Exhibit 99.2
Supplemental Information
June 30, 2012
(Unaudited)
Table of Contents
Company Information | 1 |
Summary | 2 |
Funds From Operations | 3 |
Funds Available for Distribution | 4 |
Capitalization | 5 |
Credit Profile | 6-7 |
Indebtedness and Ratios | 8 |
Investments and Dispositions | 9 |
Development | 10 |
Owned Portfolio |
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Portfolio summary | 12 |
Portfolio concentrations | 13 |
Same property portfolio | 14 |
Lease expirations and debt investment maturities | 15 |
Owned Senior Housing Portfolio |
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Investments and operator concentration | 16 |
Trends | 17 |
Owned Post-Acute/Skilled Nursing Portfolio |
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Investments and operator concentration | 18 |
Trends and HCR ManorCare information | 19 |
Owned Life Science Portfolio |
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Investments, tenant concentration and trends | 20 |
Selected lease expirations and leasing activity | 21 |
Owned Medical Office Portfolio |
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Investments and trends | 22 |
Leasing activity | 23 |
Owned Hospital Portfolio |
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Investments and operator concentration | 24 |
Trends | 25 |
Investment Management Platform | 26 |
Reporting Definitions and Reconciliations of Non-GAAP Measures | 27-32 |
“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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include among other things the Company’s estimate of (i) completion dates, stabilization dates, rentable square feet and total investment for development projects in progress, and (ii) rentable square feet for land held for development. These statements are made as of the date hereof, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company and its management’s control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. These risks and uncertainties include but are not limited to: national and local economic conditions; 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 investments; 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 successfully integrate the operations of acquired companies; risks associated with the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition and continued cooperation; 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 post-acute/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 from its senior housing segment to maintain or increase their occupancy levels and revenues; 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, including changes in the federal budget resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates; 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; changes in the financial position or business strategies of HCR ManorCare; the Company’s ability and willingness to maintain its qualification as a REIT due to economic, market, legal, tax or other considerations; 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.
Company Information(1)
Board of Directors | |
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James F. Flaherty III | Michael D. McKee |
Chairman and Chief Executive Officer | Chief Executive Officer |
HCP, Inc. | Bentall Kennedy U.S., L.P. |
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Christine N. Garvey | Peter L. Rhein |
Former Global Head of Corporate | Partner, Sarlot & Rhein |
Real Estate Services, Deutsche Bank AG |
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David B. Henry | Kenneth B. Roath |
Vice Chairman, President and Chief | Chairman Emeritus, HCP, Inc. |
Executive Officer, Kimco Realty Corporation |
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Lauralee E. Martin | Joseph P. Sullivan |
Chief Operating and Financial Officer | Chairman Emeritus of the Board of Advisors |
Jones Lang LaSalle Incorporated | RAND Health |
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Senior Management | |
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James F. Flaherty III | Thomas M. Klaritch |
Chairman and | Executive Vice President |
Chief Executive Officer | Medical Office Properties |
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Jonathan M. Bergschneider | James W. Mercer |
Executive Vice President | Executive Vice President, General Counsel |
Life Science Estates | and Corporate Secretary |
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Paul F. Gallagher | Timothy M. Schoen |
Executive Vice President and | Executive Vice President and |
Chief Investment Officer | Chief Financial Officer |
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Edward J. Henning | Susan M. Tate |
Executive Vice President | Executive Vice President |
| Post-Acute and Hospitals |
Thomas D. Kirby |
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Executive Vice President | Kendall K. Young |
Acquisitions and Valuations | Executive Vice President |
| 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 Timothy M. Schoen, Executive Vice President and Chief Financial Officer at (562) 733-5309.
(1) As of July 27, 2012.
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Summary
Dollars in thousands, except per share data
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| Three Months Ended |
| Six Months Ended |
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| 2012 |
| 2011 |
| 2012 |
| 2011 |
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Revenues |
| $ | 464,439 |
| $ | 488,125 |
| $ | 923,450 |
| $ | 819,253 |
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NOI |
| 392,666 |
| 380,480 |
| 783,016 |
| 626,060 |
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Adjusted (Cash) NOI |
| 357,913 |
| 339,830 |
| 712,017 |
| 562,940 |
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YoY SPP Adjusted (Cash) NOI % Change |
| 3.1% |
| 2.6% |
| 3.9% |
| 4.7% |
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Adjusted EBITDA |
| $ | 399,116 |
| $ | 432,365 |
| $ | 790,062 |
| $ | 701,834 |
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Diluted FFO per common share |
| 0.69 |
| 0.78 |
| 1.34 |
| 1.19 |
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Diluted FFO as adjusted per common share |
| 0.69 |
| 0.77 |
| 1.36 |
| 1.35 |
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Diluted FAD per common share |
| 0.56 |
| 0.62 |
| 1.10 |
| 1.12 |
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Diluted EPS |
| 0.48 |
| 0.55 |
| 0.90 |
| 0.73 |
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Dividends declared per common share |
| 0.50 |
| 0.48 |
| 1.00 |
| 0.96 |
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FFO as adjusted payout ratio |
| 72% |
| 62% |
| 74% |
| 71% |
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FAD payout ratio |
| 89% |
| 77% |
| 91% |
| 86% |
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Financial leverage |
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| 39.5% |
| 39.9% |
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Adjusted fixed charge coverage |
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| 3.4x |
| 2.9x |
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| June 30, |
| December 31, |
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Total properties: |
| 2012 |
| 2011 |
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Senior housing |
| 314 |
| 314 |
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Post-acute/skilled nursing |
| 313 |
| 313 |
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Life science |
| 113 |
| 108 |
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Medical office |
| 251 |
| 254 |
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Hospital |
| 21 |
| 21 |
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Total |
| 1,012 |
| 1,010 |
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Portfolio Income from Assets Under Management(1) |
| Assets Under Management: $19.1 billion(2) |
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(1) Represents adjusted NOI from real estate owned by HCP, interest income from debt investments and HCP’s pro rata share of adjusted NOI from real estate owned by the Company’s Investment Management Platform, excluding assets under development and land held for development, for the six months ended June 30, 2012.
(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 held for sale and under development and land held for development, at June 30, 2012.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
Funds From Operations
Dollars and shares in thousands, except per share data
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| Three Months Ended |
| Six Months Ended |
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| 2012 |
| 2011 |
| 2012 |
| 2011 |
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Net income applicable to common shares |
| $ | 201,467 |
| $ | 222,993 |
| $ | 376,724 |
| $ | 286,939 |
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Depreciation and amortization of real estate, in-place lease and other intangibles: |
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Continuing operations |
| 87,924 |
| 89,814 |
| 176,165 |
| 180,996 |
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Discontinued operations |
| — |
| 238 |
| 35 |
| 476 |
| ||||
DFL depreciation |
| 3,142 |
| 2,633 |
| 6,192 |
| 3,005 |
| ||||
Gain on sales of real estate |
| — |
| — |
| (2,856 | ) | — |
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Gain upon consolidation of joint venture |
| — |
| 270 |
| — |
| (7,769 | ) | ||||
Equity income from unconsolidated joint ventures |
| (15,732 | ) | (14,950 | ) | (29,407 | ) | (15,748 | ) | ||||
FFO from unconsolidated joint ventures |
| 18,275 |
| 17,519 |
| 34,452 |
| 20,834 |
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Noncontrolling interests’ and participating securities’ share in earnings |
| 3,508 |
| 5,976 |
| 7,809 |
| 10,731 |
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Noncontrolling interests’ and participating securities’ share in FFO |
| (4,963 | ) | (6,582 | ) | (10,691 | ) | (11,806 | ) | ||||
FFO applicable to common shares |
| $ | 293,621 |
| $ | 317,911 |
| $ | 558,423 |
| $ | 467,658 |
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Distributions on dilutive convertible units |
| 3,127 |
| 2,964 |
| 6,249 |
| 6,018 |
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Diluted FFO applicable to common shares |
| $ | 296,748 |
| $ | 320,875 |
| $ | 564,672 |
| $ | 473,676 |
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Weighted average shares used for diluted FFO per share |
| 427,496 |
| 413,996 |
| 422,507 |
| 397,060 |
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Diluted FFO per common share |
| $ | 0.69 |
| $ | 0.78 |
| $ | 1.34 |
| $ | 1.19 |
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Dividends declared per common share |
| $ | 0.50 |
| $ | 0.48 |
| $ | 1.00 |
| $ | 0.96 |
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FFO payout ratio |
| 72.5% |
| 61.5% |
| 74.6% |
| 80.7% |
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Impact of adjustments to FFO: |
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Preferred stock redemption charge(1) |
| $ | — |
| $ | — |
| $ | 10,432 |
| $ | — |
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Merger-related items(2) |
| — |
| (5,712 | ) | — |
| 26,596 |
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| $ | — |
| $ | (5,712 | ) | $ | 10,432 |
| $ | 26,596 |
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FFO as adjusted applicable to common shares |
| $ | 293,621 |
| $ | 312,199 |
| $ | 568,855 |
| $ | 494,254 |
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Distributions on dilutive convertible units and other |
| 3,127 |
| 2,975 |
| 6,218 |
| 5,915 |
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Diluted FFO as adjusted applicable to common shares |
| $ | 296,748 |
| $ | 315,174 |
| $ | 575,073 |
| $ | 500,169 |
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Weighted average shares used for diluted FFO as adjusted per share |
| 427,496 |
| 408,985 |
| 422,507 |
| 371,004 | (3) | ||||
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Diluted FFO as adjusted per common share |
| $ | 0.69 |
| $ | 0.77 |
| $ | 1.36 |
| $ | 1.35 | (3) |
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FFO as adjusted payout ratio |
| 72.5% |
| 62.3% |
| 73.5% |
| 71.1% |
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(1) In connection with the redemption of the Company’s preferred stock, during the six months ended June 30, 2012, the Company incurred a one-time, non-cash redemption charge of $10.4 million, or $0.02 per share, related to the original issuance costs.
(2) Merger-related items for the six months ended June 30, 2011 are attributable to the HCR ManorCare Acquisition (incurred from January 1st through April 6th 2011), which include the following: (i) $26.8 million of direct transaction costs, (ii) $23.9 million of interest expense associated with the $2.4 billion senior unsecured notes offering completed on January 24, 2011, which proceeds were obtained to prefund the HCR ManorCare Acquisition, partially offset by (iii) $24.1 million of income related to gains upon the reinvestment of the Company’s debt investment in HCR ManorCare and other miscellaneous items.
(3) $0.16 per share of merger-related items attributable to the HCR ManorCare Acquisition include the following:
(i) $0.07 per share of direct transaction costs that is discussed in footnote 2(i);
(ii) ($0.07) per share of income related to gains upon the reinvestment of the Company’s debt investment in HCR ManorCare debt and other miscellaneous items that are discussed in footnote 2(iii); and
(iii) $0.16 per share of negative carry related to prefunding activities of: (a) $0.09 per share from the Company’s December 2010 46 million share common stock offering and 30 million shares from the Company’s March 2011 common stock offering (excludes 4.5 million shares sold to the underwriters upon exercise of their option to purchase additional shares), which issuances increased weighted average shares by 26 million for the six months ended June 30, 2011; and (b) $0.07 per share for additional interest expense related to the $2.4 billion senior unsecured notes offering that is discussed in footnote 2(ii). Proceeds from these offerings were used to prefund a portion of the cash consideration for the HCR ManorCare Acquisition.
See Reporting Definitions and Reconciliations of Non-GAAP Measures |
Funds Available for Distribution
Dollars and shares in thousands, except per share data
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| Three Months Ended |
| Six Months Ended |
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| 2012 |
| 2011 |
| 2012 |
| 2011 |
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FFO as adjusted applicable to common shares |
| $ | 293,621 |
| $ | 312,199 |
| $ | 568,855 |
| $ | 494,254 |
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Amortization of above and below market lease intangibles, net |
| (625 | ) | (1,187 | ) | (1,322 | ) | (2,093 | ) | ||||
Amortization of deferred compensation |
| 6,034 |
| 5,103 |
| 11,407 |
| 10,205 |
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Amortization of deferred financing costs, net |
| 3,930 |
| 3,391 |
| 8,459 |
| 6,349 |
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Straight-line rents |
| (11,860 | ) | (15,612 | ) | (21,787 | ) | (32,912 | ) | ||||
DFL accretion(1) |
| (22,017 | ) | (22,262 | ) | (47,639 | ) | (24,937 | ) | ||||
DFL depreciation |
| (3,141 | ) | (2,633 | ) | (6,191 | ) | (3,005 | ) | ||||
Deferred revenues – tenant improvement related |
| (346 | ) | (767 | ) | (833 | ) | (1,643 | ) | ||||
Deferred revenues – additional rents (SAB 104) |
| (324 | ) | (1,416 | ) | 2,002 |
| 566 |
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Leasing costs and tenant and capital improvements |
| (18,181 | ) | (11,447 | ) | (27,112 | ) | (20,940 | ) | ||||
Joint venture and other FAD adjustments(1) |
| (12,240 | ) | (13,494 | ) | (26,665 | ) | (14,347 | ) | ||||
FAD applicable to common shares |
| $ | 234,851 |
| $ | 251,875 |
| $ | 459,174 |
| $ | 411,497 |
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Distributions on convertible units |
| 1,791 |
| 2,964 |
| 3,577 |
| 2,616 |
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Diluted FAD applicable to common shares |
| $ | 236,642 |
| $ | 254,839 |
| $ | 462,751 |
| $ | 414,113 |
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Weighted average shares used for diluted FAD per share |
| 425,238 |
| 408,985 |
| 420,236 |
| 368,704 |
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Diluted FAD per common share |
| $ | 0.56 |
| $ | 0.62 |
| $ | 1.10 |
| $ | 1.12 |
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Dividends declared per common share |
| $ | 0.50 |
| $ | 0.48 |
| $ | 1.00 |
| $ | 0.96 |
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FAD payout ratio |
| 89.3% |
| 77.4% |
| 90.9% |
| 85.7% |
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(1) For the three and six months ended June 30, 2012, DFL accretion reflects an elimination of $14.8 million and $29.5 million, respectively. For both the three and six months ended June 30, 2011, DFL accretion reflects an elimination of $13.3 million. The Company’s ownership interest in HCR ManorCare OpCo is accounted for using the equity method, which requires an ongoing elimination of DFL income that is proportional to the Company’s ownership in HCR ManorCare OpCo. Further, the Company’s share of earnings from HCR ManorCare OpCo (equity income) increases for the corresponding elimination of related lease expense recognized at the HCR ManorCare OpCo level, which is presented as a non-cash joint venture FAD adjustment.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
Capitalization
Dollars and shares in thousands, except price data
Total Debt | ||||||||||
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| June 30, |
| December 31, |
| June 30, | ||||
Bank line of credit(1) |
| $ | 215,015 |
| $ | 454,000 |
| $ | — | |
Senior unsecured notes |
| 5,615,979 |
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| 5,416,063 |
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| 5,706,998 | ||
Mortgage debt |
| 1,726,944 |
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| 1,764,571 |
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| 1,780,665 | ||
Other debt |
| 84,060 |
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| 87,985 |
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| 89,466 | ||
Consolidated debt |
| 7,641,998 |
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| 7,722,619 |
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| 7,577,129 | ||
HCP’s share of unconsolidated debt(2) |
| 142,200 |
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| 143,196 |
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| 144,620 | ||
Total debt |
| $ | 7,784,198 |
| $ | 7,865,815 |
| $ | 7,721,749 | |
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Total Market Capitalization | ||||||||||
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| June 30, 2012 | ||||||||
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| Shares |
| Value |
| Total Value | ||||
Common stock (NYSE: HCP) |
| 429,402 |
| $ | 44.15 |
| $ | 18,958,098 | ||
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Convertible partnerships (DownREITs)(3) |
| 5,825 |
| 44.15 |
| 257,174 | ||||
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Total market equity |
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| $ | 19,215,272 | |||
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Consolidated debt |
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| 7,641,998 | ||||
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Total market equity and consolidated debt |
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| $ | 26,857,270 | |||
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HCP’s share of unconsolidated debt(2) |
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| 142,200 | ||||
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Total market capitalization |
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| $ | 26,999,470 |
Common Stock and Equivalents | |||||||||||
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| Weighted Average Shares |
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| Shares |
| Three Months Ended June 30, 2012 |
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| Outstanding |
| Diluted |
| Diluted |
| Diluted FFO |
| Diluted | |
|
| June 30, 2012 |
| EPS |
| FFO |
| As Adjusted |
| FAD | |
Common stock |
| 429,402 |
| 420,468 |
| 420,468 |
| 420,468 |
| 420,468 | |
Common equivalent securities: |
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Restricted stock and units |
| 1,773 |
| 270 |
| 270 |
| 270 |
| 270 | |
Dilutive impact of options |
| 933 |
| 933 |
| 933 |
| 933 |
| 933 | |
Convertible partnership units |
| 5,825 |
| — |
| 5,825 |
| 5,825 |
| 3,567 | |
Total common and equivalents |
| 437,933 |
| 421,671 |
| 427,496 |
| 427,496 |
| 425,238 | |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| Weighted Average Shares |
| ||||||
|
|
|
| Six Months Ended June 30, 2012 |
| ||||||
|
|
|
| Diluted |
| Diluted |
| Diluted FFO |
| Diluted | |
|
|
|
| EPS |
| FFO |
| As Adjusted |
| FAD | |
Common stock |
|
|
| 415,243 |
| 415,243 |
| 415,243 |
| 415,243 | |
Common equivalent securities: |
|
|
|
|
|
|
|
|
|
| |
Restricted stock and units |
|
|
| 256 |
| 256 |
| 256 |
| 256 | |
Dilutive impact of options |
|
|
| 1,167 |
| 1,167 |
| 1,167 |
| 1,167 | |
Convertible partnership units |
|
|
| — |
| 5,841 |
| 5,841 |
| 3,570 | |
Total common and equivalents |
|
|
| 416,666 |
| 422,507 |
| 422,507 |
| 420,236 | |
(1) The amount outstanding under the Company’s bank line of credit as of June 30, 2012 represents a draw of £137 million that is translated into U.S. dollars.
(2) Reflects the Company’s pro rata share of amounts in the Investment Management Platform and HCR ManorCare OpCo.
(3) Convertible partnership (DownREIT) units are exchangeable for an amount of cash approximating the then-current market value of shares of the Company’s common stock at the time of conversion or, at the Company’s election, shares of the Company’s common stock.
Credit Profile
Financial Leverage
Secured Debt Ratio
Adjusted Fixed Charge Coverage
Net Debt to Adjusted EBITDA
Credit Ratings (Senior Unsecured Debt)
|
| Pre-CNL(1) |
| 2006 |
| 2007 |
| 2008 |
| 2009 |
| 2010 |
| 2011 |
| 2012 |
Moody’s |
| Baa2 |
| Baa3 |
| Baa3 |
| Baa3 |
| Baa3 |
| Baa3 |
| Baa2 |
| Baa2 (Stable) |
Standard & Poor’s |
| BBB+ |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB (Positive) |
Fitch |
| BBB+ |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB+ |
| BBB+ (Stable) |
(1) As of and for the six months ended June 30, 2006 (12 months for adjusted fixed charge coverage). The Company completed the mergers with CNL Retirement Properties, Inc. and CNL Retirement Corp (“CNL”) on October 5, 2006, with significant prefunding activities occurring in the quarter ended September 30, 2006; therefore, the Company refers to the period ended June 30, 2006 as “Pre-CNL Acquisition.”
(2) Financial leverage, secured debt ratio and net debt to adjusted EBITDA are pro forma to exclude the temporary benefit resulting from prefunding the HCR ManorCare acquisition in December 2010.
Credit Profile
Same Property NOI Growth
Total Gross Assets
(In billions)
Liquidity(5)
(In billions)
Credit Ratings (Senior Unsecured Debt)
|
| Pre-CNL(3) |
| 2006 |
| 2007 |
| 2008 |
| 2009 |
| 2010 |
| 2011 |
| 2012 |
Moody’s |
| Baa2 |
| Baa3 |
| Baa3 |
| Baa3 |
| Baa3 |
| Baa3 |
| Baa2 |
| Baa2 (Stable) |
Standard & Poor’s |
| BBB+ |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB (Positive) |
Fitch |
| BBB+ |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB |
| BBB+ |
| BBB+ (Stable) |
(1) HCP information represents annual SPP cash NOI growth except for 2Q 2012, which is year-over-year three-month growth.
(2) Major Property Sectors information was compiled by Green Street Advisors and is available in their Commercial Property Outlook report dated June 19, 2012 (the “Green Street Report”); this information represents the average annual same property NOI growth equally weighted for each of five major property sectors: apartment, industrial, mall, office, and strip center. The Company’s definitions of SPP and NOI may not be comparable to the measures compiled in the Green Street Report, as different methodologies may be used to define or calculate inputs to the growth rates presented.
(3) As of and for the six months ended June 30, 2006. The Company completed the mergers with CNL Retirement Properties, Inc. and CNL Retirement Corp (“CNL”) on October 5, 2006, with significant prefunding activities occurring in the quarter ended September 30, 2006; therefore, the Company refers to the period ended June 30, 2006 as “Pre-CNL Acquisition.”
(4) Total gross assets and liquidity are pro forma to exclude the temporary benefit resulting from prefunding the HCR ManorCare acquisition in December 2010.
(5) Represents the availability under the Company’s bank line of credit and cash and cash equivalents (unrestricted cash).
Indebtedness and Ratios
Dollars in thousands
Debt Maturities and Scheduled Principal Repayments (Amortization) |
| ||||||||||||||||||||||||
June 30, 2012 |
| ||||||||||||||||||||||||
|
|
|
| Senior |
|
|
|
|
|
|
|
|
| HCP’s Share of |
|
|
|
|
| ||||||
|
| Bank Line |
| Unsecured |
|
|
| Mortgage |
|
|
| Consolidated |
| Unconsolidated |
|
|
|
|
| ||||||
|
| of Credit(1) |
| Notes |
| Rates(2) |
| Debt(3) |
| Rates(2) |
| Debt |
| Debt(4) |
| Rates(2) |
| Total Debt |
| ||||||
2012 (6 months) |
| $ | — |
| $ | — |
| — | % | $ | 28,148 |
| 6.02 | % | $ | 28,148 |
| $ | 1,332 |
| N/A | % | $ | 29,480 |
|
2013 |
| — |
| 550,000 |
| 5.80 |
| 367,374 |
| 6.04 |
| 917,374 |
| 3,271 |
| 7.04 |
| 920,645 |
| ||||||
2014 |
| — |
| 487,000 |
| 3.23 |
| 183,758 |
| 5.76 |
| 670,758 |
| 849 |
| N/A |
| 671,607 |
| ||||||
2015 |
| — |
| 400,000 |
| 6.64 |
| 302,102 |
| 6.02 |
| 702,102 |
| 11,347 |
| 5.82 |
| 713,449 |
| ||||||
2016 |
| 215,015 |
| 900,000 |
| 5.07 |
| 285,586 |
| 6.91 |
| 1,400,601 |
| 47,057 |
| 6.05 |
| 1,447,658 |
| ||||||
2017 |
| — |
| 750,000 |
| 6.04 |
| 512,460 |
| 6.10 |
| 1,262,460 |
| 41,376 |
| 5.86 |
| 1,303,836 |
| ||||||
2018 |
| — |
| 600,000 |
| 6.83 |
| 5,747 |
| 5.90 |
| 605,747 |
| 37,130 |
| 5.00 |
| 642,877 |
| ||||||
2019 |
| — |
| 450,000 |
| 3.95 |
| 1,184 |
| N/A |
| 451,184 |
| — |
| — |
| 451,184 |
| ||||||
2020 |
| — |
| — |
| — |
| 1,276 |
| N/A |
| 1,276 |
| — |
| — |
| 1,276 |
| ||||||
2021 |
| — |
| 1,200,000 |
| 5.53 |
| 4,242 |
| 5.58 |
| 1,204,242 |
| — |
| — |
| 1,204,242 |
| ||||||
Thereafter |
| — |
| 300,000 |
| 6.89 |
| 47,778 |
| 5.17 |
| 347,778 |
| — |
| — |
| 347,778 |
| ||||||
Subtotal |
| 215,015 |
| 5,637,000 |
|
|
| 1,739,655 |
|
|
| 7,591,670 |
| 142,362 |
|
|
| 7,734,032 |
| ||||||
Other debt(5) |
| — |
| — |
|
|
| — |
|
|
| 84,060 |
| — |
|
|
| 84,060 |
| ||||||
(Discounts) and premiums, net |
| — |
| (21,021 | ) |
|
| (12,711 | ) |
|
| (33,732 | ) | (162 | ) |
|
| (33,894 | ) | ||||||
Total debt |
| $ | 215,015 |
| $ | 5,615,979 |
|
|
| $ | 1,726,944 |
|
|
| $ | 7,641,998 |
| $ | 142,200 |
|
|
| $ | 7,784,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average interest rate |
| 2.07% |
| 5.51% |
|
|
| 6.14% |
|
|
| 5.56% |
| 5.85% |
|
|
| 5.56% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average maturity in years |
| 3.70 |
| 6.17 |
|
|
| 3.93 |
|
|
| 5.58 |
| 4.61 |
|
|
| 5.57 |
|
Ratios |
| Covenants |
| ||||||||
|
| June 30, |
| December 31, |
| The following is a summary of the financial covenants under the revolving line of credit facility at June 30, 2012. |
| ||||
|
| 2012 |
| 2011 |
|
|
|
|
|
|
|
Consolidated Debt/Consolidated Gross Assets |
| 39.4% |
| 41.0% |
|
|
|
|
|
|
|
Financial Leverage (Total Debt/Total Gross Assets) |
| 39.5% |
| 41.0% |
|
|
| Bank Line of Credit |
| ||
|
|
|
|
|
| Financial Covenants(6) |
| Requirement |
| Actual Compliance |
|
Consolidated Secured Debt/Consolidated Gross Assets |
| 8.9% |
| 9.4% |
| Leverage Ratio |
| No greater than 60% |
| 40% |
|
Secured Debt Ratio (Total Secured Debt/Total Gross Assets) |
| 9.5% |
| 10.0% |
| Secured Debt Ratio |
| No greater than 30% |
| 10% |
|
|
|
|
|
|
| Unsecured Leverage Ratio |
| No greater than 60% |
| 38% |
|
Fixed and variable rate ratios(7): |
|
|
|
|
| Fixed Charge Coverage Ratio (12 months) |
| No less than 1.50x |
| 3.12x |
|
Fixed rate Total Debt |
| 96.2% |
| 93.1% |
|
|
|
|
|
|
|
Variable rate Total Debt |
| 3.8% |
| 6.9% |
|
|
|
|
|
|
|
|
| 100.0% |
| 100.0% |
|
|
|
|
|
|
|
(1) The amount outstanding under the Company’s bank line of credit as of June 30, 2012 represents a draw of £137 million that is translated into U.S. dollars. This amount was repaid in full with proceeds from the Company’s £137 million four-year unsecured term loan which closed on July 30, 2012.
(2) Senior unsecured notes and mortgage debt weighted average effective rates relate to maturing amounts.
(3) Mortgage debt attributable to non-controlling interests at June 30, 2012 was $66 million.
(4) Includes pro-rata share of mortgage and other debt in the Company’s Investment Management Platform and HCR ManorCare OpCo. At June 30, 2012, 100% of the Company’s Investment Management Platform’s mortgage debt accrues interest at fixed rates. HCR ManorCare OpCo’s debt accrues interest at LIBOR (subject to a floor of 150bps) plus 350bps.
(5) Represents non-interest bearing life care bonds and occupancy fee deposits at certain of the Company’s senior housing facilities that have no scheduled maturities.
(6) Financial covenants for the revolving line of credit facility are calculated based on the definitions contained within the agreement and may be different than similar terms in the Company’s Consolidated Financial Statements 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.
(7) $87 million of variable-rate mortgages are presented as fixed-rate debt as the interest payments under such debt have been swapped (pay fixed and receive float).
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Investments and Dispositions
Dollars and square feet in thousands | |||||||
Investments |
| ||||||
|
| June 30, 2012 |
| ||||
Description |
| Three Months |
| Six Months |
| ||
Purchase of marketable debt securities(1) |
| $ | 214,859 |
| $ | 214,859 |
|
Acquisitions of real estate and land |
| 11,050 |
| 11,050 |
| ||
Total fundings for development, tenant and capital improvements(2) |
| 48,276 |
| 78,658 |
| ||
Construction loan commitment fundings |
| 10,817 |
| 20,757 |
| ||
Total investments |
| $ | 285,002 |
| $ | 325,324 |
|
Acquisitions of real estate and land for the six months ended June 30, 2012 |
| |||||||||||
Location |
| Date |
| Capacity |
| Property |
| Segment |
| Investment |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Durham, NC |
| May 15, 2012 |
| 115 sq. ft. |
| 1 |
| Life science |
| $ | 8,050 |
|
Slidell, LA |
| May 30, 2012 |
| 12.6 acres |
| — |
| Hospital |
| 3,000 |
| |
|
|
|
|
|
|
|
|
|
| $ | 11,050 |
|
Dispositions for the six months ended June 30, 2012 |
| |||||||||||
Location |
| Date |
| Capacity |
| Property |
| Segment |
| Investment |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
St. Louis, MO |
| February 29, 2012 |
| 44 sq. ft. |
| 1 |
| Medical office |
| $ | 6,982 |
|
(1) Senior unsecured notes of Four Seasons Health Care with an aggregate par value of £138.5 million, purchased at a discount for £136.8 million, and translated into U.S. dollars as of June 30, 2012.
(2) The three months ended June 30, 2012, includes the following: (i) $25.2 million of development, (ii) $8.3 million of first generation tenant and capital improvements, and (iii) $14.8 million of second generation tenant and capital improvements (excludes $3.4 million of leasing costs). The six months ended June 30, 2012, includes the following: (i) $44.8 million of development, (ii) $14.2 million of first generation tenant and capital improvements, and (iii) $19.7 million of second generation tenant and capital improvements (excludes $7.4 million of leasing costs).
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Development
As of June 30, 2012, dollars and square feet in thousands
|
| ||||||||||||||
Development Projects in Process |
| ||||||||||||||
|
| ||||||||||||||
|
|
|
|
|
| Estimated/ |
| Estimated |
|
|
|
|
| ||
|
|
|
|
|
| Actual |
| Rentable |
|
|
| Estimated |
| ||
|
|
|
|
|
| Completion |
| Square |
| Investment |
| Total |
| ||
Name of Project |
| Location |
| Segment |
| Date |
| Feet |
| to Date(1)(3) |
| Investment |
| ||
Development |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
2019 Stierlin Ct. |
| Mountain View, CA |
| Life science |
| 1Q 2013 |
| 70 |
| $ | 7,416 |
| $ | 22,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Redevelopment |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
1030 Massachusetts Avenue |
| Cambridge, MA |
| Life science |
| 3Q 2012 |
| 75 |
| 34,030 |
| 39,992 |
| ||
Durham Research Lab |
| Durham, NC |
| Life science |
| 3Q 2013 |
| 53 |
| 11,670 |
| 24,586 |
| ||
Carmichael |
| Durham, NC |
| Life science |
| 3Q 2013 |
| 38 |
| 3,038 |
| 16,380 |
| ||
Knoxville |
| Knoxville, TN |
| Medical office |
| 4Q 2011 |
| 19 |
| 5,128 |
| 5,640 |
| ||
Westpark Plaza |
| Plano, TX |
| Medical office |
| 1Q 2012 |
| 70 |
| 13,457 |
| 17,159 |
| ||
Innovation Drive |
| San Diego, CA |
| Medical office |
| 3Q 2012 |
| 84 |
| 27,137 |
| 33,689 |
| ||
Alaska |
| Anchorage, AK |
| Medical office |
| 3Q 2012 |
| 92 |
| 14,636 |
| 16,617 |
| ||
Conroe |
| Conroe, TX |
| Medical office |
| 4Q 2012 |
| 37 |
| 5,366 |
| 9,316 |
| ||
Folsom |
| Sacramento, CA |
| Medical office |
| 1Q 2013 |
| 92 |
| 31,230 |
| 39,251 |
| ||
Fresno |
| Fresno, CA |
| Hospital |
| 1Q 2013 |
| N/A |
| 10,799 |
| 20,554 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Total |
|
|
|
|
|
|
| $ | 163,907 |
| $ | 245,417 |
|
Land Held for Development |
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| Estimated |
|
| ||
|
|
|
|
| Gross |
| Rentable |
|
| ||
|
|
|
|
| Site |
| Square |
|
| ||
| Location |
| Segment |
| Acreage |
| Feet |
|
| ||
| So. San Francisco, CA |
| Life science |
| 50 |
| 1,666 |
|
| ||
| Carlsbad, CA |
| Life science |
| 41 |
| 690 |
|
| ||
| Poway, CA |
| Life science |
| 72 |
| 1,204 |
|
| ||
| Various |
| Various |
| 19 |
| 93 |
|
| ||
|
|
|
|
| 182 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
| Investment-to-date(2)(3) |
|
|
| $ | 390,886 |
|
|
|
| |
Projects Placed in Service |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| Date |
| Rentable |
|
|
|
|
| |
|
|
|
|
|
| Placed in |
| Square |
|
|
| Percentage |
| |
Name of Project |
| Location |
| Segment |
| Service |
| Feet |
| Investment(4) |
| Leased |
| |
Modular Labs IV |
| So. San Francisco, CA |
| Life science |
| January 2012 |
| 97 |
| $ | 56,179 |
| 28 |
|
Soledad |
| San Diego, CA |
| Life science |
| February 2012 |
| 28 |
| 13,208 |
| 100 |
| |
Knoxville(5) |
| Knoxville, TN |
| Medical office |
| June 2012 |
| 19 |
| 3,100 |
| 100 |
| |
|
|
|
|
|
|
|
| 144 |
| $ | 72,487 |
|
|
|
(1) Investment-to-date of $164 million includes the following: (i) $60 million in development costs and construction in progress, (ii) $85 million of buildings and (iii) $19 million of land.
(2) Investment-to-date of $391 million includes the following: (i) $289 million in land and (ii) $102 million in development costs and construction in progress.
(3) Development costs and construction in progress of $204 million presented on the Company’s consolidated balance sheet at June 30, 2012, include the following: (i) $60 million of costs for development projects in process; (ii) $102 million of costs for land held for development; and (iii) $42 million for tenant and other facility related improvement projects in process.
(4) Represents the investment as of the date the respective property was placed in service.
(5) Represents approximately 50% of the Knoxville facility placed in service in June 2012.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Portfolio Information
June 30, 2012
(Unaudited)
Owned Portfolio Summary
As of and for the six months ended June 30, 2012, dollars and square feet in thousands | |||||||||||||||||||||||||
| |||||||||||||||||||||||||
Portfolio Summary by Investment Product | |||||||||||||||||||||||||
| |||||||||||||||||||||||||
Leased |
| Property |
|
|
|
|
| Age |
|
|
| Occupancy |
| EBITDAR(1) |
| EBITDARM(1) | |||||||||
Properties |
| Count |
| Investment |
| NOI |
| (Years) |
| Capacity |
| % |
| Amount |
| CFC |
| Amount |
| CFC | |||||
Senior housing |
| 293 |
| $ | 5,167,649 |
| $ | 232,206 |
| 15 |
| 31,148 | Units |
| 85.3 |
| $ | 398,445 |
| 1.13 x |
| $ | 477,227 |
| 1.35 x |
Post-acute/skilled |
| 313 |
| 5,610,791 |
| 268,300 |
| 33 |
| 41,605 | Beds |
| 86.3 |
| 58,460 |
| 1.58 x |
| 78,773 |
| 2.12 x | ||||
Life science |
| 109 |
| 3,340,155 |
| 117,936 |
| 19 |
| 7,000 | Sq. Ft. |
| 89.6 |
| N/A |
| N/A |
| N/A |
| N/A | ||||
Medical office |
| 185 |
| 2,295,609 |
| 97,178 |
| 20 |
| 12,972 | Sq. Ft. |
| 91.4 |
| N/A |
| N/A |
| N/A |
| N/A | ||||
Hospital |
| 17 |
| 648,208 |
| 40,122 |
| 26 |
| 2,410 | Beds |
| 52.6 |
| 373,339 |
| 4.67 x |
| 408,748 |
| 5.12 x | ||||
|
| 917 |
| $ | 17,062,412 |
| $ | 755,742 |
| 23 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Operating |
| Property |
| Investment |
| NOI |
| Age |
| Capacity |
| Occupancy |
|
|
|
|
|
|
|
| |||||
Senior housing(2) |
| 21 |
| $ | 752,674 |
| $ | 27,274 |
| 22 |
| 5,008 | Units |
| 86.5 |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Debt |
|
|
| Investment |
| Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Senior housing |
|
|
| $ | 32,001 |
| $ | 810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Post-acute/skilled(3) |
|
|
| 224,477 |
| 707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Hospital(4) |
|
|
| 83,903 |
| 518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
| $ | 340,381 |
| $ | 2,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total |
| 938 |
| $ | 18,155,467 |
| $ | 785,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Portfolio NOI, Adjusted NOI and Interest Income |
| ||||||||||||||||||
|
| ||||||||||||||||||
|
| Three Months Ended June 30, 2012 |
| ||||||||||||||||
|
| Rental and |
|
|
|
|
|
|
|
|
| Adjusted NOI |
| ||||||
|
| RIDEA |
| Operating |
|
|
| Adjusted |
| Interest |
| and Interest |
| ||||||
Segment |
| Revenues |
| Expenses |
| NOI(5) |
| NOI |
| Income |
| Income |
| ||||||
Senior housing(2) |
| $ | 152,014 |
| $ | 23,444 |
| $ | 128,570 |
| $ | 116,509 |
| $ | 527 |
| $ | 117,036 |
|
Post-acute/skilled |
| 134,677 |
| 172 |
| 134,505 |
| 116,833 |
| 427 |
| 117,260 |
| ||||||
Life science |
| 72,545 |
| 13,555 |
| 58,990 |
| 55,735 |
| — |
| 55,735 |
| ||||||
Medical office |
| 80,905 |
| 31,979 |
| 48,926 |
| 47,682 |
| — |
| 47,682 |
| ||||||
Hospital |
| 22,612 |
| 937 |
| 21,675 |
| 21,154 |
| 262 |
| 21,416 |
| ||||||
|
| $ | 462,753 |
| $ | 70,087 |
| $ | 392,666 |
| $ | 357,913 |
| $ | 1,216 |
| $ | 359,129 |
|
|
| Six Months Ended June 30, 2012 |
| ||||||||||||||||
|
| Rental and |
|
|
|
|
|
|
|
|
| Adjusted NOI |
| ||||||
|
| RIDEA |
| Operating |
|
|
| Adjusted |
| Interest |
| and Interest |
| ||||||
Segment |
| Revenues |
| Expenses |
| NOI(5) |
| NOI |
| Income |
| Income |
| ||||||
Senior housing(2) |
| $ | 304,554 |
| $ | 45,074 |
| $ | 259,480 |
| $ | 233,527 |
| $ | 810 |
| $ | 234,337 |
|
Post-acute/skilled |
| 268,672 |
| 372 |
| 268,300 |
| 230,002 |
| 707 |
| 230,709 |
| ||||||
Life science |
| 144,375 |
| 26,439 |
| 117,936 |
| 114,838 |
| — |
| 114,838 |
| ||||||
Medical office |
| 160,861 |
| 63,683 |
| 97,178 |
| 94,604 |
| — |
| 94,604 |
| ||||||
Hospital |
| 41,990 |
| 1,868 |
| 40,122 |
| 39,046 |
| 518 |
| 39,564 |
| ||||||
|
| $ | 920,452 |
| $ | 137,436 |
| $ | 783,016 |
| $ | 712,017 |
| $ | 2,035 |
| $ | 714,052 |
|
(1) EBITDAR, EBITDARM and their respective CFC are not presented for the disaggregated HCR ManorCare senior housing and post-acute/skilled nursing portfolios as the combined portfolio is cross-collateralized under a single master lease. See HCR ManorCare Leased Portfolio Summary on page 19 of this report.
(2) Brookdale Senior Living manages 21 assets on behalf of the Company under a RIDEA structure. For the three months ended June 30, 2012, revenues and operating expenses were $35.6 million and $22.7 million, respectively. For the six months ended June 30, 2012, revenues and operating expenses were $70.7 million and $43.4 million, respectively.
(3) Includes senior unsecured notes of Four Seasons Health Care with an aggregate par value of £138.5 million, purchased at a discount for £136.8 million. The amount included above represents the carrying value translated into U.S. dollars as of June 30, 2012.
(4) Includes a senior secured loan to Delphis Operations, LP (“Delphis”) that was placed on non-accrual status effective January 1, 2011 with a carrying value of $69 million at June 30, 2012. For additional information regarding the senior secured loan to Delphis see Note 7 to the Consolidated Financial Statements for the six months ended June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q filed with the SEC.
(5) NOI attributable to non-controlling interests for the three and six months ended June 30, 2012 was $2.3 million and $4.7 million, respectively.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Portfolio Concentrations |
|
|
As of and for the six months ended June 30, 2012, dollars in thousands |
Geographic Diversification of Properties
|
| Total |
| Senior |
| Post-Acute/ |
| Life |
| Medical |
|
|
|
|
| % of |
| ||||||
Investment by State |
| Properties |
| Housing |
| Skilled |
| Science |
| Office |
| Hospital |
| Total |
| Total |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
CA |
| 153 |
| $ | 647,883 |
| $ | 268,215 |
| $ | 3,214,877 |
| $ | 214,481 |
| $ | 128,545 |
| $ | 4,474,001 |
| 25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
TX |
| 96 |
| 686,736 |
| 103,520 |
| — |
| 693,208 |
| 227,064 |
| 1,710,528 |
| 10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
FL |
| 95 |
| 832,549 |
| 537,530 |
| — |
| 155,214 |
| 62,450 |
| 1,587,743 |
| 9 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
PA |
| 54 |
| 260,852 |
| 1,192,667 |
| — |
| — |
| — |
| 1,453,519 |
| 8 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
IL |
| 51 |
| 504,005 |
| 692,025 |
| — |
| 13,481 |
| — |
| 1,209,511 |
| 7 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
OH |
| 72 |
| 214,422 |
| 674,939 |
| — |
| 9,239 |
| — |
| 898,600 |
| 5 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
MI |
| 38 |
| 176,207 |
| 570,695 |
| — |
| — |
| — |
| 746,902 |
| 4 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
MD |
| 34 |
| 300,028 |
| 228,283 |
| — |
| 29,991 |
| — |
| 558,302 |
| 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
VA |
| 29 |
| 319,964 |
| 174,154 |
| — |
| 42,730 |
| — |
| 536,848 |
| 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NJ |
| 21 |
| 377,577 |
| 98,268 |
| — |
| — |
| — |
| 475,845 |
| 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other |
| 295 |
| 1,600,100 |
| 1,070,495 |
| 125,278 |
| 1,137,265 |
| 230,149 |
| 4,163,287 |
| 23 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
| 938 |
| $ | 5,920,323 |
| $ | 5,610,791 |
| $ | 3,340,155 |
| $ | 2,295,609 |
| $ | 648,208 |
| $ | 17,815,086 |
| 100 |
|
|
| Total |
| Senior |
| Post-Acute/ |
| Life |
| Medical |
|
|
|
|
| % of |
| ||||||
NOI by State |
| Properties |
| Housing |
| Skilled |
| Science |
| Office |
| Hospital |
| Total |
| Total |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
CA |
| 153 |
| $ | 30,444 |
| $ | 12,774 |
| $ | 111,100 |
| $ | 6,430 |
| $ | 8,336 |
| $ | 169,084 |
| 22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
TX |
| 96 |
| 32,231 |
| 4,276 |
| — |
| 26,599 |
| 13,048 |
| 76,154 |
| 10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
FL |
| 95 |
| 35,966 |
| 25,087 |
| — |
| 7,163 |
| 3,925 |
| 72,141 |
| 9 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
PA |
| 54 |
| 10,608 |
| 56,917 |
| — |
| — |
| — |
| 67,525 |
| 9 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
IL |
| 51 |
| 21,286 |
| 31,880 |
| — |
| 663 |
| — |
| 53,829 |
| 7 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
OH |
| 72 |
| 9,435 |
| 33,451 |
| — |
| 317 |
| — |
| 43,203 |
| 6 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
MI |
| 38 |
| 7,995 |
| 25,895 |
| — |
| — |
| — |
| 33,890 |
| 4 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
MD |
| 34 |
| 12,809 |
| 10,788 |
| — |
| 1,339 |
| — |
| 24,936 |
| 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
VA |
| 29 |
| 11,780 |
| 8,623 |
| — |
| 1,800 |
| — |
| 22,203 |
| 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
CO |
| 26 |
| 8,551 |
| 3,838 |
| — |
| 7,981 |
| 709 |
| 21,079 |
| 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other |
| 290 |
| 78,375 |
| 54,771 |
| 6,836 |
| 44,886 |
| 14,104 |
| 198,972 |
| 24 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
| 938 |
| $ | 259,480 |
| $ | 268,300 |
| $ | 117,936 |
| $ | 97,178 |
| $ | 40,122 |
| $ | 783,016 |
| 100 |
|
Operator/Tenant Diversification
|
| Primary |
| Annualized Revenues(1) |
|
|
|
|
|
|
|
|
| |||
Company |
| Segment |
| Amount |
| % |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
HCR ManorCare |
| Post-acute/skilled |
| $ | 489,038 |
| 32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Brookdale Senior Living |
| Senior housing |
| 142,143 |
| 9 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Emeritus Corporation |
| Senior housing |
| 102,037 |
| 7 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Sunrise Senior Living |
| Senior housing |
| 86,572 |
| 6 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
HCA |
| Hospital |
| 48,671 |
| 3 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Amgen |
| Life science |
| 42,247 |
| 3 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Genentech |
| Life science |
| 38,387 |
| 3 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Four Seasons Health Care |
| Post-acute/skilled |
| 26,647 |
| 2 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Kindred |
| Post-acute/skilled |
| 16,758 |
| 1 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Capital Senior Living |
| Senior housing |
| 16,106 |
| 1 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other |
|
|
| 517,401 |
| 33 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| $ | 1,526,007 |
| 100 |
|
|
|
|
|
|
|
|
|
(1) The most recent monthly base rent (including additional rent floors), cash income from direct financing leases and/or interest income annualized for 12 months. Annualized revenues for operating properties under a RIDEA structure are based on the most recent month’s NOI annualized for 12 months. For additional details regarding “annualized revenues,” see reporting definitions.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Same Property Portfolio |
|
|
As of June 30, 2012, dollars and square feet in thousands |
Three-Month SPP |
| ||||||||||||||||||
|
|
|
| Senior |
| Post-Acute/ |
| Life |
| Medical |
|
|
| ||||||
|
| Total |
| Housing |
| Skilled |
| Science |
| Office | �� | Hospital |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Property count |
| 574 |
| 227 |
| 45 |
| 101 |
| 185 |
| 16 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment |
| $ | 10,682,297 |
| $ | 4,334,034 |
| $ | 246,711 |
| $ | 3,207,732 |
| $ | 2,285,357 |
| $ | 608,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Percent of property portfolio (by investment) |
| 60.0% |
| 73.2% |
| 4.4% |
| 96.0% |
| 99.6% |
| 93.9% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Capacity |
|
|
| 26,195 Units |
| 5,321 Beds |
| 6,685 Sq. Ft. |
| 12,921 Sq. Ft. |
| 2,379 Beds |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year-Over-Year Three-Month SPP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Occupancy: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2012 |
|
|
| 85.9% |
| 84.7% |
| 91.5% |
| 91.4% |
| 56.3% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2011 |
|
|
| 85.9% |
| 85.5% |
| 90.4% |
| 90.9% |
| 56.2% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% change |
|
|
| —% |
| (0.8% | ) | 1.1% |
| 0.5% |
| 0.1% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI % change |
| 0.1% |
| (1.5% | ) | 0.5% |
| (0.2% | ) | 2.5% |
| 3.0% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2012 |
| $ | 224,802 |
| $ | 89,442 |
| $ | 9,426 |
| $ | 56,409 |
| $ | 48,967 |
| $ | 20,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2011 |
| $ | 218,047 |
| $ | 87,620 |
| $ | 9,219 |
| $ | 53,796 |
| $ | 47,555 |
| $ | 19,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI % change |
| 3.1% |
| 2.1% |
| 2.2% |
| 4.9% |
| 3.0% |
| 3.5% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sequential Three-Month SPP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Occupancy: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2012 |
|
|
| 85.9% |
| 84.7% |
| 91.5% |
| 91.4% |
| 56.3% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
March 31, 2012 |
|
|
| 85.8% |
| 84.7% |
| 91.1% |
| 91.2% |
| 51.7% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% change |
|
|
| 0.1% |
| —% |
| 0.4% |
| 0.2% |
| 4.6% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI % change |
| 1.3% |
| (0.9% | ) | (0.4% | ) | (0.1% | ) | 1.6% |
| 18.2% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2012 |
| $ | 224,802 |
| $ | 89,442 |
| $ | 9,426 |
| $ | 56,409 |
| $ | 48,967 |
| $ | 20,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
March 31, 2012 |
| $ | 223,556 |
| $ | 88,875 |
| $ | 9,401 |
| $ | 59,851 |
| $ | 48,120 |
| $ | 17,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI % change |
| 0.6% |
| 0.6% |
| 0.3% |
| (5.8% | ) | 1.8% |
| 18.8% |
|
Year-Over-Year Six-Month SPP |
| ||||||||||||||||||
|
|
|
| Senior |
| Post-Acute/ |
| Life |
| Medical |
|
|
| ||||||
|
| Total |
| Housing |
| Skilled |
| Science |
| Office |
| Hospital |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Property count |
| 569 |
| 223 |
| 45 |
| 101 |
| 184 |
| 16 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment |
| $ | 10,555,586 |
| $ | 4,239,145 |
| $ | 246,711 |
| $ | 3,207,732 |
| $ | 2,253,535 |
| $ | 608,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Percentage of property portfolio (by investment) |
| 59.3% |
| 71.6% |
| 4.4% |
| 96.0% |
| 98.2% |
| 93.9% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Capacity |
|
|
| 25,634 Units |
| 5,321 Beds |
| 6,685 Sq. Ft. |
| 12,788 Sq. Ft. |
| 2,379 Beds |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year-Over-Year Six-Month SPP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Occupancy: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2012 |
|
|
| 85.9% |
| 84.7% |
| 91.5% |
| 91.3% |
| 56.3% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2011 |
|
|
| 85.7% |
| 85.5% |
| 90.4% |
| 90.8% |
| 56.2% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% change |
|
|
| 0.2% |
| (0.8% | ) | 1.1% |
| 0.5% |
| 0.1% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NOI % change |
| (0.0% | ) | (1.5% | ) | 1.0% |
| (0.4% | ) | 1.9% |
| 3.1% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2012 |
| $ | 443,352 |
| $ | 174,571 |
| $ | 18,827 |
| $ | 116,260 |
| $ | 95,827 |
| $ | 37,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
June 30, 2011 |
| $ | 426,667 |
| $ | 171,005 |
| $ | 18,321 |
| $ | 107,765 |
| $ | 93,041 |
| $ | 36,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted NOI % change |
| 3.9% |
| 2.1% |
| 2.8% |
| 7.9% |
| 3.0% |
| 3.6% |
|
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Portfolio Lease Expirations and Debt Investment Maturities | |
|
|
|
|
At June 30, 2012, dollars and square feet in thousands |
|
|
|
| Expiration Year(1) |
| ||||||||||||||||||||||||||||||||
Segment |
| Total |
| 2012(2) |
| 2013 |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| 2018 |
| 2019 |
| 2020 |
| 2021 |
| Thereafter |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Lease Expirations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Senior housing(3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 293 |
| — |
| — |
| 5 |
| 1 |
| 17 |
| 12 |
| 49 |
| 12 |
| 33 |
| 16 |
| 148 |
| ||||||||||||
Annualized revenues |
| $ | 419,533 |
| $ | — |
| $ | — |
| $ | 4,997 |
| $ | 204 |
| $ | 24,983 |
| $ | 20,220 |
| $ | 96,310 |
| $ | 15,521 |
| $ | 51,741 |
| $ | 17,404 |
| $ | 188,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Post-acute/skilled: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 313 |
| — |
| — |
| 9 |
| 1 |
| 6 |
| 9 |
| 3 |
| 12 |
| 4 |
| — |
| 269 |
| ||||||||||||
Annualized revenues |
| $ | 467,778 |
| $ | — |
| $ | — |
| $ | 7,197 |
| $ | 439 |
| $ | 5,915 |
| $ | 8,480 |
| $ | 1,696 |
| $ | 10,071 |
| $ | 3,068 |
| $ | — |
| $ | 430,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Life science: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Square feet |
| 6,274 |
| 91 |
| 471 |
| 342 |
| 816 |
| 209 |
| 927 |
| 517 |
| 121 |
| 922 |
| 557 |
| 1,301 |
| ||||||||||||
Annualized revenues |
| $ | 229,760 |
| $ | 1,722 |
| $ | 11,528 |
| $ | 10,156 |
| $ | 25,985 |
| $ | 5,631 |
| $ | 30,069 |
| $ | 25,392 |
| $ | 4,106 |
| $ | 41,451 |
| $ | 31,501 |
| $ | 42,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Square feet |
| 11,859 |
| 973 |
| 1,847 |
| 1,641 |
| 1,406 |
| 1,202 |
| 1,022 |
| 1,026 |
| 718 |
| 842 |
| 392 |
| 790 |
| ||||||||||||
Annualized revenues |
| $ | 257,231 |
| $ | 22,875 |
| $ | 35,547 |
| $ | 37,123 |
| $ | 31,775 |
| $ | 24,807 |
| $ | 22,432 |
| $ | 20,720 |
| $ | 14,992 |
| $ | 19,520 |
| $ | 9,776 |
| $ | 17,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Properties |
| 17 |
| — |
| 1 |
| 3 |
| — |
| — |
| 2 |
| — |
| 5 |
| — |
| 1 |
| 5 |
| ||||||||||||
Annualized revenues |
| $ | 67,366 |
| $ | — |
| $ | 2,611 |
| $ | 16,018 |
| $ | — |
| $ | — |
| $ | 4,706 |
| $ | — |
| $ | 6,970 |
| $ | — |
| $ | 1,650 |
| $ | 35,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total annualized revenues |
| $ | 1,441,668 |
| $ | 24,597 |
| $ | 49,686 |
| $ | 75,491 |
| $ | 58,403 |
| $ | 61,336 |
| $ | 85,907 |
| $ | 144,118 |
| $ | 51,660 |
| $ | 115,780 |
| $ | 60,331 |
| $ | 714,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
% of Total |
| 100 |
| 2 |
| 3 |
| 5 |
| 4 |
| 4 |
| 6 |
| 10 |
| 4 |
| 8 |
| 4 |
| 50 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Debt Investment Maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Senior housing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 2,535 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 2,253 |
| $ | 282 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Post-acute/skilled: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 27,745 |
| $ | — |
| $ | 932 |
| $ | 166 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 26,647 |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Hospital(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Annualized revenues |
| $ | 1,052 |
| $ | — |
| $ | — |
| $ | — |
| $ | 1,052 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total annualized revenues |
| $ | 31,332 |
| $ | — |
| $ | 932 |
| $ | 166 |
| $ | 1,052 |
| $ | 2,253 |
| $ | 282 |
| $ | — |
| $ | — |
| $ | 26,647 |
| $ | — |
| $ | — |
|
|
|
|
(1) The most recent monthly base rent (including additional rent floors), cash income from direct financing leases and/or interest income annualized for 12 months. For additional details regarding “annualized revenues,” see reporting definitions.
(2) Includes month-to-month and holdover leases.
(3) Excludes $53.0 million related to 21 facilities operated under a RIDEA structure by Brookdale Senior Living.
(4) Effective January 1, 2011, a senior secured loan to Delphis was placed on non-accrual status. During the six months ended June 30, 2012, no revenues were recognized for this loan; consequently, no annualized revenue amounts for this loan are presented. For additional information regarding the senior secured loan to Delphis see Note 7 to the Consolidated Financial Statements for the quarter ended June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q filed with the SEC.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
Owned Senior Housing Portfolio
As of and for the six months ended June 30, 2012, dollars in thousands | ||||||||||||||||||||||||
| ||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||
| ||||||||||||||||||||||||
Operating |
| Property |
|
|
|
|
| Average |
|
|
| Occupancy |
| EBITDAR |
| EBITDARM | ||||||||
Leases |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Units |
| % |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Assisted living |
| 162 |
| $ | 2,477,861 |
| $ | 113,957 |
| 14 |
| 14,615 |
| 85.2 |
| $ | 225,575 |
| 1.12 x |
| $ | 269,087 |
| 1.34 x |
Independent living |
| 26 |
| 626,125 |
| 30,644 |
| 22 |
| 4,662 |
| 85.5 |
| 59,197 |
| 1.05 x |
| 67,745 |
| 1.20 x | ||||
CCRCs |
| 12 |
| 607,925 |
| 27,708 |
| 23 |
| 3,779 |
| 88.1 |
| 63,644 |
| 1.17 x |
| 77,092 |
| 1.41 x | ||||
|
| 200 |
| $ | 3,711,911 |
| $ | 172,309 |
| 15 |
| 23,056 |
| 85.7 |
| $ | 348,416 |
| 1.12 x |
| $ | 413,924 |
| 1.33 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Direct Financing |
| Property |
|
|
|
|
| Average |
|
|
| Occupancy |
| EBITDAR(1) |
| EBITDARM(1) | ||||||||
Leases |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Units |
| % |
| Amount |
| CFC |
| Amount |
| CFC | ||||
Assisted living |
| 27 |
| $ | 622,123 |
| $ | 24,725 |
| 15 |
| 3,139 |
| 85.6 |
| $ | 50,029 |
| 1.21 x |
| $ | 63,303 |
| 1.53 x |
HCR ManorCare(1) |
| 66 |
| 833,615 |
| 35,172 |
| 16 |
| 4,953 |
| 82.9 |
| N/A |
| N/A |
| N/A |
| N/A | ||||
|
| 93 |
| $ | 1,455,738 |
| $ | 59,897 |
| 16 |
| 8,092 |
| 84.0 |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Leased Properties |
| 293 |
| $ | 5,167,649 |
| $ | 232,206 |
| 15 |
| 31,148 |
| 85.3 |
| $ | 398,445 |
| 1.13 x |
| $ | 477,227 |
| 1.35 x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating |
| Property |
| Investment |
| NOI |
| Average |
| Units |
| Occupancy |
|
|
|
|
|
|
|
| ||||
Assisted living |
| 3 |
| $ | 23,566 |
| $ | 1,245 |
| 22 |
| 213 |
| 83.5 |
|
|
|
|
|
|
|
| ||
Independent living |
| 18 |
| 729,108 |
| 26,029 |
| 22 |
| 4,795 |
| 86.7 |
|
|
|
|
|
|
|
| ||||
|
| 21 |
| $ | 752,674 |
| $ | 27,274 |
| 22 |
| 5,008 |
| 86.5 |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Debt |
|
|
| Investment |
| Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Assisted living(2) |
|
|
| $ | 32,001 |
| $ | 810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| 314 |
| $ | 5,952,324 |
| $ | 260,290 |
|
|
| 36,156 |
| 85.4 |
|
|
|
|
|
|
|
|
Operator Concentration(3)
|
|
|
|
|
|
|
|
|
| NOI and |
|
|
|
|
|
|
|
|
| ||||
|
| Properties |
| Investment |
| Interest Income |
|
|
| Occupancy |
| EBITDAR |
| EBITDARM |
| ||||||||
Operator |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Units |
| % |
| CFC(1) |
| CFC(1) |
| ||
Brookdale Senior Living(4) |
| 59 |
| 61 |
| $ | 1,682,356 |
| 28 |
| $ | 74,907 |
| 29 |
| 11,607 |
| 87.6 |
| 1.23 x |
| 1.46 x |
|
Sunrise Senior Living(5) |
| 48 |
| 98 |
| 1,322,176 |
| 22 |
| 46,945 |
| 18 |
| 5,566 |
| 87.0 |
| 1.19 x |
| 1.46 x |
| ||
Emeritus Corporation |
| 69 |
| 96 |
| 1,142,811 |
| 19 |
| 62,492 |
| 24 |
| 7,741 |
| 84.1 |
| 1.15 x |
| 1.36 x |
| ||
HCR ManorCare(1) |
| 66 |
| 100 |
| 833,615 |
| 14 |
| 35,172 |
| 14 |
| 4,953 |
| 82.9 |
| N/A |
| N/A |
| ||
Harbor Retirement Associates |
| 14 |
| 100 |
| 211,103 |
| 4 |
| 8,090 |
| 3 |
| 1,346 |
| 85.3 |
| 0.99 x |
| 1.25 x |
| ||
Aegis Senior Living |
| 10 |
| 80 |
| 182,152 |
| 3 |
| 7,871 |
| 3 |
| 701 |
| 87.1 |
| 1.02 x |
| 1.20 x |
| ||
Other |
| 48 |
| 94 |
| 578,111 |
| 10 |
| 24,813 |
| 9 |
| 4,242 |
| 85.6 |
| 0.99 x |
| 1.16 x |
| ||
|
| 314 |
| 90 |
| $ | 5,952,324 |
| 100 |
| $ | 260,290 |
| 100 |
| 36,156 |
| 85.4 |
| 1.13 x |
| 1.35 x |
|
(1) EBITDAR, EBITDARM and their respective CFC are not presented for the disaggregated HCR ManorCare senior housing and post-acute/skilled nursing portfolios as the combined portfolio is cross-collateralized under a single master lease. See HCR ManorCare Leased Portfolio Summary on page 19 of this report.
(2) During the quarter ended June 30, 2012, the Company funded $10.8 million related to construction financing commitments totaling $119 million to build six Class A assisted living facilities. For each of these facilities, the Company holds a one-time purchase option upon the earlier of stabilized occupancy or the fourth anniversary of the loan closing.
(3) Property count, units, occupancy and CFCs are presented for leased and operating properties, if applicable, and exclude debt investments.
(4) Occupancy for 35 assets (formerly operated by Horizon Bay Retirement Living prior to September 2011) and the CFC for 14 of these 35 assets are reported in “other” until the requisite periods have elapsed to allow the Company to report such measures completely under the new operator. CFC for the remaining 21 assets operated under a RIDEA structure is excluded as CFC is not applicable.
(5) Sunrise Senior Living’s percentage pooled consists of 47 assets under 6 separate pools.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Senior Housing Portfolio
Dollars in thousands |
Portfolio Trends |
|
| Same Property Leased Portfolio |
|
| Total Property Portfolio(1) |
| ||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the |
|
| As of and for the Twelve Months Ended |
| ||||||||||||||||||
|
| 06/30/12 |
| 03/31/12 |
| 06/30/11 |
| 06/30/12 |
| 06/30/11 |
|
| 06/30/12 |
| 03/31/12(2) |
| 06/30/11(2) |
| ||||||||
Property count |
| 227 |
| 227 |
| 227 |
| 223 |
| 223 |
|
| 314 |
| 314 |
| 317 |
| ||||||||
Investment |
| $ | 4,334,034 |
| $ | 4,326,485 |
| $ | 4,313,400 |
| $ | 4,239,145 |
| $ | 4,218,510 |
|
| $ | 5,920,323 |
| $ | 5,906,471 |
| $ | 5,899,283 |
|
Units |
| 26,195 |
| 26,191 |
| 26,177 |
| 25,634 |
| 25,626 |
|
| 36,156 |
| 36,154 |
| 36,424 |
| ||||||||
3-Month Occupancy % |
| 85.9 |
| 85.8 |
| 85.9 |
| 85.9 |
| 85.7 |
|
| 85.5 |
| 85.8 |
| 85.9 |
| ||||||||
12-Month Occupancy % |
| 85.7 |
| 85.7 |
| 86.3 |
| 85.5 |
| 86.1 |
|
| 85.6 |
| 85.7 |
| 86.3 |
| ||||||||
EBITDAR |
| $ | 398,445 |
| $ | 399,773 |
| $ | 381,890 |
| $ | 389,688 |
| $ | 373,127 |
|
| $ | 398,445 |
| $ | 399,773 |
| $ | 395,939 |
|
EBITDAR CFC |
| 1.13 x |
| 1.14 x |
| 1.17 x |
| 1.13 x |
| 1.18 x |
|
| 1.13 x |
| 1.14 x |
| 1.18 x |
| ||||||||
EBITDARM |
| $ | 477,227 |
| $ | 475,716 |
| $ | 457,759 |
| $ | 466,947 |
| $ | 457,578 |
|
| $ | 477,227 |
| $ | 475,716 |
| $ | 473,821 |
|
EBITDARM CFC |
| 1.35 x |
| 1.36 x |
| 1.40 x |
| 1.36 x |
| 1.41 x |
|
| 1.35 x |
| 1.36 x |
| 1.41 x |
| ||||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental and related revenues |
| $ | 86,587 |
| $ | 87,253 |
| $ | 86,790 |
| $ | 169,591 |
| $ | 170,710 |
|
|
|
|
|
|
|
| |||
DFL income |
| 12,181 |
| 12,580 |
| 13,499 |
| 24,761 |
| 26,893 |
|
|
|
|
|
|
|
| ||||||||
Operating expenses |
| (42 | ) | (241 | ) | (100 | ) | (279 | ) | (611 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 98,726 |
| $ | 99,592 |
| $ | 100,189 |
| $ | 194,073 |
| $ | 196,992 |
|
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Straight-line rents |
| (7,027 | ) | (8,147 | ) | (9,590 | ) | (14,675 | ) | (19,701 | ) |
|
|
|
|
|
|
| ||||||||
Below market lease intangibles, net |
| (631 | ) | (631 | ) | (631 | ) | (1,262 | ) | (1,262 | ) |
|
|
|
|
|
|
| ||||||||
DFL interest accretion |
| (1,626 | ) | (1,939 | ) | (2,348 | ) | (3,565 | ) | (5,024 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 89,442 |
| $ | 88,875 |
| $ | 87,620 |
| $ | 174,571 |
| $ | 171,005 |
|
|
|
|
|
|
|
|
(1) EBITDAR, EBITDARM and their respective CFC are not presented for the disaggregated HCR ManorCare senior housing and post-acute/skilled nursing portfolios as the combined portfolio is cross-collateralized under a single master lease. See HCR ManorCare Leased Portfolio Summary on page 19 of this report. Additionally, EBITDAR, EBITDARM and their respective CFC are not presented for the 21 properties operated under a RIDEA structure.
(2) Amounts are presented without giving effect to discontinued operations.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Post-Acute/Skilled Nursing Portfolio
As of and for the six months ended June 30, 2012, dollars in thousands |
|
Investments |
|
|
|
|
|
|
|
| Average |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Leased |
| Property |
|
|
|
|
| Age |
|
|
| Occupancy |
| EBITDAR |
| EBITDARM |
| ||||||||
Properties |
| Count |
| Investment |
| NOI |
| (Years) |
| Beds |
| % |
| Amount |
| CFC |
| Amount |
| CFC |
| ||||
Operating leases |
| 45 |
| $ | 246,711 |
| $ | 19,089 |
| 27 |
| 5,321 |
| 84.8 |
| $ | 58,460 |
| 1.58 x |
| $ | 78,773 |
| 2.12 x |
|
HCR ManorCare DFLs(1) |
| 268 |
| 5,364,080 |
| 249,211 |
| 34 |
| 36,284 |
| 86.5 |
| N/A |
| N/A |
| N/A |
| N/A |
| ||||
Leased properties |
| 313 |
| $ | 5,610,791 |
| $ | 268,300 |
| 33 |
| 41,605 |
| 86.3 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Debt |
|
|
|
|
| Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investments |
|
|
| Investment |
| Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Four Seasons Health Care(2) |
|
|
| $ | 214,860 |
| $ | 149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Other |
|
|
| 9,617 |
| 558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| 224,477 |
| 707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
|
|
| $ | 5,835,268 |
| $ | 269,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Operator Concentration(3)
|
|
|
|
|
|
|
|
|
| NOI and |
|
|
|
|
|
|
|
|
| ||||
|
| Properties |
| Investment |
| Interest Income |
|
|
| Occupancy |
| EBITDAR |
| EBITDARM |
| ||||||||
Operator |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Beds |
| % |
| CFC(1) |
| CFC(1) |
| ||
HCR ManorCare(1) |
| 268 |
| 100 |
| $ | 5,364,080 |
| 92 |
| $ | 249,211 |
| 93 |
| 36,284 |
| 86.5 |
| N/A |
| N/A |
|
Four Seasons Health Care(2) |
| — |
| — |
| 214,860 |
| 4 |
| 149 |
| — |
| — |
| — |
| N/A |
| N/A |
| ||
Formation Capital |
| 9 |
| 100 |
| 63,100 |
| 1 |
| 3,427 |
| 1 |
| 934 |
| 94.3 |
| 1.99 x |
| 2.51 x |
| ||
Covenant Care |
| 12 |
| 100 |
| 64,291 |
| 1 |
| 5,319 |
| 2 |
| 1,328 |
| 85.1 |
| 1.76 x |
| 2.33 x |
| ||
Kindred Healthcare |
| 9 |
| 100 |
| 38,117 |
| 1 |
| 4,199 |
| 2 |
| 1,288 |
| 84.4 |
| 1.02 x |
| 1.66 x |
| ||
Other |
| 15 |
| 60 |
| 90,820 |
| 1 |
| 6,702 |
| 2 |
| 1,771 |
| 79.7 |
| 1.57 x |
| 2.06 x |
| ||
|
| 313 |
| 99 |
| $ | 5,835,268 |
| 100 |
| $ | 269,007 |
| 100 |
| 41,605 |
| 86.3 |
| 1.58 x |
| 2.12 x |
|
(1) EBITDAR, EBITDARM and their respective CFC are not presented for the disaggregated HCR ManorCare senior housing and post-acute/skilled nursing portfolios as the combined portfolio is cross-collateralized under a single master lease. See HCR ManorCare Leased Portfolio Summary on page 19 of this report.
(2) On June 28, 2012, the Company purchased senior unsecured notes of Four Seasons Health Care with an aggregate par value of ₤138.5 million at a discount for ₤136.8 million. The amount represents the carrying value translated into U.S. dollars as of June 30, 2012. For additional information see Note 10 to the Consolidated Financial Statements for the six months ended June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q filed with the SEC.
(3) Property count, beds, occupancy and CFCs are presented for leased properties and exclude debt investments.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Post-Acute/Skilled Nursing Portfolio
Dollars in thousands, except HCR ManorCare information |
|
Portfolio Trends |
|
| Same Property Leased Portfolio |
|
| Total Leased Portfolio(1) |
| ||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the |
|
| As of and for the Twelve Months Ended |
| ||||||||||||||||||
|
| 06/30/12 |
| 03/31/12 |
| 06/30/11 |
| 06/30/12 |
| 06/30/11 |
|
| 06/30/12 |
| 03/31/12(2) |
| 06/30/11(2) |
| ||||||||
Property count |
| 45 |
| 45 |
| 45 |
| 45 |
| 45 |
|
| 313 |
| 313 |
| 313 |
| ||||||||
Investment |
| $ | 246,711 |
| $ | 245,834 |
| $ | 244,738 |
| $ | 246,711 |
| $ | 244,738 |
|
| $ | 5,610,791 |
| $ | 5,579,365 |
| $ | 5,480,734 |
|
Beds |
| 5,321 |
| 5,321 |
| 5,286 |
| 5,321 |
| 5,286 |
|
| 41,605 |
| 41,746 |
| 41,773 |
| ||||||||
3-Month Occupancy % |
| 84.7 |
| 84.7 |
| 85.5 |
| 84.7 |
| 85.5 |
|
| 85.9 |
| 85.5 |
| 88.2 |
| ||||||||
12-Month Occupancy % |
| 84.8 |
| 84.8 |
| 85.3 |
| 84.8 |
| 85.3 |
|
| 86.3 |
| 86.8 |
| 87.5 |
| ||||||||
EBITDAR |
| $ | 58,460 |
| $ | 60,749 |
| $ | 61,545 |
| $ | 58,460 |
| $ | 61,545 |
|
| 58,460 |
| 60,749 |
| 61,545 |
| |||
EBITDAR CFC |
| 1.58 x |
| 1.64 x |
| 1.69 x |
| 1.58 x |
| 1.69 x |
|
| 1.58 x |
| 1.64 x |
| 1.69 x |
| ||||||||
EBITDARM |
| $ | 78,773 |
| $ | 81,309 |
| $ | 81,209 |
| $ | 78,773 |
| $ | 81,209 |
|
| 78,773 |
| 81,309 |
| 81,209 |
| |||
EBITDARM CFC |
| 2.12 x |
| 2.20 x |
| 2.24 x |
| 2.12 x |
| 2.24 x |
|
| 2.12 x |
| 2.20 x |
| 2.24 x |
| ||||||||
Quality Mix |
| 65.4% |
| 65.9% |
| 63.8% |
| 65.4% |
| 63.8% |
|
| 65.4% |
| 65.9% |
| 63.8% |
| ||||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental revenues |
| $ | 9,560 |
| $ | 9,616 |
| $ | 9,507 |
| $ | 19,176 |
| $ | 18,947 |
|
|
|
|
|
|
|
| |||
Operating expenses |
| (32 | ) | (51 | ) | (26 | ) | (83 | ) | (41 | ) |
|
|
|
|
|
|
| ||||||||
|
| 9,528 |
| 9,565 |
| 9,481 |
| 19,093 |
| 18,906 |
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Straight-line rents |
| (102 | ) | (164 | ) | (262 | ) | (266 | ) | (585 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 9,426 |
| $ | 9,401 |
| $ | 9,219 |
| $ | 18,827 |
| $ | 18,321 |
|
|
|
|
|
|
|
| |||
|
HCR ManorCare Leased Portfolio Summary |
| |||||||||||||||||||||||
| As of and for the six months ended June 30, 2012, dollars in thousands |
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Investment |
| Property |
|
|
|
|
| Adjusted |
|
|
| Facility EBITDAR |
| Facility EBITDARM |
| |||||||||
| Summary |
| Count |
| Investment(3) |
| NOI(4) |
| NOI |
| Occupancy |
| Amount |
| CFC |
| Amount |
| CFC |
| |||||
| Assisted living |
| 66 |
| $ | 833,615 |
| $ | 35,172 |
| $ | 29,221 |
| 82.9% |
| N/A |
| N/A |
| N/A |
| N/A |
| ||
| Post-acute/skilled |
| 268 |
| 5,364,080 |
| 249,211 |
| 211,180 |
| 86.5% |
| N/A |
| N/A |
| N/A |
| N/A |
| |||||
Total |
| 334 |
| $ | 6,197,695 |
| $ | 284,383 |
| $ | 240,401 |
| 86.1% |
| $ | 572,154 |
| 1.21 x |
| $ | 747,893 |
| 1.58 x |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| 06/30/12 |
| 03/31/12 |
| 06/30/11 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Quality mix |
| 69.9% | (5) | 70.4% |
| 70.8% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| HCR ManorCare OpCo (guarantor) fixed charge coverage(6) |
| 1.44 x |
|
|
|
|
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
(1) EBITDAR, EBITDARM, their respective CFC and quality mix are not presented for the disaggregated HCR ManorCare senior housing and post-acute/skilled nursing portfolios as the combined portfolio is cross-collateralized under a single master lease. For additional information see HCR ManorCare Leased Portfolio Summary.
(2) Amounts are presented as originally reported, without giving effect to discontinued operations.
(3) The Company’s total investment in HCR ManorCare includes aggregated accumulated DFL accretion of $180.7 million as of June 30, 2012.
(4) Assisted living and post-acute/skilled NOI includes reductions of $3.7 million and $25.9 million, respectively, related to HCP’s equity interest in HCR ManorCare OpCo.
(5) Private-pay and Medicare revenues as a percentage of total revenues are 31.4% and 38.5% respectively.
(6) HCR ManorCare OpCo (guarantor) fixed charge coverage is based on EBITDAR for the trailing 12 months, is one quarter in arrears from the date presented and includes home health and hospice EBITDAR and corporate general and administrative expenses, excluding HCR ManorCare’s non-recurring expenses associated with the sale of its real estate to HCP. The fixed charges include cash rent annualized and cash interest expense based on the trailing 12 months and are one quarter in arrears from the date presented.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Life Science Portfolio
As of and for the six months ended June 30, 2012, dollars and square feet in thousands |
Investments
|
| Property |
|
|
|
|
| Average |
| Square |
|
|
| ||
Leased Properties |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Feet |
| Occupancy % |
| ||
San Francisco |
| 77 |
| $ | 2,624,513 |
| $ | 92,313 |
| 19 |
| 4,673 |
| 88.1 |
|
San Diego |
| 21 |
| 590,364 |
| 18,787 |
| 19 |
| 1,581 |
| 89.3 |
| ||
Other |
| 11 |
| 125,278 |
| 6,836 |
| 19 |
| 746 |
| 100.0 |
| ||
|
| 109 |
| $ | 3,340,155 |
| $ | 117,936 |
| 19 |
| 7,000 |
| 89.6 |
|
Tenant Concentration
|
| Annualized Revenues |
| Square Feet |
| |||||
Tenant |
| Amount |
| % |
| Amount |
| % |
| |
Amgen |
| $ | 42,247 |
| 18 |
| 684 |
| 11 |
|
Genentech |
| 38,387 |
| 17 |
| 794 |
| 13 |
| |
Rigel Pharmaceuticals |
| 13,316 |
| 6 |
| 147 |
| 2 |
| |
Exelixis, Inc. |
| 13,144 |
| 6 |
| 295 |
| 5 |
| |
Takeda |
| 10,781 |
| 5 |
| 229 |
| 4 |
| |
LinkedIn Corporation |
| 9,642 |
| 4 |
| 303 |
| 5 |
| |
| 8,319 |
| 4 |
| 270 |
| 4 |
| ||
Myriad Genetics |
| 7,217 |
| 3 |
| 310 |
| 5 |
| |
General Atomics |
| 5,713 |
| 2 |
| 281 |
| 4 |
| |
ARUP |
| 5,418 |
| 2 |
| 324 |
| 5 |
| |
Other |
| 75,576 |
| 33 |
| 2,637 |
| 42 |
| |
|
| $ | 229,760 |
| 100 |
| 6,274 |
| 100 |
|
Portfolio Trends
|
| Same Property Leased Portfolio |
|
| Total Leased Portfolio |
| ||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the YTD Period Ended |
|
| At the Period Ended |
| ||||||||||||||||||
|
| 06/30/12 |
| 03/31/12 |
| 06/30/11 |
| 06/30/12 |
| 06/30/11 |
|
| 06/30/12 |
| 03/31/12(1) |
| 06/30/11(1) |
| ||||||||
Property count |
| 101 |
| 101 |
| 101 |
| 101 |
| 101 |
|
| 109 |
| 108 |
| 104 |
| ||||||||
Investment |
| $ | 3,207,732 |
| $ | 3,204,642 |
| $ | 3,200,225 |
| $ | 3,207,732 |
| $ | 3,200,225 |
|
| $ | 3,340,155 |
| $ | 3,331,015 |
| $ | 3,251,372 |
|
Square feet |
| 6,685 |
| 6,685 |
| 6,685 |
| 6,685 |
| 6,685 |
|
| 7,000 |
| 6,924 |
| 6,798 |
| ||||||||
Occupancy % |
| 91.5 |
| 91.1 |
| 90.4 |
| 91.5 |
| 90.4 |
|
| 89.6 |
| 89.1 |
| 89.2 |
| ||||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental and related revenues |
| $ | 60,697 |
| $ | 60,830 |
| $ | 61,266 |
| $ | 121,527 |
| $ | 122,321 |
|
|
|
|
|
|
|
| |||
Tenant recoveries |
| 11,016 |
| 10,279 |
| 9,833 |
| 21,295 |
| 20,547 |
|
|
|
|
|
|
|
| ||||||||
Operating expenses |
| (12,351 | ) | (11,687 | ) | (11,609 | ) | (24,038 | ) | (23,622 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 59,362 |
| $ | 59,422 |
| $ | 59,490 |
| $ | 118,784 |
| $ | 119,246 |
|
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Straight-line rents |
| (3,081 | ) | 340 |
| (3,765 | ) | (2,741 | ) | (7,922 | ) |
|
|
|
|
|
|
| ||||||||
Above (below) market lease intangibles, net |
| 128 |
| 89 |
| (340 | ) | 217 |
| (381 | ) |
|
|
|
|
|
|
| ||||||||
Lease termination fees |
| — |
| — |
| (1,589 | ) | — |
| (3,178 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 56,409 |
| $ | 59,851 |
| $ | 53,796 |
| $ | 116,260 |
| $ | 107,765 |
|
|
|
|
|
|
|
| |||
(1) Amounts are presented as originally reported, without giving effect to discontinued operations.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Life Science Portfolio
Dollars and square feet in thousands, except dollars per square foot
Selected Lease Expirations Data (next 3 years):
|
| Total |
| San Francisco |
| San Diego |
| Other |
| ||||||||||||||||
|
| Square Feet |
| Annualized Revenues |
| Square |
| Annualized |
| Square |
| Annualized |
| Square |
| Annualized |
| ||||||||
Year |
| Amount |
| % |
| Amount |
| % |
| Feet |
| Revenues |
| Feet |
| Revenues |
| Feet |
| Revenues |
| ||||
2012(1) |
| 91 |
| 1 |
| $ | 1,722 |
| 1 |
| 42 |
| $ | 166 |
| 49 |
| $ | 1,556 |
| — |
| $ | — |
|
2013 |
| 471 |
| 8 |
| 11,528 |
| 5 |
| 365 |
| 10,214 |
| 29 |
| 628 |
| 77 |
| 686 |
| ||||
2014 |
| 342 |
| 5 |
| 10,156 |
| 4 |
| 215 |
| 6,565 |
| 127 |
| 3,591 |
| — |
| — |
| ||||
Thereafter |
| 5,370 |
| 86 |
| 206,354 |
| 90 |
| 3,494 |
| 155,625 |
| 1,207 |
| 37,609 |
| 669 |
| 13,120 |
| ||||
|
| 6,274 |
| 100 |
| $ | 229,760 |
| 100 |
| 4,116 |
| $ | 172,570 |
| 1,412 |
| $ | 43,384 |
| 746 |
| $ | 13,806 |
|
Leasing Activity |
| Leased |
| Annualized |
| % |
| HCP 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, 2011 |
| 6,113 |
| $ | 36.24 |
|
|
|
|
|
|
|
|
|
|
| ||
Redevelopments placed in service |
| 54 |
| 27.68 |
|
|
|
|
|
|
|
|
|
|
| |||
Expirations |
| (194 | ) | 31.44 |
|
|
|
|
|
|
|
|
|
|
| |||
Renewals, amendments and extensions |
| 160 |
| 28.45 |
| (9.0 | ) | $ | 5.63 |
| $ | 9.38 |
| 110 |
| 82.3 |
| |
New leases and expansions |
| 75 |
| 29.39 |
|
|
| 18.91 |
| 7.90 |
| 67 |
|
|
| |||
Terminations |
| (41 | ) | 33.84 |
|
|
|
|
|
|
|
|
|
|
| |||
Leased Square Feet as of March 31, 2012 |
| 6,167 |
| $ | 36.74 |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Acquisitions |
| 77 |
|
| 9.79 |
|
|
|
|
|
|
|
|
|
|
| ||
Expirations |
| (83 | ) |
| 21.13 |
|
|
|
|
|
|
|
|
|
|
| ||
Renewals, amendments and extensions |
| 65 |
|
| 23.91 |
| 0.1 |
| $ | — |
| $ | 1.12 |
| 20 |
| 81.1 |
|
New leases and expansions |
| 48 |
|
| 11.82 |
|
|
| — |
| 1.92 |
| 81 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Leased Square Feet as of June 30, 2012 |
| 6,274 |
| $ | 36.62 |
|
|
|
|
|
|
|
|
|
|
|
(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 six months ended June 30, 2012, dollars and square feet in thousands
Investments
|
| Property |
|
|
|
|
| Average |
|
|
|
|
| ||
Leased Properties |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Square Feet |
| Occupancy % |
| ||
On-Campus |
| 141 |
| $ | 1,832,746 |
| $ | 78,478 |
| 20 |
| 10,737 |
| 91.3 |
|
Off-Campus |
| 44 |
| 462,863 |
| 18,700 |
| 19 |
| 2,235 |
| 92.1 |
| ||
|
| 185 |
| $ | 2,295,609 |
| $ | 97,178 |
| 20 |
| 12,972 |
| 91.4 |
|
Portfolio Trends
|
| Same Property Leased Portfolio |
|
| Total Leased Portfolio |
| ||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the |
|
| At the Period Ended |
| ||||||||||||||||||
|
| 06/30/12 |
| 03/31/12 |
| 06/30/11 |
| 06/30/12 |
| 06/30/11 |
|
| 06/30/12 |
| 03/31/12(1) |
| 06/30/11(1) |
| ||||||||
Property count |
| 185 |
| 185 |
| 185 |
| 184 |
| 184 |
|
| 185 |
| 186 |
| 188 |
| ||||||||
Investment |
| $ | 2,285,357 |
| $ | 2,274,301 |
| $ | 2,247,469 |
| $ | 2,253,535 |
| $ | 2,215,983 |
|
| $ | 2,295,609 |
| $ | 2,286,122 |
| $ | 2,272,818 |
|
Square feet |
| 12,921 |
| 12,871 |
| 12,884 |
| 12,788 |
| 12,752 |
|
| 12,972 |
| 12,950 |
| 13,097 |
| ||||||||
Occupancy % |
| 91.4 |
| 91.2 |
| 90.9 |
| 91.3 |
| 90.8 |
|
| 91.4 |
| 91.2 |
| 91.1 |
| ||||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental and related revenues |
| $ | 68,856 |
| $ | 67,727 |
| $ | 67,234 |
| $ | 135,235 |
| $ | 132,905 |
|
|
|
|
|
|
|
| |||
Tenant recoveries |
| 11,806 |
| 11,593 |
| 11,869 |
| 22,646 |
| 23,380 |
|
|
|
|
|
|
|
| ||||||||
Operating expenses |
| (30,483 | ) | (29,935 | ) | (30,135 | ) | (59,667 | ) | (59,893 | ) |
|
|
|
|
|
|
| ||||||||
|
| $ | 50,179 |
| $ | 49,385 |
| $ | 48,968 |
| $ | 98,214 |
| $ | 96,392 |
|
|
|
|
|
|
|
| |||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Straight-line rents |
| (1,044 | ) | (1,354 | ) | (1,494 | ) | (2,298 | ) | (3,539 | ) |
|
|
|
|
|
|
| ||||||||
Above market lease intangibles, net |
| 83 |
| 89 |
| 81 |
| 162 |
| 188 |
|
|
|
|
|
|
|
| ||||||||
Lease termination fees |
| (251 | ) | — |
| — |
| (251 | ) | — |
|
|
|
|
|
|
|
| ||||||||
|
| $ | 48,967 |
| $ | 48,120 |
| $ | 47,555 |
| $ | 95,827 |
| $ | 93,041 |
|
|
|
|
|
|
|
| |||
(1) Amounts are presented as originally reported, without giving effect to discontinued operations.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Medical Office Portfolio
Square feet in thousands
Leasing Activity
|
| Leased |
| Annualized |
| % |
| HCP Tenant |
| Leasing |
| Average |
| Retention |
| ||||
|
| Square |
| Base Rent Per |
| Change |
| Improvements |
| Costs Per |
| Lease Term |
| Rate |
| ||||
|
| Feet |
| Square Foot |
| In Rents(1) |
| Per Square Foot |
| Square Foot |
| (Months) |
| YTD |
| ||||
Leased Square Feet as of December 31, 2011 |
| 12,001 |
| $ | 22.13 |
|
|
|
|
|
|
|
|
|
|
| |||
Dispositions/redevelopment |
| (143 | ) | 15.59 |
|
|
|
|
|
|
|
|
|
|
| ||||
Expirations |
| (462 | ) | 22.81 |
|
|
|
|
|
|
|
|
|
|
| ||||
Renewals, amendments and extensions |
| 376 |
| 23.16 |
| 0.8 |
| $ | 12.64 |
| $ | 2.55 |
| 58 |
| 81.4 |
| ||
New leases |
| 64 |
| 19.75 |
|
|
| 14.38 |
| 3.63 |
| 50 |
|
|
| ||||
Terminations |
| (23 | ) | 21.31 |
|
|
|
|
|
|
|
|
|
|
| ||||
Leased Square Feet as of March 31, 2012 |
| 11,813 |
| $ | 22.41 |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Dispositions/redevelopment |
| (70 | ) |
| 17.50 |
|
|
|
|
|
|
|
|
|
|
| |||
Expirations |
| (449 | ) |
| 22.32 |
|
|
|
|
|
|
|
|
|
|
| |||
Renewals, amendments and extensions |
| 338 |
|
| 22.39 |
| 0.5 |
| $ | 8.55 |
| $ | 2.77 |
| 50 |
| 78.4 |
| |
New leases |
| 247 |
|
| 19.30 |
|
|
| 19.69 |
| 3.33 |
| 56 |
|
|
| |||
Terminations |
| (20 | ) |
| 20.68 |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Leased Square Feet as of June 30, 2012 |
| 11,859 |
| $ | 22.50 |
|
|
|
|
|
|
|
|
|
|
| |||
(1) For comparative purposes, the calculation reflects adjustments for leases that converted to a different lease type upon renewal, amendment or extension of the original lease.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Hospital Portfolio
As of and for the six months ended June 30, 2012, dollars in thousands
Investments
Leased |
| Property |
|
|
|
|
| Average |
|
|
| Occupancy |
| EBITDAR(1) |
| EBITDARM(1) |
| |||||||||
Properties |
| Count |
| Investment |
| NOI |
| Age (Years) |
| Beds |
| %(1) |
| Amount |
| CFC |
| Amount |
| CFC |
| |||||
Acute care |
| 5 |
| $ | 452,672 |
| $ | 28,835 |
| 35 |
| 1,578 |
| 50.6 |
| $ | 319,454 |
| 5.46 x |
| $ | 345,558 |
| 5.90 x |
| |
Rehab |
| 7 |
| 96,606 |
| 4,663 |
| 22 |
| 520 |
| 59.2 |
| 28,881 |
| 3.23 x |
| 33,002 |
| 3.69 x |
| |||||
Specialty |
| 2 |
| 63,725 |
| 2,533 |
| 28 |
| 68 |
| — |
| 19,181 |
| 3.71 x |
| 21,196 |
| 4.10 x |
| |||||
LTACH |
| 3 |
| 35,205 |
| 4,091 |
| 18 |
| 244 |
| 48.4 |
| 5,823 |
| 0.80 x |
| 8,992 |
| 1.24 x |
| |||||
|
| 17 |
| $ | 648,208 |
| $ | 40,122 |
| 26 |
| 2,410 |
| 52.6 |
| $ | 373,339 |
| 4.67 x |
| $ | 408,748 |
| 5.12 x |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Debt |
|
|
|
|
| Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Investments |
|
| Investment |
| Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acute care |
|
| $ | 15,119 |
| $ | 518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Specialty(2) |
|
|
| 68,784 |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| $ | 83,903 |
| $ | 518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total |
|
| $ | 732,111 |
| $ | 40,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Operator Concentration(3)
|
|
|
|
|
|
|
|
|
| NOI and |
|
|
|
|
|
|
| ||||
|
| Properties |
| Investment |
| Interest Income |
|
|
|
|
|
|
| ||||||||
Operator(1) |
| Count |
| % Pooled |
| Amount |
| % |
| Amount |
| % |
| Beds |
|
|
|
|
| ||
Tenet Healthcare |
| 3 |
| — |
| $ | 196,709 |
| 27 |
| $ | 11,574 |
| 28 |
| 756 |
|
|
|
|
|
HCA |
| 1 |
| — |
| 167,164 |
| 23 |
| 10,453 |
| 26 |
| 668 |
|
|
|
|
| ||
Delphis |
| 2 |
| — |
| 132,509 |
| 18 |
| 2,533 |
| 6 |
| 68 |
|
|
|
|
| ||
Hoag Memorial Hospital Presbyterian |
| 1 |
| — |
| 88,800 |
| 12 |
| 6,811 |
| 17 |
| 154 |
|
|
|
|
| ||
Other |
| 10 |
| 70 |
| 146,929 |
| 20 |
| 9,269 |
| 23 |
| 764 |
|
|
|
|
| ||
|
| 17 |
| 41 |
| $ | 732,111 |
| 100 |
| $ | 40,640 |
| 100 |
| 2,410 |
|
|
|
|
|
|
|
|
(1) |
| Certain operators in HCP’s hospital portfolio are not required under their respective leases to provide operational data. |
(2) |
| Represents a senior secured loan to Delphis that was placed on non-accrual status effective January 1, 2011. For additional information regarding the senior secured loan to Delphis see Note 7 to the Consolidated Financial Statements for the quarter ended June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q filed with the SEC. |
(3) |
| Property count and beds are presented for leased properties and exclude debt investments. |
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Owned Hospital Portfolio
Dollars in thousands
Portfolio Trends
|
| Same Property Leased Portfolio |
|
| Total Leased Portfolio |
| ||||||||||||||||||||||
|
| As of and for the Quarter Ended |
| As of and for the |
|
| As of and for the Twelve Months Ended |
| ||||||||||||||||||||
|
| 06/30/12 |
| 03/31/12 |
| 06/30/11 |
| 06/30/12 |
| 06/30/11 |
|
| 06/30/12 |
| 03/31/12(1) |
| 06/30/11(1) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Property count |
| 16 |
| 16 |
| 16 |
| 16 |
| 16 |
|
| 17 |
| 17 |
| 17 |
| ||||||||||
Investment |
| $ | 608,463 |
| $ | 607,456 |
| $ | 608,641 |
| $ | 608,463 |
| $ | 608,641 |
|
| $ | 648,208 |
| $ | 647,201 |
| $ | 648,386 |
| ||
Beds |
| 2,379 |
| 2,379 |
| 2,361 |
| 2,379 |
| 2,361 |
|
| 2,410 |
| 2,410 |
| 2,361 |
| ||||||||||
3-Month Occupancy % |
| 56.3 |
| 51.7 |
| 56.2 |
| 56.3 |
| 56.2 |
|
| 56.3 |
| 51.7 |
| 56.2 |
| ||||||||||
12-Month Occupancy % |
| 52.6 |
| 52.5 |
| 54.5 |
| 52.6 |
| 54.5 |
|
| 52.6 |
| 52.5 |
| 54.5 |
| ||||||||||
EBITDAR |
| $ | 364,098 |
| $ | 346,009 |
| $ | 296,542 |
| $ | 364,098 |
| $ | 296,542 |
|
| $ | 373,339 |
| $ | 355,101 |
| $ | 305,868 |
| ||
EBITDAR CFC |
| 4.73 x |
| 4.52 x |
| 4.68 x |
| 4.73 x |
| 4.68 x |
|
| 4.67 x |
| 4.46 x |
| 4.62 x |
| ||||||||||
EBITDARM |
| $ | 398,473 |
| $ | 380,531 |
| $ | 328,263 |
| $ | 398,473 |
| $ | 328,263 |
|
| $ | 408,748 |
| $ | 390,744 |
| $ | 338,984 |
| ||
EBITDARM CFC |
| 5.18 x |
| 4.97 x |
| 5.18 x |
| 5.18 x |
| 5.18 x |
|
| 5.12 x |
| 4.91 x |
| 5.12 x |
| ||||||||||
NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Rental and related revenues |
| $ | 21,848 |
| $ | 18,614 |
| $ | 21,524 |
| $ | 40,462 |
| $ | 39,635 |
|
|
|
|
|
|
|
| |||||
Operating expenses |
| (936 | ) | (929 | ) | (1,221 | ) | (1,865 | ) | (2,186 | ) |
|
|
|
|
|
|
| ||||||||||
|
| $ | 20,912 |
| $ | 17,685 |
| $ | 20,303 |
| $ | 38,597 |
| $ | 37,449 |
|
|
|
|
|
|
|
| |||||
Adjusted NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Straight-line rents |
| (161 | ) | (184 | ) | (254 | ) | (345 | ) | (529 | ) |
|
|
|
|
|
|
| ||||||||||
Below market lease intangibles, net |
| (193 | ) | (192 | ) | (192 | ) | (385 | ) | (385 | ) |
|
|
|
|
|
|
| ||||||||||
|
| $ | 20,558 |
| $ | 17,309 |
| $ | 19,857 |
| $ | 37,867 |
| $ | 36,535 |
|
|
|
|
|
|
|
| |||||
(1) Amounts are presented as originally reported, without giving effect to discontinued operations.
See Reporting Definitions and Reconciliations of Non-GAAP Measures
|
|
|
Investment Management Platform
As of and for the six months ended June 30, 2012, dollars and square feet in thousands
|
|
|
|
|
|
|
|
|
| Joint |
|
|
| HCP’s |
|
|
| ||||||
Unconsolidated |
|
|
| Date |
| HCP’s |
| Joint |
| Venture’s |
| HCP’s Net |
| Investment |
| Initial |
| ||||||
Institutional |
| Primary |
| Established/ |
| Ownership |
| Venture’s |
| Mortgage |
| Equity |
| Management |
| Term |
| ||||||
Joint Ventures |
| Segment |
| Acquired |
| Percentage |
| Investment |
| Debt |
| Investment(1) |
| Fee Income |
| (in years) |
| ||||||
HCP Ventures III |
| Medical office |
| October-06 |
|
| 30%(2) |
| $ | 143,557 |
| $ | 91,730 |
| $ | 8,012 |
| $ | 193 |
| 10 |
|
|
HCP Ventures IV |
| Medical office |
| April-07 |
|
| 20% |
| 659,965 |
| 374,055 |
| 33,964 |
| 768 |
| 10 |
|
| ||||
HCP Life Science |
| Life science |
| August-07 |
| 50%-63% |
| 144,481 |
| 4,830 |
| 66,883 |
| 2 |
| 97-98 |
|
| |||||
|
|
|
|
|
|
|
| $ | 948,003 |
| $ | 470,615 |
| $ | 108,859 |
| $ | 963 |
|
|
|
Selected Financial Data(3)
|
| Three Months Ended June 30, 2012 |
| Six Months Ended June 30, 2012 |
| ||||||||
|
| Medical Office |
| Life Science |
| Medical Office |
| Life Science |
| ||||
Total revenues |
| $ | 19,101 |
| $ | 2,741 |
| $ | 38,801 |
| $ | 5,475 |
|
Operating expenses |
| (8,096 | ) | (403 | ) | (15,915 | ) | (801 | ) | ||||
NOI |
| $ | 11,005 |
| $ | 2,338 |
| $ | 22,886 |
| $ | 4,674 |
|
Depreciation and amortization |
| (7,173 | ) | (396 | ) | (14,167 | ) | (790 | ) | ||||
General and administrative |
| (999 | ) | (8 | ) | (1,815 | ) | (25 | ) | ||||
Interest expense and other |
| (6,769 | ) | (97 | ) | (13,500 | ) | (209 | ) | ||||
Net income (loss) |
| $ | (3,936 | ) | $ | 1,837 |
| $ | (6,596 | ) | $ | 3,650 |
|
Depreciation and amortization |
| 7,173 |
| 396 |
| 14,167 |
| 790 |
| ||||
FFO |
| $ | 3,237 |
| $ | 2,233 |
| $ | 7,571 |
| $ | 4,440 |
|
Amortization of above and below market lease intangibles, net |
| (186 | ) | — |
| (370 | ) | — |
| ||||
Amortization of deferred financing costs, net |
| 162 |
| 9 |
| 352 |
| 17 |
| ||||
Straight-line rents |
| (156 | ) | 98 |
| (562 | ) | 178 |
| ||||
Leasing costs and tenant and capital improvements |
| (2,670 | ) | (10 | ) | (4,134 | ) | (2 | ) | ||||
FAD |
| $ | 387 |
| $ | 2,330 |
| $ | 2,857 |
| $ | 4,633 |
|
|
|
|
|
|
|
|
|
|
| ||||
HCP’s pro rata share of net income (loss) |
| $ | (792 | ) | $ | 1,074 |
| $ | (1,325 | ) | $ | 2,135 |
|
|
|
|
|
|
|
|
|
|
| ||||
HCP’s pro rata share of FFO |
| $ | 769 |
| $ | 1,291 |
| $ | 1,759 |
| $ | 2,567 |
|
|
|
|
|
|
|
|
|
|
| ||||
HCP’s pro rata share of FAD |
| $ | 177 |
| $ | 1,343 |
| $ | 768 |
| $ | 2,672 |
|
|
| Property |
|
|
|
|
| Adjusted |
| Average |
| Square |
|
|
| |||||
HCP Ventures III |
| Count |
| Investment |
| NOI |
| NOI |
| Age (Years) |
| Feet |
| Occupancy %(4) |
| |||||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
On-Campus |
| 9 |
| $ | 109,779 |
| $ | 4,581 |
| $ | 4,502 |
| 12 |
| 619 |
|
| 98.6 |
|
|
Off-Campus |
| 4 |
| 33,778 |
| 1,109 |
| 1,106 |
| 11 |
| 183 |
|
| 86.9 |
|
| |||
|
| 13 |
| $ | 143,557 |
| $ | 5,690 |
| $ | 5,608 |
| 11 |
| 802 |
|
| 95.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
HCP Ventures IV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Medical office: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
On-Campus |
| 22 |
| $ | 216,897 |
| $ | 5,393 |
| $ | 5,397 |
| 24 |
| 1,103 |
|
| 75.9 |
|
|
Off-Campus |
| 31 |
| 361,685 |
| 9,874 |
| 9,215 |
| 20 |
| 1,487 |
|
| 83.1 |
|
| |||
Hospital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LTACH |
| 1 |
| 12,193 |
| 24 |
| 24 |
| 6 |
| N/A |
|
| N/A |
|
| |||
Specialty |
| 3 |
| 69,190 |
| 1,905 |
| 1,670 |
| 7 |
| N/A |
|
| N/A |
|
| |||
|
| 57 |
| $ | 659,965 |
| $ | 17,196 |
| $ | 16,306 |
| 21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
HCP Life Science |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
San Francisco |
| 2 |
| $ | 74,700 |
| $ | 2,362 |
| $ | 2,526 |
| 15 |
| 147 |
|
| 100.0 |
|
|
San Diego |
| 2 |
| 69,781 |
| 2,312 |
| 2,324 |
| 16 |
| 131 |
|
| 90.3 |
|
| |||
|
| 4 |
| $ | 144,481 |
| $ | 4,674 |
| $ | 4,850 |
| 16 |
| 278 |
|
| 95.4 |
|
|
Total |
| 74 |
| $ | 948,003 |
| $ | 27,560 |
| $ | 26,764 |
|
|
|
|
|
|
|
|
|
(1) | The carrying value of investments in unconsolidated joint ventures is based on the amount the Company paid to purchase the joint venture interest, which is different from the Company’s 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 medical office column). |
(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 | |
| |
|
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 Company has provided reconciliations of this measure to the most comparable GAAP measure in this supplemental information package and for certain historical trend information on page 6, such reconciliations are available in the Company’s Current Reports on Form 8-K filed with the SEC dated February 14, 2012 (2011 metrics), February 15, 2011 (2010 metrics), February 12, 2010 (2009 metrics), February 10, 2009 (2008 metrics), February 11, 2008 (2008 and 2007 metrics) and July 30, 2007 (Pre-CNL Acquisition metrics).
The following table details the calculation of Adjusted Fixed Charge Coverage (dollars in thousands):
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Adjusted EBITDA |
| $ | 399,116 |
| $ | 432,365 |
| $ | 790,062 |
| $ | 701,834 |
|
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| $ | 103,225 |
| $ | 105,129 |
| $ | 207,793 |
| $ | 213,705 |
|
HCP’s share of interest expense from the Investment Management Platform |
| 1,553 |
| 1,584 |
| 3,106 |
| 3,159 |
| ||||
Capitalized interest |
| 6,812 |
| 6,550 |
| 13,495 |
| 12,538 |
| ||||
Preferred stock dividends |
| — |
| 5,283 |
| 6,574 |
| 10,566 |
| ||||
Fixed charges |
| $ | 111,590 |
| $ | 118,546 |
| $ | 230,968 |
| $ | 239,968 |
|
|
|
|
|
|
|
|
|
|
| ||||
Adjusted fixed charge coverage |
| 3.6x |
| 3.6x |
| 3.4x |
| 2.9x |
|
Annualized Revenues. The most recent month’s (or subsequent month’s if acquired in the most recent month) base rent including additional rent floors, cash income from direct financing leases and/or interest income annualized for 12 months. Annualized Revenues for operating properties under a RIDEA structure are calculated based on the most recent monthly NOI annualized for 12 months. Annualized Revenues do not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of above and below market lease intangibles, DFL interest accretion and deferred revenues). The Company uses Annualized Revenues for the purpose of determining Operator/Tenant Diversification, Lease Expirations and Debt Investment Maturities.
Assets Held for Sale. Assets of discontinued operations in accordance with Accounting Standards Codification Topic 360.
Assisted Living Facility (“ALF”). A senior housing facility that predominantly consists of assisted living units is classified by the Company as an ALF.
Cash Flow Coverage (“CFC”). Facility EBITDAR or Facility EBITDARM for the trailing 12 months and one quarter in arrears from the date reported 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 Secured Debt. Mortgage and other 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.
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.
|
|
|
Reporting Definitions and Reconciliations of Non-GAAP Measures
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, gains or losses from real estate dispositions, and litigation settlement charge. 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, impairment recoveries, 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 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 (in thousands):
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 204,975 |
| $ | 234,252 |
| $ | 401,539 |
| $ | 308,236 |
|
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 103,225 |
| 105,129 |
| 207,793 |
| 213,705 |
| ||||
Income taxes: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 176 |
| 248 |
| (533 | ) | 285 |
| ||||
Discontinued operations |
| — |
| — |
| 103 |
| — |
| ||||
Depreciation and amortization of real estate, in-place lease and other intangibles: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| 87,924 |
| 89,814 |
| 176,165 |
| 180,996 |
| ||||
Discontinued operations |
| — |
| 238 |
| 35 |
| 476 |
| ||||
Equity income from unconsolidated joint ventures |
| (15,732 | ) | (14,950 | ) | (29,407 | ) | (15,748 | ) | ||||
HCP’s share of EBITDA from the Investment Management Platform |
| 3,612 |
| 3,872 |
| 7,432 |
| 7,969 |
| ||||
Other joint venture adjustments |
| 14,936 |
| 13,492 |
| 29,791 |
| 13,684 |
| ||||
EBITDA |
| $ | 399,116 |
| $ | 432,095 |
| $ | 792,918 |
| $ | 709,603 |
|
|
|
|
|
|
|
|
|
|
| ||||
Gain on sales of real estate |
| — |
| — |
| (2,856 | ) | — |
| ||||
Gain upon consolidation of joint venture |
| — |
| 270 |
| — |
| (7,769 | ) | ||||
Adjusted EBITDA |
| $ | 399,116 |
| $ | 432,365 |
| $ | 790,062 |
| $ | 701,834 |
|
Facility EBITDAR (“EBITDAR”). Earnings before interest, taxes, depreciation, amortization and rent for a particular facility accruing to the operator/tenant of the property (not the Company), for the trailing 12 months and one quarter in arrears from the date reported. The Company uses Facility EBITDAR in determining Cash Flow Coverage and Debt Service Coverage. Facility EBITDAR has limitations as an analytical tool. Facility EBITDAR does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDAR does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management. The Company utilizes Facility EBITDAR as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company. Facility EBITDAR includes the greater of (i) contractual management fees or (ii) an imputed management fee of 5% for senior housing facilities and post-acute/skilled nursing facilities and 2% for acute care hospitals which the Company believes represents typical management fees in their respective industries. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.
Facility EBITDARM (“EBITDARM”). Earnings before interest, taxes, depreciation, amortization, rent and management fees for a particular facility accruing to the operator/tenant of the property (not the Company), for the trailing 12 months and one quarter in arrears from the date reported. The Company uses Facility EBITDARM in determining Cash Flow Coverage and Debt Service Coverage. Facility EBITDARM has limitations as an analytical tool. Facility EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDARM does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management. The Company utilizes Facility EBITDARM as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.
| |
|
Reporting Definitions and Reconciliations of Non-GAAP Measures
Financial Leverage. Total Debt divided by Total Gross Assets. The Company believes that its Financial Leverage is a meaningful supplemental measure of its financial position, which enables both management and investors to analyze its leverage and to compare its leverage to that of other companies. The Company believes that the ratio of Consolidated Debt to Consolidated Gross Assets is the most directly comparable GAAP measure to Financial Leverage. The Company’s computation of its Financial Leverage may not be identical to the computations of financial leverage reported by other companies. The Company’s pro rata share of total debt from the Investment Management Platform is not intended to reflect its actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the joint ventures. The Company has provided reconciliations of this measure to the most comparable GAAP measure in this supplemental information package and for certain historical trend information on page 6, such reconciliations are available in the Company’s Current Reports on Form 8-K filed with the SEC dated February 14, 2012 (2011 metrics), February 15, 2011 (2010 metrics), February 12, 2010 (2009 metrics), February 10, 2009 (2008 metrics), February 11, 2008 (2008 and 2007 metrics) and July 30, 2007 (Pre-CNL Acquisition metrics).
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 Available for Distribution (“FAD”). Funds Available for Distribution is defined as FFO as adjusted after excluding the impact of the following: (i) amortization of acquired above/below market lease intangibles, net; (ii) amortization of deferred compensation expense; (iii) amortization of deferred financing costs, net; (iv) straight-line rents; (v) accretion and depreciation related to DFLs; and (vi) deferred revenues. Further, FAD is computed after deducting recurring capital expenditures, including leasing costs and second generation tenant and capital improvements, and includes similar adjustments to compute the Company’s share of FAD from its unconsolidated joint ventures. Other real estate investment trusts (“REITs”) or real estate companies may use different methodologies for calculating FAD, and accordingly, the Company’s FAD may not be comparable to those reported by other REITs. Although the Company’s FAD computation may not be comparable to that of other REITs, management believes FAD provides a meaningful supplemental measure of the Company’s ability to fund its ongoing dividend payments. In addition, management believes that in order to further understand and analyze the Company’s liquidity, FAD should be compared with cash flows as determined in accordance with GAAP and presented in its consolidated financial statements. FAD does not represent cash generated from operating activities determined in accordance with GAAP, and FAD should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company’s liquidity.
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 REIT. Because the historical cost accounting convention used for real estate assets utilizes 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 REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REIT that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income (determined in accordance with GAAP), excluding gains or losses from acquisition and dispositions of depreciable real estate or related interests, impairments of, or related to, depreciable real estate, plus real estate and DFL 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 REITs 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 and DFL depreciation and amortization, FFO can help investors compare the operating performance of a REIT between periods or as compared to other companies. While FFO is a relevant and widely used measure of operating performance of REITs, 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. The Company’s computation of FFO may not be comparable to FFO reported by other REITs 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 as adjusted represents FFO before the impact of litigation settlement charges, preferred stock redemption charges, impairments (recoveries) of non-depreciable assets and merger-related items. Merger-related items include estimated acquisition pursuit costs that consist primarily of professional fees and the impact of common stock offerings which increase the weighted average shares outstanding, when such proceeds will be used to fund a portion of the cash consideration of the Company’s pending acquisitions. Management believes FFO as adjusted is a useful alternative measurement. This measure is a modification of the NAREIT definition of FFO and should not be used as an alternative to net income (determined in accordance with GAAP).
FAD Payout Ratio. Dividends declared per common share divided by Diluted FAD per common share for a given period. The Company believes the FAD Payout Ratio per Common Share provides investors relevant and useful information because it measures the portion of FAD being declared as dividends to common stockholders. FAD Payout Ratio per Common Share is subject to the same limitations noted in the definition of FAD above.
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.
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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 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 III and (iii) 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 and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses. NOI excludes interest income, investment management fee income, interest expense, depreciation and amortization, general and administrative expenses, litigation settlement, impairments, impairment recoveries, other income, net, income taxes, equity income from and impairments of unconsolidated joint ventures, and discontinued operations. The Company believes NOI provides investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI eliminating the effects of straight-line rents, DFL accretion, amortization of above and below market lease intangibles, and lease termination fees. Adjusted NOI is sometimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI 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 (determined in accordance with GAAP) since it does not reflect the aforementioned excluded items. Further, NOI may not be comparable to that of other REITs, as they may use different methodologies for calculating NOI.
The following table reconciles NOI from net income (in thousands):
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| ||||
Net income |
| $ | 204,975 |
| $ | 234,252 |
| $ | 401,539 |
| $ | 308,236 |
|
Interest income |
| (1,216 | ) | (60,526 | ) | (2,035 | ) | (98,622 | ) | ||||
Investment management fee income |
| (470 | ) | (504 | ) | (963 | ) | (1,111 | ) | ||||
Interest expense |
| 103,225 |
| 105,129 |
| 207,793 |
| 213,705 |
| ||||
Depreciation and amortization |
| 87,924 |
| 89,814 |
| 176,165 |
| 180,996 |
| ||||
General and administrative |
| 14,812 |
| 34,872 |
| 34,914 |
| 56,824 |
| ||||
Other income, net |
| (1,028 | ) | (7,518 | ) | (1,464 | ) | (17,827 | ) | ||||
Income taxes |
| 176 |
| 248 |
| (533 | ) | 285 |
| ||||
Equity income from unconsolidated joint ventures |
| (15,732 | ) | (14,950 | ) | (29,407 | ) | (15,748 | ) | ||||
Total discontinued operations, net of taxes |
| — |
| (337 | ) | (2,993 | ) | (678 | ) | ||||
NOI |
| $ | 392,666 |
| $ | 380,480 |
| $ | 783,016 |
| $ | 626,060 |
|
|
|
|
|
|
|
|
|
|
| ||||
Straight-line rents |
| (11,860 | ) | (15,612 | ) | (21,787 | ) | (32,912 | ) | ||||
DFL accretion |
| (22,017 | ) | (22,262 | ) | (47,639 | ) | (24,937 | ) | ||||
Amortization of above and below market lease intangibles, net |
| (625 | ) | (1,187 | ) | (1,322 | ) | (2,093 | ) | ||||
Lease termination fees |
| (251 | ) | (1,589 | ) | (399 | ) | (3,178 | ) | ||||
NOI adjustments related to discontinued operations |
| — |
| — |
| 148 |
| — |
| ||||
Adjusted NOI |
| $ | 357,913 |
| $ | 339,830 |
| $ | 712,017 |
| $ | 562,940 |
|
Occupancy. For life science facilities and medical office buildings, 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 senior housing facilities, post-acute/skilled nursing facilities and hospitals, occupancy represents the facilities’ average operating occupancy for the trailing three-month and 12-month periods and one quarter in arrears from the date reported. The percentages are calculated based on units, licensed beds and available beds for senior housing facilities, post-acute/skilled nursing facilities and hospitals, 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 was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. For the SPP, occupancy for senior housing facilities, post-acute/skilled nursing facilities and hospitals are presented based on the average operating occupancy for the trailing three-month and 12-month periods and one quarter in arrears from the date reported.
Owned Portfolio. Represents owned properties subject to operating leases and DFLs, properties operated under a RIDEA structure and debt investments, and excludes properties under development, including redevelopment, land held for development and real estate owned by the Company’s unconsolidated joint ventures.
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Reporting Definitions and Reconciliations of Non-GAAP Measures
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. For example, Sunrise Senior Living percentage pooled consists of 47 assets under 6 separate pools.
Quality Mix. Represents non-Medicaid revenues as a percent of total revenues for the trailing 12 months and is one quarter in arrears from the period presented.
Redevelopment Projects. Properties that require significant capital expenditures (generally more than 25% of acquisition 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 and RIDEA Revenues. Represents rental and related revenues, tenant recoveries, resident fees and services, and income from direct financing leases.
Retention Rate. Represents the ratio of total renewed square feet to the total square feet expiring and available for lease, excluding the square feet for tenant leases terminated for default or buy-out prior to the expiration of their lease.
RIDEA. The Housing and Economic Recovery Act of 2008 (commonly referred to as “RIDEA”).
Same Period Rent. The base rent plus additional rent due to the Company over the trailing 12 months and one quarter in arrears from the date reported. The Company uses Same Period Rent for purposes of determining property-level Cash Flow Coverage.
Same Property Portfolio (“SPP”). SPP statistics allow management to evaluate the performance of the Company’s real estate portfolio under a consistent population, which eliminates the changes in the composition of the Company’s portfolio of properties. The Company identifies its SPP as stabilized properties that remained in operations and were consistently reported as leased properties or operating properties (RIDEA) for the duration of the year-over-year comparison periods presented. Accordingly, it takes a stabilized property a minimum of 12 months in operations under a consistent reporting structure to be included in the Company’s SPP. SPP NOI excludes certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis.
Secured Debt Ratio. Total Secured Debt divided by Total Gross Assets. The Company believes that its Secured Debt Ratio 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 Secured Debt to Consolidated Gross Assets is the most directly comparable GAAP measure to Secured Debt Ratio. The Company’s computation of its Secured Debt Ratio may not be identical to the computations of Secured Debt Ratio reported by other companies. The Company’s pro rata share of total secured debt from the Investment Management Platform is not intended to reflect its actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the joint ventures. The Company has provided reconciliations of this measure to the most comparable GAAP measure in this supplemental information package and for certain historical trend information on page 6, such reconciliations are available in the Company’s Current Reports on Form 8-K filed with the SEC dated February 14, 2012 (2011 metrics), February 15, 2011 (2010 metrics), February 12, 2010 (2009 metrics), February 10, 2009 (2008 metrics), February 11, 2008 (2008 and 2007 metrics) and July 30, 2007 (Pre-CNL Acquisition metrics).
Senior Housing. ALFs, ILFs and CCRCs.
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.
Stabilized. Newly acquired operating assets are generally considered stabilized at the earlier of lease up (typically when the tenant(s) controls the physical use of 80% of the space) or 12 months from the acquisition date. Newly completed developments, including redevelopments, are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service.
Total Debt. Consolidated Debt at book value plus the Company’s pro rata share of total 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):
|
| June 30, |
| December 31, |
| June 30, |
| |||
Consolidated total assets |
| $ | 17,789,768 |
| $ | 17,408,475 |
| $ | 17,693,058 |
|
Investments in and advances to unconsolidated joint ventures |
| (219,877 | ) | (224,052 | ) | (224,625 | ) | |||
Accumulated depreciation and amortization |
| 1,827,357 |
| 1,672,501 |
| 1,570,997 |
| |||
Accumulated depreciation and amortization from assets held for sale |
| — |
| 1,705 |
| 7,114 |
| |||
Consolidated gross assets |
| $ | 19,397,248 |
| $ | 18,858,629 |
| $ | 19,046,544 |
|
HCP’s share of unconsolidated total assets(1) |
| 267,782 |
| 269,606 |
| 297,427 |
| |||
HCP’s share of unconsolidated accumulated depreciation and amortization(1) |
| 43,383 |
| 40,104 |
| 37,603 |
| |||
Total gross assets |
| $ | 19,708,413 |
| $ | 19,168,339 |
| $ | 19,381,574 |
|
(1) Reflects the Company’s pro rata share of amounts from the Investment Management Platform and its equity interest in HCR ManorCare OpCo.
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Reporting Definitions and Reconciliations of Non-GAAP Measures
Total Market Capitalization. Total Debt plus Total Market Equity.
Total 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.
Total Secured Debt. Consolidated Secured Debt plus the Company’s pro rata share of mortgage debt from the Investment Management Platform.
Units/Square Feet/Beds. Senior housing facilities are measured in units (e.g., studio, one or two bedroom units). Life science facilities and medical office buildings are measured in square feet. Post-acute/skilled nursing facilities and hospitals are measured in licensed bed count.
Yield. Yield is calculated as Net Operating Income, as adjusted, divided by Investment. For acquisitions, initial yields are calculated as projected Net Operating Income, 12 months forward, as adjusted, as of the closing date divided by total acquisition cost basis. 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.
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