator Concentration(2) | ||||||||||||||||||||||
|
|
|
|
|
| NOI and |
|
|
|
|
|
|
|
| ||||||||
|
| Properties |
| Investment |
| Interest Income |
|
|
|
|
|
|
|
| ||||||||
Operator(1) |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Beds |
|
|
|
|
|
| ||
HCA(3) |
| 1 |
| — |
| $ | 318,943 |
| 33 |
| $ | 43,065 |
| 35 |
| 645 |
|
|
|
|
|
|
Tenet Healthcare Corp |
| 4 |
| — |
|
| 223,633 |
| 23 |
|
| 26,888 |
| 22 |
| 921 |
|
|
|
|
|
|
Cirrus Health |
| 2 |
| — |
|
| 142,012 |
| 15 |
|
| 17,895 |
| 15 |
| 37 |
|
|
|
|
|
|
HealthSouth |
| 5 |
| 80 |
|
| 55,981 |
| 6 |
|
| 8,566 |
| 7 |
| 372 |
|
|
|
|
|
|
Other |
| 6 |
| 50 |
|
| 219,109 |
| 23 |
|
| 25,279 |
| 21 |
| 535 |
|
|
|
|
|
|
|
| 18 |
| 39 |
| $ 959,678 |
| 100 |
| $ | 121,693 |
| 100 |
| 2,510 |
|
|
|
|
|
|
|
|
(1) | Certain operators in HCP’s hospital portfolio are not required under their respective leases to provide operational data. |
(2) | Property count and beds are presented for leased properties, excludes secured and mezzanine loans. |
(3) | Investment amount includes $167 million related to leased properties and $152 million related to market securities. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Hospital Portfolio
Dollars in thousands | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| Same Property Operating Lease Portfolio |
|
| Total Portfolio |
| |||||||||||||||||||||
| As of and for the Quarter Ended |
|
| As of and for the YTD Period Ended |
|
| As of and for the Twelve Months Ended |
| ||||||||||||||||||
| 12/31/09 |
| 09/30/09 |
| 12/31/08 |
|
| 12/31/09 |
| 12/31/08 |
|
| 12/31/09 |
| 09/30/09(1) |
| 12/31/08 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property count |
| 18 |
|
| 18 |
|
| 18 |
|
|
| 18 |
|
| 18 |
|
|
| 18 |
|
| 18 |
|
| 20 |
|
Investment | $ | 673,248 |
| $ | 673,109 |
| $ | 672,760 |
|
| $ | 673,248 |
| $ | 672,760 |
|
| $ | 959,678 |
| $ | 975,967 |
| $ | 1,088,506 |
|
Beds |
| 2,510 |
|
| 2,510 |
|
| 2,463 |
|
|
| 2,510 |
|
| 2,463 |
|
|
| 2,510 |
|
| 2,510 |
|
| 2,620 |
|
3-Month Occupancy %(2) |
| 54.3 |
|
| 57.5 |
|
| 56.2 |
|
|
| 54.3 |
|
| 56.2 |
|
|
|
|
|
|
|
|
|
|
|
12-Month Occupancy %(2) |
| 57.0 |
|
| 57.6 |
|
| 60.9 |
|
|
| 57.0 |
|
| 60.9 |
|
|
|
|
|
|
|
|
|
|
|
EBITDAR(3) | $ | 306,883 |
| $ | 304,597 |
| $ | 288,699 |
|
| $ | 306,883 |
| $ | 288,699 |
|
|
|
|
|
|
|
|
|
|
|
EBITDAR CFC(3) |
| 4.44 x |
|
| 4.46 x |
|
| 4.33 x |
|
|
| 4.44 x |
|
| 4.33 x |
|
|
|
|
|
|
|
|
|
|
|
EBITDARM(3) | $ | 340,872 |
| $ | 338,934 |
| $ | 323,257 |
|
| $ | 340,872 |
| $ | 323,257 |
|
|
|
|
|
|
|
|
|
|
|
EBITDARM CFC(3) |
| 4.93 x |
|
| 4.96 x |
|
| 4.85 x |
|
|
| 4.93 x |
|
| 4.85 x |
|
|
|
|
|
|
|
|
|
|
|
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related revenues | $ | 21,614 |
| $ | 21,483 |
| $ | 21,238 |
|
| $ | 85,272 |
| $ | 84,835 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(4) |
| (1,337 | ) |
| (878 | ) |
| (687 | ) |
|
| (3,874 | ) |
| (3,266 | ) |
|
|
|
|
|
|
|
|
|
|
| $ | 20,277 |
| $ | 20,605 |
| $ | 20,551 |
|
| $ | 81,398 |
| $ | 81,569 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rents |
| (1,942 | ) |
| (2,737 | ) |
| (108 | ) |
|
| (9,625 | ) |
| (492 | ) |
|
|
|
|
|
|
|
|
|
|
Below market lease intangibles, net |
| (218 | ) |
| (218 | ) |
| (218 | ) |
|
| (871 | ) |
| (871 | ) |
|
|
|
|
|
|
|
|
|
|
| $ | 18,117 |
| $ | 17,650 |
| $ | 20,225 |
|
| $ | 70,902 |
| $ | 80,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reflected conform to current presentation, without giving effect to discontinued operations. | |
(2) | Occupancy percentages are one quarter in arrears from the period presented. Total portfolio occupancy percentages are presented in the aggregate for leased properties and secured loans. |
(3) | EBITDAR and EBITDARM amounts and coverages are based on the trailing twelve-month period one quarter in arrears from the period presented. |
(4) | Excludes certain non-property specific operating expenses allocated to each segment. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Skilled Nursing Portfolio
As of and for the year ended December 31, 2009, dollars in thousands, unless otherwise indicated | ||||||||||||||||||||||||
Leased |
| Property |
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM | ||||||||
Properties(1) |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Beds |
| Occupancy % |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Skilled nursing |
| 48 |
| $ | 255,084 |
| $ | 37,546 |
| 24 |
| 5,628 |
| 85.4 |
| $ | 57,122 |
| 1.56 x |
| $ | 77,111 |
| 2.11 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured |
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA |
| EBITDAM | |||||||
Loans |
|
| Investment |
| Income |
|
|
|
|
|
|
| Amount |
| DSC |
| Amount |
| DSC | ||||
HCR ManorCare(2) |
|
| $ | 603,943 |
| $ | 19,951 |
|
|
|
|
|
|
| $ | 182,271 |
| 16.63 x |
| $ | 223,902 |
| 20.43 x |
Other |
|
|
| 13,964 |
|
| 1,650 |
|
|
|
|
|
|
| 5,609 |
| 2.25 x |
| 6,988 |
| 2.80 x | ||
|
|
| $ | 617,907 |
| $ | 21,601 |
|
|
|
|
|
|
| $ | 187,880 |
| 13.97 x |
| $ | 230,890 |
| 17.16 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Mezzanine |
|
|
|
|
| Interest |
|
|
|
|
|
|
| EBITDA |
| EBITDAM | |||||||
Loans |
|
| Investment |
| Income |
|
|
|
|
|
|
| Amount |
| DSC |
| Amount |
| DSC | ||||
HCR ManorCare(3) |
|
| $ | 934,387 |
| $ | 61,103 |
|
|
|
|
|
|
| $ | 159,224 |
| 3.68 x |
| $ | 195,591 |
| 4.52 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total |
|
| $ | 1,807,378 |
| $ | 120,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operator Concentration(4) | ||||||||||||||||||||||
|
|
|
|
|
| NOI and |
|
|
|
|
|
|
|
| ||||||||
|
| Properties |
| Investment |
| Interest Income |
|
|
|
|
| EBITDA(R) |
| EBITDA(R)M | ||||||||
Operator |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Beds |
| Occupancy % |
| CFC/DSC |
| CFC/DSC | ||
HCR ManorCare |
| — |
| — |
| $1,538,330 |
| 85 |
| $ | 81,054 |
| 67 |
| N/A |
| N/A |
| 3.68 x |
| 4.52 x | |
Formation Capital |
| 9 |
| 100 |
|
| 63,100 |
| 4 |
|
| 6,855 |
| 6 |
| 934 |
| 94.2 |
| 2.09 x |
| 2.61 x |
Covenant Care |
| 12 |
| 100 |
|
| 62,318 |
| 4 |
|
| 9,751 |
| 8 |
| 1,373 |
| 81.0 |
| 1.58 x |
| 2.13 x |
Kindred |
| 9 |
| 100 |
|
| 38,117 |
| 2 |
|
| 8,140 |
| 7 |
| 1,288 |
| 86.4 |
| 1.24 x |
| 1.88 x |
Peak Medical Corp. |
| 4 |
| 100 |
|
| 37,844 |
| 2 |
|
| 4,418 |
| 4 |
| 479 |
| 80.9 |
| 2.15 x |
| 2.67 x |
Trilogy Health Services |
| 5 |
| 100 |
|
| 33,351 |
| 2 |
|
| 5,321 |
| 4 |
| 546 |
| 89.7 |
| 1.36 x |
| 1.74 x |
Other |
| 9 |
| 56 |
|
| 34,318 |
| 1 |
|
| 4,711 |
| 4 |
| 1,008 |
| 84.3 |
| 1.23 x |
| 1.87 x |
|
| 48 |
| 92 |
| $1,807,378 |
| 100 |
| $ | 120,250 |
| 100 |
| 5,628 |
| 85.1 |
|
|
|
|
|
|
The Company’s skilled nursing leased properties have the following revenue mix: Private-pay (26%), Medicare (36%) and Medicaid (39%). | |
(2) | Represents the $720 million participation in first mortgage debt of HCR ManorCare with a carrying value of $604 million. This interest-only participation bears interest on the face amount at LIBOR plus 1.25% and represents 45% of the $1.6 billion most senior tranche of HCR ManorCare’s mortgage debt. The mortgage debt matures in January 2013 if the borrower meets certain performance conditions and exercises a one-year extension option. At August 3, 2009, the mortgage loan was secured by a first lien on 331 HCR ManorCare facilities located in 30 states. |
(3) | Represents mezzanine loans having an aggregate face value of $1.0 billion and a carrying value of $934 million. These interest-only loans bear interest on their face amounts at LIBOR plus 4.0%. These loans mature in January 2013 and are mandatorily pre-payable in January 2012, unless the borrower satisfies certain performance conditions. At August 3, 2009, the loans were secured by an indirect pledge of equity ownership in 331 HCR ManorCare facilities located in 30 states and are subordinate to other debt of approximately $3.6 billion. |
(4) | Property count and beds are presented for leased properties, excludes secured and mezzanine loans. Occupancy percentages are presented in the aggregate for leased properties and other secured loans, excluding the Company’s interest in HCR ManorCare. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Owned Skilled Nursing Portfolio
Dollars in thousands, unless otherwise indicated
|
| Same Property Operating Lease Portfolio |
|
| Total Portfolio |
| ||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the |
|
| As of and for the Twelve Months Ended |
| ||||||||||||||||||
|
| 12/31/09 |
| 09/30/09 |
| 12/31/08 |
| 12/31/09 |
| 12/31/08 |
|
| 12/31/09 |
| 09/30/09(1) |
| 12/31/08(1) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Property count |
| 48 |
| 48 |
| 48 |
| 48 |
| 48 |
|
| 48 |
| 48 |
| 48 |
| ||||||||
Investment |
| $ | 255,084 |
| $ | 255,084 |
| $ | 254,682 |
| $ | 255,084 |
| $ | 254,682 |
|
| $ | 1,807,378 |
| $ | 1,794,649 |
| $ | 1,172,212 |
|
Beds |
| 5,628 |
| 5,628 |
| 5,658 |
| 5,628 |
| 5,658 |
|
| 5,628 |
| 5,628 |
| 6,123 |
| ||||||||
3-Month Occupancy %(2) |
| 85.2 |
| 85.2 |
| 86.4 |
| 85.2 |
| 86.4 |
|
| 84.9 |
| 85.2 |
| 86.3 |
| ||||||||
12-Month Occupancy %(2) |
| 85.4 |
| 85.7 |
| 86.3 |
| 85.4 |
| 86.3 |
|
| 85.1 |
| 85.5 |
| 86.0 |
| ||||||||
EBITDAR(3) |
| $ | 57,122 |
| $ | 57,445 |
| $ | 51,448 |
| $ | 57,122 |
| $ | 51,448 |
|
|
|
|
|
|
|
| |||
EBITDAR CFC(3) |
| 1.56 x |
| 1.59 x |
| 1.46 x |
| 1.56 x |
| 1.46 x |
|
|
|
|
|
|
|
| ||||||||
EBITDARM(3) |
| $ | 77,111 |
| $ | 77,252 |
| $ | 71,233 |
| $ | 77,111 |
| $ | 71,233 |
|
|
|
|
|
|
|
| |||
EBITDARM CFC(3) |
| 2.11 x |
| 2.13 x |
| 2.02 x |
| 2.11 x |
| 2.02 x |
|
|
|
|
|
|
|
| ||||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental and related revenues |
| $ | 9,558 |
| $ | 9,800 |
| $ | 9,000 |
| $ | 37,747 |
| $ | 35,925 |
|
|
|
|
|
|
|
| |||
Operating expenses(4) |
| (44 | ) | (36 | ) | (141 | ) | (182 | ) | (133 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 9,514 |
| $ | 9,764 |
| $ | 8,859 |
| $ | 37,565 |
| $ | 35,792 |
|
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Straight-line rents |
| (343 | ) | (348 | ) | (99 | ) | (916 | ) | (506 | ) |
|
|
|
|
|
|
| ||||||||
Above market lease intangibles, net |
| — |
| — |
| — |
| — |
| 53 |
|
|
|
|
|
|
|
| ||||||||
|
| $ | 9,171 |
| $ | 9,416 |
| $ | 8,760 |
| $ | 36,649 |
| $ | 35,339 |
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| ||||||||||||||
HCR Properties, LLC (HCR ManorCare “PropCo”) Information |
|
|
|
|
|
|
| ||||||||||||||
|
|
|
|
|
|
|
| ||||||||||||||
Portfolio Summary(5) |
|
|
|
|
|
|
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
| Non- |
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| Occupancy |
| Medicaid |
|
|
|
|
|
|
|
|
|
|
| ||||
Property Count |
| Beds |
| % |
| Revenue(6) |
| EBITDA(3) |
| EBITDAM(3) |
|
|
|
|
|
|
| ||||
331 |
| 41,496 |
| 88.3 |
| 72% |
| $ | 587,798 |
| $ | 722,050 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Debt Capital Structure (dollars in billions) |
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| 12-Month |
|
|
|
|
| ||||
|
|
|
|
|
| 12-Month |
| 12-Month |
| 3-Month |
| EBITDA DSC |
|
|
|
|
| ||||
|
|
|
| HCP |
| EBITDA |
| EBITDAM |
| EBITDA |
| at Interest- |
|
|
|
|
| ||||
|
| Total |
| Interest(7) |
| DSC |
| DSC |
| DSC |
| Rate Cap |
|
|
|
|
| ||||
First mortgage |
| $ | 1.6 |
| $ | 0.7 |
| 16.63 x |
| 20.43 x |
| 23.88 x |
| 6.87 x |
|
|
|
|
| ||
Other mortgage |
| 1.4 |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mezzanine securities |
| 1.6 |
| 1.0 |
| 3.68 x |
| 4.52 x |
| 4.57 x |
| 1.93 x |
|
|
|
|
| ||||
|
| $ | 4.6 |
| $ | 1.7 |
| 3.68 x |
| 4.52 x |
| 4.57 x |
| 1.93 x |
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||||||||||||||
Interest-Rate Caps (dollars in billions) |
|
|
|
|
|
|
| ||||||||||||||
|
|
|
|
|
| Maturity |
|
|
|
|
|
|
|
|
|
| |||||
Description |
| Notional |
| Strike Rate |
| Date |
| Index |
|
|
|
|
|
|
|
| |||||
Interest-rate cap |
| $ | 2.5 |
| 3.00% |
| January 2012 |
| 1-month LIBOR |
|
|
|
|
|
|
|
| ||||
Interest-rate cap |
| 2.1 |
| 5.25% |
| January 2012 |
| 1-month LIBOR |
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
(1) | Amounts reflected conform to current presentation, without giving effect to discontinued operations. |
(2) | Occupancy percentages are one quarter in arrears from the period presented. Total portfolio occupancy percentages are presented in the aggregate for leased properties and other secured loans, excluding the Company’s interest in HCR ManorCare. |
(3) | EBITDA(R) and EBITDA(R)M amounts and coverages are based on the trailing twelve-month period one quarter in arrears from the period presented. |
(4) | Excludes certain non-property specific operating expenses allocated to each segment. |
(5) | PropCo leases its properties to HCR III HealthCare, LLC (“OpCo”) under a 12-year triple net lease, which commenced in December 2007 and includes one 10-year extension option. Initial year base rent to OpCo is $379.5 million and escalates at 3% per annum. |
(6) | Private-pay and Medicare revenues as a percentage of total revenues are 32% and 40%, respectively. |
(7) | HCP’s participation interest in first mortgage is pari passu with the remaining first mortgage. HCP’s investments in mezzanine securities are junior to the remaining mezzanine securities. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
As of and for the year ended December 31, 2009, dollars in thousands
|
|
|
|
|
|
|
|
|
|
|
| HCP’s |
|
| |||
Unconsolidated |
|
|
| Date |
| HCP’s |
| Joint |
| HCP’s Net |
| Investment |
| Initial | |||
Institutional |
| Primary |
| Established/ |
| Ownership |
| Venture’s |
| Equity |
| Management |
| Term | |||
Joint Ventures |
| Segment |
| Acquired |
| Percentage |
| Investment |
| Investment(1) |
| Fee Income |
| (in years) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
HCP Ventures II |
| Senior housing |
| January-07 |
| 35% |
| $ | 1,099,376 |
| $ | 138,878 |
| $ | 2,789 |
| Indefinite |
HCP Ventures III |
| Medical office |
| October-06 |
| 30%(2) |
| 141,684 |
|
| 10,823 |
| 437 |
| 10 | ||
HCP Ventures IV |
| Medical office |
| April-07 |
| 20% |
| 659,458 |
|
| 40,037 |
| 2,082 |
| 10 | ||
HCP Life Science |
| Life science |
| August-07 |
| 50%-63% |
| 81,057 |
|
| 64,076 |
| 4 |
| 97-98 | ||
|
|
|
|
|
|
|
| $ | 1,981,575 |
| $ | 253,814 |
| $ | 5,312 |
|
|
| |||||||||||||||||||
| December 31, 2009 |
| December 31, 2008 |
| |||||||||||||||
|
| Senior |
| MOB |
| Life Science |
| Senior |
| MOB |
| Life Science |
| ||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Buildings and improvements |
| $ | 935,902 |
| $ | 661,227 |
| $ | 35,353 |
| $ | 935,211 |
| $ | 653,588 |
| $ | 43,124 |
|
Development costs and CIP |
| — |
| 436 |
| 207 |
| — |
| 2,966 |
| 513 |
| ||||||
Land |
| 108,907 |
| 67,820 |
| 8,271 |
| 108,907 |
| 67,776 |
| 8,271 |
| ||||||
Accumulated depreciation and amortization |
| (85,370 | ) | (75,673 | ) | (20,955 | ) | (60,143 | ) | (47,596 | ) | (26,398 | ) | ||||||
Net real estate |
| 959,439 |
| 653,810 |
| 22,876 |
| 983,975 |
| 676,734 |
| 25,510 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents and restricted cash |
| 7,215 |
| 11,505 |
| 1,427 |
| 9,142 |
| 12,235 |
| 1,269 |
| ||||||
Other assets, net |
| 51,872 |
| 18,801 |
| 2,045 |
| 39,733 |
| 17,371 |
| 3,145 |
| ||||||
Intangible assets, net |
| 39,745 |
| 50,948 |
| — |
| 44,033 |
| 62,492 |
| — |
| ||||||
Total assets |
| $ | 1,058,271 |
| $ | 735,064 |
| $ | 26,348 |
| $ | 1,076,883 |
| $ | 768,832 |
| $ | 29,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
LIABILITIES AND MEMBERS’ CAPITAL |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mortgage debt |
| $ | 659,476 |
| $ | 469,675 |
| $ | 12,968 |
| $ | 668,938 |
| $ | 470,178 |
| $ | 15,844 |
|
Intangible liabilities, net |
| 1,069 |
| 14,326 |
| — |
| 1,176 |
| 16,388 |
| — |
| ||||||
Accounts payable, accrued liabilities and deferred revenue |
| 5,920 |
| 14,739 |
| 903 |
| 7,662 |
| 15,797 |
| 1,093 |
| ||||||
Total liabilities |
| 666,465 |
| 498,740 |
| 13,871 |
| 677,776 |
| 502,363 |
| 16,937 |
| ||||||
HCP’s capital |
| 134,375 |
| 39,075 |
| 6,352 |
| 136,927 |
| 45,284 |
| 6,755 |
| ||||||
Partners’ capital |
| 257,431 |
| 197,249 |
| 6,125 |
| 262,180 |
| 221,185 |
| 6,232 |
| ||||||
Total liabilities and members’ capital |
| $ | 1,058,271 |
| $ | 735,064 |
| $ | 26,348 |
| $ | 1,076,883 |
| $ | 768,832 |
| $ | 29,924 |
|
|
|
(1) | The carrying value of investments in unconsolidated joint ventures is based on the amount we paid to purchase the joint venture interest, which is different from our capital balance as reflected at the joint venture level as the records of the unconsolidated joint venture are reflected at their historical cost. These differences in basis are generally amortized over the lives of the related assets and liabilities and included in the Company’s share of equity in earnings of the respective joint venture. |
(2) | The Company owns an 85% interest in HCP Birmingham Portfolio LLC, which owns a 30% interest in HCP Ventures III. |
(3) | Financial information is combined by primary segment of each joint venture (i.e., HCP Ventures III and HCP Ventures IV are combined under the MOB columns). |
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Investment Management Platform
In thousands
| ||||||||||||||||||
| Three Months Ended December 31, 2009 |
| Three Months Ended December 31, 2008 |
| ||||||||||||||
| Senior |
| MOB |
| Life Science |
| Senior |
| MOB |
| Life Science |
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Rental and related revenues | $ | 20,959 |
| $ | 17,311 |
| $ | 1,802 |
| $ | 20,839 |
| $ | 17,810 |
| $ | 2,354 |
|
Tenant recoveries | — |
|
| 3,733 |
|
| 355 |
|
| — |
|
| 4,197 |
|
| 277 |
| |
Total revenues | 20,959 |
|
| 21,044 |
|
| 2,157 |
|
| 20,839 |
|
| 22,007 |
|
| 2,631 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Depreciation and amortization | 6,946 |
|
| 9,463 |
|
| 546 |
|
| 7,030 |
|
| 9,438 |
|
| 2,361 |
| |
Operating | — |
|
| 7,529 |
|
| 365 |
|
| 24 |
|
| 8,429 |
|
| 319 |
| |
General and administrative | 923 |
|
| 1,024 |
|
| 23 |
|
| 1,254 |
|
| 1,066 |
|
| 5,063 |
| |
Total costs and expenses | 7,869 |
|
| 18,016 |
|
| 934 |
|
| 8,308 |
|
| 18,933 |
|
| 7,743 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other income, net | — |
|
| 31 |
|
| — |
|
| — |
|
| 17 |
|
| — |
| |
Interest expense | (9,720 | ) |
| (6,990 | ) |
| (240 | ) |
| (9,860 | ) |
| (7,001 | ) |
| (291 | ) | |
Net income (loss) | $ | 3,370 |
| $ | (3,931 | ) | $ | 983 |
| $ | 2,671 |
| $ | (3,910 | ) | $ | (5,403 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Depreciation and amortization of real estate and in-place lease intangibles | 6,946 |
|
| 9,463 |
|
| 546 |
|
| 7,030 |
|
| 9,438 |
|
| 2,361 |
| |
FFO | $ | 10,316 |
| $ | 5,532 |
| $ | 1,529 |
| $ | 9,701 |
| $ | 5,528 |
| $ | (3,042 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
HCP’s pro rata share of FFO | $ | 3,611 |
| $ | 1,247 |
| $ | 858 |
| $ | 3,395 |
| $ | 1,225 |
| $ | (1,994 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Selected supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Amortization of above and below market lease intangibles, net | $ | 728 |
| $ | 57 |
| $ | — |
| $ | 713 |
| $ | 124 |
| $ | — |
|
Amortization of debt premiums, discounts and issuance costs, net | 171 |
|
| 189 |
|
| 8 |
|
| 171 |
|
| 189 |
|
| 8 |
| |
Straight-line rents | (5,672 | ) |
| (407 | ) |
| (8 | ) |
| (3,129 | ) |
| (393 | ) |
| (169 | ) | |
Lease commissions and tenant and capital improvements | (557 | ) |
| (2,432 | ) |
| (237 | ) |
| (2,819 | ) |
| (2,545 | ) |
| 33 |
|
| Year Ended December 31, 2009 |
| Year Ended December 31, 2008 |
| ||||||||||||||
| Senior |
| MOB |
| Life Science |
| Senior |
| MOB |
| Life Science |
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related revenues | $ | 83,510 |
| $ | 70,663 |
| $ | 7,333 |
| $ | 83,421 |
| $ | 71,553 |
| $ | 8,518 |
|
Tenant recoveries |
| — |
|
| 17,517 |
|
| 1,191 |
|
| — |
|
| 16,540 |
|
| 1,557 |
|
Total revenues |
| 83,510 |
|
| 88,180 |
|
| 8,524 |
|
| 83,421 |
|
| 88,093 |
|
| 10,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| 28,038 |
|
| 38,034 |
|
| 3,787 |
|
| 28,454 |
|
| 32,538 |
|
| 4,069 |
|
Operating |
| 7 |
|
| 33,596 |
|
| 1,527 |
|
| 28 |
|
| 33,543 |
|
| 1,719 |
|
General and administrative |
| 4,682 |
|
| 4,288 |
|
| 139 |
|
| 5,571 |
|
| 4,200 |
|
| 5,114 |
|
Total costs and expenses |
| 32,727 |
|
| 75,918 |
|
| 5,453 |
|
| 34,053 |
|
| 70,281 |
|
| 10,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
| 1 |
|
| 211 |
|
| — |
|
| 58 |
|
| 193 |
|
| 12 |
|
Interest expense |
| (38,778 | ) |
| (27,734 | ) |
| (1,032 | ) |
| (39,489 | ) |
| (27,927 | ) |
| (1,251 | ) |
Net income (loss) | $ | 12,006 |
| $ | (15,261 | ) | $ | 2,039 |
| $ | 9,937 |
| $ | (9,922 | ) | $ | (2,066 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of real estate and in-place lease intangibles |
| 28,038 |
|
| 38,034 |
|
| 3,787 |
|
| 28,454 |
|
| 32,538 |
|
| 4,069 |
|
FFO | $ | 40,044 |
| $ | 22,773 |
| $ | 5,826 |
| $ | 38,391 |
| $ | 22,616 |
| $ | 2,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCP’s pro rata share of FFO | $ | 14,015 |
| $ | 5,114 |
| $ | 3,269 |
| $ | 13,437 |
| $ | 5,061 |
| $ | 893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of above and below market lease intangibles, net | $ | 3,137 |
| $ | 339 |
| $ | — |
| $ | 2,853 |
| $ | 586 |
| $ | — |
|
Amortization of debt premiums, discounts and issuance costs, net |
| 685 |
|
| 758 |
|
| 32 |
|
| 747 |
|
| 758 |
|
| 39 |
|
Straight-line rents |
| (13,221 | ) |
| (2,172 | ) |
| (71 | ) |
| (12,513 | ) |
| (2,773 | ) |
| (24 | ) |
Lease commissions and tenant and capital improvements |
| (1,957 | ) |
| (5,943 | ) |
| (749 | ) |
| (2,819 | ) |
| (7,270 | ) |
| (677 | ) |
(1) Financial information is combined by primary segment of each joint venture (i.e., HCP Ventures III and HCP Ventures IV are combined under the MOB columns).
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Investment Management Platform
In thousands
| ||||||||||||||||||
| Three Months Ended December 31, 2009 |
| Three Months Ended December 31, 2008 |
| ||||||||||||||
| Senior |
| MOB |
| Life Science |
| Senior |
| MOB |
| Life Science |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) | $ | 3,370 |
| $ | (3,931 | ) | $ | 983 |
| $ | 2,671 |
| $ | (3,910 | ) | $ | (5,403 | ) |
Depreciation and amortization |
| 6,946 |
|
| 9,463 |
|
| 546 |
|
| 7,030 |
|
| 9,438 |
|
| 2,361 |
|
General and administrative |
| 923 |
|
| 1,024 |
|
| 23 |
|
| 1,254 |
|
| 1,066 |
|
| 5,063 |
|
Other income, net |
| — |
|
| (31 | ) |
| — |
|
| — |
|
| (17 | ) |
| — |
|
Interest expense |
| 9,720 |
|
| 6,990 |
|
| 240 |
|
| 9,860 |
|
| 7,001 |
|
| 291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI | $ | 20,959 |
| $ | 13,515 |
| $ | 1,792 |
| $ | 20,815 |
| $ | 13,578 |
| $ | 2,312 |
|
Straight-line rents |
| (5,672 | ) |
| (407 | ) |
| (8 | ) |
| (3,129 | ) |
| (393 | ) |
| (169 | ) |
Amortization of above (below) market lease intangibles, net |
| 728 |
|
| 57 |
|
| — |
|
| 713 |
|
| 124 |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOI | $ | 16,015 |
| $ | 13,165 |
| $ | 1,784 |
| $ | 18,399 |
| $ | 13,309 |
| $ | 2,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCP’s pro rata share of NOI | $ | 7,336 |
| $ | 3,011 |
| $ | 1,007 |
| $ | 7,285 |
| $ | 3,002 |
| $ | 1,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCP’s pro rata share of adjusted NOI | $ | 5,605 |
| $ | 2,916 |
| $ | 1,002 |
| $ | 6,440 |
| $ | 2,925 |
| $ | 1,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Year Ended December 31, 2009 |
| Year Ended December 31, 2008 |
| ||||||||||||||
| Senior |
|
|
|
|
| Senior |
|
|
|
|
| ||||||
| Housing |
| MOB |
| Life Science |
| Housing |
| MOB |
| Life Science |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) | $ | 12,006 |
| $ | (15,261 | ) | $ | 2,039 |
| $ | 9,937 |
| $ | (9,922 | ) | $ | (2,066 | ) |
Depreciation and amortization |
| 28,038 |
|
| 38,034 |
|
| 3,787 |
|
| 28,454 |
|
| 32,538 |
|
| 4,069 |
|
General and administrative |
| 4,682 |
|
| 4,288 |
|
| 139 |
|
| 5,571 |
|
| 4,200 |
|
| 5,114 |
|
Other income, net |
| (1 | ) |
| (211 | ) |
| — |
|
| (58 | ) |
| (193 | ) |
| (12 | ) |
Interest expense |
| 38,778 |
|
| 27,734 |
|
| 1,032 |
|
| 39,489 |
|
| 27,927 |
|
| 1,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI | $ | 83,503 |
| $ | 54,584 |
| $ | 6,997 |
| $ | 83,393 |
| $ | 54,550 |
| $ | 8,356 |
|
Straight-line rents |
| (13,221 | ) |
| (2,172 | ) |
| (71 | ) |
| (12,513 | ) |
| (2,773 | ) |
| (24 | ) |
Amortization of above (below) market lease intangibles, net |
| 3,137 |
|
| 339 |
|
| — |
|
| 2,853 |
|
| 586 |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOI | $ | 73,419 |
| $ | 52,751 |
| $ | 6,926 |
| $ | 73,733 |
| $ | 52,363 |
| $ | 8,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCP’s pro rata share of NOI | $ | 29,226 |
| $ | 12,133 |
| $ | 3,944 |
| $ | 29,188 |
| $ | 12,104 |
| $ | 4,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCP’s pro rata share of adjusted NOI | $ | 25,697 |
| $ | 11,681 |
| $ | 3,904 |
| $ | 25,807 |
| $ | 11,574 |
| $ | 4,819 |
|
(1) Financial information is combined by primary segment of each joint venture (i.e., HCP Ventures III and HCP Ventures IV are combined under the MOB columns).
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
Investment Management Platform
As of and for the year ended December 31, 2009, dollars and square feet in thousands
|
| Property |
|
|
|
|
|
| Average |
|
|
|
|
| EBITDAR |
| EBITDARM | |||||||
HCP Ventures II(1) |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Units |
| Occupancy%(2)(3) |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Assisted living |
| 2 |
| $ | 11,077 |
| $ | 912 |
| 13 |
| 111 |
| 88.2 |
| $ | 660 |
| 0.75 x |
| $ | 872 |
| 0.98 x |
Independent living |
| 20 |
|
| 980,358 |
|
| 73,986 |
| 20 |
| 5,057 |
| 91.5 |
| 65,571 |
| 0.90 x |
| 73,633 |
| 1.01 x | ||
CCRCs |
| 3 |
|
| 107,941 |
|
| 8,605 |
| 14 |
| 448 |
| 91.9 |
| 6,580 |
| 0.78 x |
| 7,734 |
| 0.92 x | ||
|
| 25 |
| $ | 1,099,376 |
| $ | 83,503 |
| 19 |
| 5,616 |
| 91.5 |
| $ 72,811 |
| 0.89 x |
| $ 82,239 |
| 1.00 x | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Property |
|
|
|
|
|
| Average |
| Square |
|
|
|
|
|
|
|
|
|
|
|
| |
HCP Ventures III |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Feet |
| Occupancy%(2) |
|
|
|
|
|
|
|
|
|
| ||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On-Campus |
| 9 |
| $ | 108,990 |
| $ | 9,356 |
| 9 |
| 619 |
| 100.0 |
|
|
|
|
|
|
|
|
|
|
Off-Campus |
| 4 |
|
| 32,694 |
|
| 2,817 |
| 8 |
| 183 |
| 95.3 |
|
|
|
|
|
|
|
|
|
|
|
| 13 |
| $ | 141,684 |
| $ | 12,173 |
| 9 |
| 802 |
| 98.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Property |
|
|
|
|
|
| Average |
| Square |
|
|
|
|
|
|
|
|
|
|
|
| |
HCP Ventures IV |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Feet |
| Occupancy%(2)(4) |
|
|
|
|
|
|
|
|
|
| ||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On-Campus |
| 23 |
| $ | 229,023 |
| $ | 13,265 |
| 20 |
| 1,207 |
| 78.9 |
|
|
|
|
|
|
|
|
|
|
Off-Campus |
| 31 |
|
| 349,053 |
|
| 22,895 |
| 18 |
| 1,478 |
| 85.4 |
|
|
|
|
|
|
|
|
|
|
Hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTACH |
| 1 |
|
| 12,193 |
|
| 836 |
| 3 |
| N/A |
| N/A |
|
|
|
|
|
|
|
|
|
|
Rehab |
| 1 |
|
| 13,965 |
|
| 626 |
| 3 |
| N/A |
| 51.1 |
|
|
|
|
|
|
|
|
|
|
Specialty |
| 2 |
|
| 55,224 |
|
| 4,789 |
| 5 |
| N/A |
| N/A |
|
|
|
|
|
|
|
|
|
|
|
| 58 |
| $ | 659,458 |
| $ | 42,411 |
| 18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Property |
|
|
|
|
|
| Average |
| Square |
|
|
|
|
|
|
|
|
|
|
|
| |
HCP Life Science |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Feet |
| Occupancy%(2) |
|
|
|
|
|
|
|
|
|
| ||
San Francisco |
| 2 |
| $ | 40,562 |
| $ | 4,127 |
| 12 |
| 147 |
| 100.0 |
|
|
|
|
|
|
|
|
|
|
San Diego |
| 2 |
|
| 40,495 |
|
| 2,870 |
| 14 |
| 131 |
| 96.8 |
|
|
|
|
|
|
|
|
|
|
|
| 4 |
| $ | 81,057 |
| $ | 6,997 |
| 13 |
| 278 |
| 98.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| 100 |
| $ 1,981,575 |
| $ | 145,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) All facilities are operated by Horizon Bay Senior Communities.
(2) For MOBs and life science facilities, occupancy are presented as of the end of the period reported. For senior housing, occupancy represents the facilities’ average operating occupancy for the trailing twelve months and are one quarter in arrears from the period reported.
(3) At December 31, 2009, the average three-month occupancy for senior housing facilities was 90.0%. These occupancy percentages are one quarter in arrears from the period presented.
(4) Certain operators in the Investment Management Platform hospital portfolio are not required under their respective leases to provide operational data.
See Reporting Definitions and Reconciliations of Non-GAAP Measures | |
|
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 |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Adjusted EBITDA |
| $ | 247,674 |
| $ | 232,475 |
| $ | 948,820 |
| $ | 983,291 |
|
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 72,845 |
| 83,903 |
| 298,897 |
| 348,390 |
| ||||
Discontinued operations |
| — |
| 190 |
| 1 |
| 923 |
| ||||
HCP’s share of interest expense from the Investment Management Platform |
| 5,084 |
| 5,165 |
| 20,286 |
| 20,705 |
| ||||
Capitalized interest |
| 6,923 |
| 5,011 |
| 25,917 |
| 27,490 |
| ||||
Preferred stock dividends |
| 5,282 |
| 5,282 |
| 21,130 |
| 21,130 |
| ||||
Fixed charges |
| $ | 90,134 |
| $ | 99,551 |
| $ | 366,231 |
| $ | 418,638 |
|
|
|
|
|
|
|
|
|
|
| ||||
Adjusted fixed charge coverage |
| 2.7 x |
| 2.3 x |
| 2.6 x |
| 2.3 x |
|
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 Debt Investment 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.
Assisted 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.
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 Debt. The carrying amount of bank line of credit, bridge and term loans (if applicable), senior unsecured notes, mortgage and other secured 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 and other secured debt secured by real estate excluding debt on assets held for sale 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 Investments. Loans secured by a direct interest in real estate and mezzanine loans.
Debt Service. The periodic payment of interest expense and principal amortization on secured loans.
| |
|
Reporting Definitions and Reconciliations of Non-GAAP Measures
Debt Service Coverage (“DSC”). Facility EBITDA(R) or Facility EBITDA(R)M 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 EBITDA(R) or Facility EBITDA(R)M. 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.
Estimated Completion Date. For development projects, management’s estimate of the date the core and shell structure improvements are expected to be or have been completed. For redevelopment projects, management’s estimate of the time in which major construction activity in relation to the scope of the project has been substantially completed.
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 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, litigation provision 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. 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 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. 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. 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 income (loss):
In thousands |
|
| ||||||||||
| Three Months Ended |
| Year Ended |
| ||||||||
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
| ||||
Net income (loss) | $ | 35,484 |
| $ | 45,219 |
| $ | 146,151 |
| $ | 470,983 |
|
Interest expense: |
|
|
|
|
|
|
|
| ||||
Continuing operations | 72,845 |
| 83,903 |
| 298,897 |
| 348,390 |
| ||||
Discontinued operations | — |
| 190 |
| 1 |
| 923 |
| ||||
Income tax (expense) benefit: |
|
|
|
|
|
|
|
| ||||
Continuing operations | 518 |
| (521 | ) | 1,924 |
| 4,248 |
| ||||
Discontinued operations | — |
| (118 | ) | 157 |
| (411 | ) | ||||
Depreciation and amortization of real estate, in-place lease and other intangibles: |
|
|
|
|
|
|
|
| ||||
Continuing operations | 77,472 |
| 81,037 |
| 319,583 |
| 313,404 |
| ||||
Discontinued operations | 69 |
| 447 |
| 542 |
| 7,832 |
| ||||
Equity (income) loss from unconsolidated joint ventures | (1,518 | ) | 410 |
| (3,511 | ) | (3,326 | ) | ||||
HCP’s share of EBITDA from the Investment Management Platform | 10,799 |
| 7,666 |
| 42,685 |
| 40,096 |
| ||||
Other joint venture adjustments | 484 |
| 610 |
| 2,225 |
| 2,490 |
| ||||
EBITDA | $ | 196,153 |
| $ | 218,843 |
| $ | 808,654 |
| $ | 1,184,629 |
|
|
|
|
|
|
|
|
|
| ||||
Impairments of real estate and intangible assets, net | 54,485 |
| 14,026 |
| 75,514 |
| 27,451 |
| ||||
Impairment of unconsolidated joint venture investments | — |
| 400 |
| — |
| 400 |
| ||||
Litigation provision | — |
| — |
| 101,973 |
| — |
| ||||
Gain on sales of real estate | (2,964 | ) | (794 | ) | (37,321 | ) | (229,189 | ) | ||||
Adjusted EBITDA | $ | 247,674 |
| $ | 232,475 |
| $ | 948,820 |
| $ | 983,291 |
|
|
|
|
|
|
|
|
|
|
| |
|
Reporting Definitions and Reconciliations of Non-GAAP Measures
Facility EBITDA(R) (“EBITDA(R)”). Earnings before interest, taxes, depreciation, amortization and rent for a particular facility accruing to the operator/tenant of the property (not the Company), for the trailing twelve months and one quarter in arrears from the date presented. The Company uses Facility EBITDA(R) in determining Cash Flow Coverage and Debt Service Coverage. Facility EBITDA(R) has limitations as an analytical tool. Facility EBITDA(R) does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDA(R) 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 EBITDA(R) as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company. Facility EBITDA(R) 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 EBITDA(R)M (“EBITDA(R)M”). 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), for the trailing twelve months and one quarter in arrears from the date presented. The Company uses Facility EBITDA(R)M in determining Cash Flow Coverage and Debt Service Coverage. Facility EBITDA(R)M has limitations as an analytical tool. Facility EBITDA(R)M does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDA(R)M 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 EBITDA(R)M 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.
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 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. 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.
| |
|
Reporting Definitions and Reconciliations of Non-GAAP Measures
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 the Company’s 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.
Investment. Represents (i) the carrying amount of real estate assets, including intangibles, after adding back accumulated depreciation and amortization, excluding assets held for sale and classified as discontinued operations and (ii) the carrying amount of DFLs and debt investments.
Investment Management Platform. Includes the following unconsolidated 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.
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 interest income, investment management fee income, depreciation and amortization, general and administrative expenses, litigation provision, impairments, other income, net, interest expense, income tax expense (benefit), equity income from unconsolidated joint ventures 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, DFL interest accretion, 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 (loss):
In thousands | Three Months Ended |
| Year Ended |
| ||||||||
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Net income (loss) | $ | 35,484 |
| $ | 45,219 |
| $ | 146,151 |
| $ | 470,983 |
|
Interest income | (36,354 | ) | (32,515 | ) | (124,146 | ) | (130,869 | ) | ||||
Investment management fee income | (1,179 | ) | (1,475 | ) | (5,312 | ) | (5,923 | ) | ||||
Depreciation and amortization | 77,472 |
| 81,037 |
| 319,583 |
| 313,404 |
| ||||
General and administrative | 16,853 |
| 17,835 |
| 78,476 |
| 73,698 |
| ||||
Litigation provision | — |
| — |
| 101,973 |
| — |
| ||||
Impairments | 54,485 |
| 12,993 |
| 75,389 |
| 18,276 |
| ||||
Other income, net | (2,704 | ) | 4,142 |
| (7,940 | ) | (25,846 | ) | ||||
Interest expense | 72,845 |
| 83,903 |
| 298,897 |
| 348,390 |
| ||||
Income tax (expense) benefit | 518 |
| (521 | ) | 1,924 |
| 4,248 |
| ||||
Equity income from unconsolidated joint ventures | (1,518 | ) | 410 |
| (3,511 | ) | (3,326 | ) | ||||
Total discontinued operations, net of taxes | (3,098 | ) | 657 |
| (39,810 | ) | (239,760 | ) | ||||
NOI | $ | 212,804 |
| $ | 211,685 |
| $ | 841,674 |
| $ | 823,275 |
|
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|
|
|
|
|
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| ||||
Straight-line rents | (7,937 | ) | (10,818 | ) | (46,688 | ) | (39,463 | ) | ||||
Interest accretion — DFLs | (2,074 | ) | (2,204 | ) | (8,057 | ) | (8,554 | ) | ||||
Amortization of above and below market lease intangibles, net | (2,123 | ) | (2,420 | ) | (14,780 | ) | (8,440 | ) | ||||
Lease termination fees | (3,079 | ) | (60 | ) | (4,905 | ) | (18,150 | ) | ||||
NOI adjustments related to discontinued operations | (7 | ) | (7 | ) | 519 |
| 322 |
| ||||
Adjusted NOI | $ | 197,584 |
| $ | 196,176 |
| $ | 767,763 |
| $ | 748,990 |
|
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Reporting Definitions and Reconciliations of Non-GAAP Measures
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 end of the period reported. For hospitals, skilled nursing facilities and senior housing facilities, occupancy represents the facilities’ average operating occupancy for the trailing twelve months and one quarter in arrears from the date reported. 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 lease-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. For the same property portfolio, occupancy for hospitals, skilled nursing facilities and senior housing facilities are presented based on the average operating occupancy for trailing three-month period one quarter in arrears from the date reported.
Owned Portfolio. Represents owned properties subject to operating leases and DFLs and debt investments, and excludes properties under development, including redevelopment, and land held for future development.
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 75 assets under 11 separate pools.
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.
Rental Revenues. Represents rental and related revenues, tenant recoveries and income from direct financing leases.
Retention Rate. The Company defines retention rate as the ratio of total square feet expiring and available for lease to total renewed square feet, excluding the square feet for tenant leases terminated for default or buy-out prior to the expiration of their lease.
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 the Company’s 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. SPP NOI excludes certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis.
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. The square footage for properties, excluding square footage for development or redevelopment 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 Debt. Consolidated Debt at Book Value plus the Company’s pro rata share of debt from the Investment Management Platform.
Total Gross Assets. Consolidated Gross Assets plus the Company’s pro rata share of total assets from the Investment Management Platform, after adding back accumulated depreciation and amortization.
The following table details the calculation of Total Gross Assets:
In thousands |
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| |||
|
| December 31, |
| December 31, |
| |||
Consolidated total assets |
| $ | 12,209,735 |
| $ | 11,849,826 |
| |
Investments in and advances to unconsolidated joint ventures |
| (267,978 | ) | (272,929 | ) | |||
Accumulated depreciation and amortization |
| 1,263,536 |
| 992,549 |
| |||
Accumulated depreciation and amortization from assets held for sale |
| — |
| 26,134 |
| |||
Consolidated gross assets |
| $ | 13,205,293 |
| $ | 12,595,580 |
| |
HCP’s share of unconsolidated total assets(1) |
| 545,539 |
| 561,397 |
| |||
HCP’s share of unconsolidated accumulated depreciation and amortization(1) |
| 57,889 |
| 46,629 |
| |||
Total gross assets |
| $ | 13,808,721 |
| $ | 13,203,606 |
| |
Total Market Capitalization. Total Debt plus Consolidated Market Equity.
Total Secured Debt. Consolidated secured debt plus the Company’s pro rata share of mortgage debt from the Investment Management Platform.
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) Reflects the Company’s pro rata share of amounts from the Investment Management Platform.
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