Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | HCP, INC. | |
Entity Central Index Key | 765880 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 461,676,261 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Real estate: | ||||
Buildings and improvements | $10,980,848 | $10,972,973 | ||
Development costs and construction in progress | 293,492 | 275,233 | ||
Land | 1,882,476 | 1,889,438 | ||
Accumulated depreciation and amortization | -2,319,791 | -2,250,757 | ||
Net real estate | 10,837,025 | 10,886,887 | ||
Net investment in direct financing leases | 6,827,596 | 7,280,334 | ||
Loans receivable, net | 1,025,278 | 906,961 | ||
Investments in and advances to unconsolidated joint ventures | 642,795 | 605,448 | ||
Accounts receivable, net of allowance of $3,629 and $3,785, respectively | 40,153 | 36,339 | ||
Cash and cash equivalents | 137,170 | 183,810 | ||
Restricted cash | 47,279 | 48,976 | ||
Intangible assets, net | 458,249 | 481,013 | ||
Other assets, net | 1,008,897 | 940,172 | ||
Total assets | 21,024,442 | [1] | 21,369,940 | [1] |
LIABILITIES AND EQUITY | ||||
Bank line of credit | 358,555 | 838,516 | ||
Term loan | 530,038 | 213,610 | ||
Senior unsecured notes | 8,022,533 | 7,626,194 | ||
Mortgage debt | 979,890 | 984,431 | ||
Other debt | 95,747 | 97,022 | ||
Intangible liabilities, net | 80,387 | 84,723 | ||
Accounts payable and accrued liabilities | 314,226 | 432,934 | ||
Deferred revenue | 87,420 | 95,411 | ||
Total liabilities | 10,468,796 | [2] | 10,372,841 | [2] |
Commitments and contingencies | ||||
Common stock, $1.00 par value: 750,000,000 shares authorized; 461,583,731 and 459,746,267 shares issued and outstanding, respectively | 461,584 | 459,746 | ||
Additional paid-in capital | 11,493,988 | 11,431,987 | ||
Cumulative dividends in excess of earnings | -1,633,841 | -1,132,541 | ||
Accumulated other comprehensive loss | -28,461 | -23,895 | ||
Total stockholders' equity | 10,293,270 | 10,735,297 | ||
Joint venture partners | 75,397 | 73,214 | ||
Non-managing member unitholders | 186,979 | 188,588 | ||
Total noncontrolling interests | 262,376 | 261,802 | ||
Total equity | 10,555,646 | 10,997,099 | ||
Total liabilities and equity | $21,024,442 | $21,369,940 | ||
[1] | The Company’s consolidated total assets at March 31, 2015 and December 31, 2014 include assets of certain variable interest entities (“VIEsâ€) that can only be used to settle the liabilities of those VIEs. Total assets at March 31, 2015 include VIE assets as follows: buildings and improvements $699 million; land $114 million; accumulated depreciation and amortization $120 million; accounts receivable $15 million; cash $36 million; and other assets, net $14 million. Total assets at December 31, 2014 include VIE assets as follows: buildings and improvements $677 million; land $113 million; accumulated depreciation and amortization $111 million; accounts receivable $5 million; cash $42 million; and other assets, net of $23 million from VIEs. See Note 17 to the Consolidated Financial Statements for additional information. | |||
[2] | The Company’s consolidated total liabilities at March 31, 2015 and December 31, 2014 include certain liabilities of VIEs for which the VIE creditors do not have recourse to HCP, Inc. Total liabilities at March 31, 2015 include accounts payable and accrued liabilities of $33 million and deferred revenue of $9 million from VIEs. Total liabilities at December 31, 2014 include accounts payable and accrued liabilities of $34 million and deferred revenue of $12 million from VIEs. See Note 17 to the Consolidated Financial Statements for additional information. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Company's involvement with VIEs: | ||
Land | $1,882,476,000 | $1,889,438,000 |
Accumulated depreciation and amortization | 2,319,791,000 | 2,250,757,000 |
Accounts Receivable | 40,153,000 | 36,339,000 |
Cash and cash equivalents | 137,170,000 | 183,810,000 |
Other assets, net | 1,008,897,000 | 940,172,000 |
Accounts payable and accrued liabilities | 314,226,000 | 432,934,000 |
Deferred Revenue | 87,420,000 | 95,411,000 |
Balance Sheet Parenthetical Disclosures | ||
Accounts receivable, allowance (in dollars) | 3,629,000 | 3,785,000 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 461,583,731 | 459,746,267 |
Common stock, shares outstanding | 461,583,731 | 459,746,267 |
VIEs | ||
Company's involvement with VIEs: | ||
Buildings and improvements | 699,000,000 | 677,000,000 |
Land | 114,000,000 | 113,000,000 |
Accumulated depreciation and amortization | 120,000,000 | 111,000,000 |
Accounts Receivable | 15,000,000 | 5,000,000 |
Cash and cash equivalents | 36,000,000 | 42,000,000 |
Other assets, net | 14,000,000 | 23,000,000 |
Accounts payable and accrued liabilities | 33,000,000 | 34,000,000 |
Deferred Revenue | $9,000,000 | $12,000,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Rental and related revenues | $275,082 | $284,823 |
Tenant recoveries | 29,896 | 25,434 |
Resident fees and services | 105,013 | 38,053 |
Income from direct financing leases | 167,078 | 164,537 |
Interest income | 33,262 | 16,696 |
Fees earned by HCP | 460 | 449 |
Total revenues | 610,791 | 529,992 |
Costs and expenses: | ||
Interest expense | 116,780 | 106,638 |
Depreciation and amortization | 114,522 | 107,388 |
Operating | 132,031 | 75,707 |
General and administrative | 24,773 | 20,899 |
Acquisition and pursuit costs | 3,390 | 495 |
Impairments | 478,464 | |
Total costs and expenses | 869,960 | 311,127 |
Gain on sales of real estate, net of income taxes | 6,264 | |
Other income, net | 1,724 | 1,930 |
(Loss) income before income taxes and equity income from unconsolidated joint ventures | -251,181 | 220,795 |
Income taxes benefit (provision) | 77 | -1,446 |
Equity income from unconsolidated joint ventures | 13,601 | 14,528 |
(Loss) income from continuing operations | -237,503 | 233,877 |
Discontinued operations: | ||
Income before impairment losses and gain on sales of real estate, net of income taxes | 1,736 | |
Gain on sales of real estate, net of income taxes | 28,010 | |
Total discontinued operations | 29,746 | |
Net (loss) income | -237,503 | 263,623 |
Noncontrolling interests' share in earnings | -3,111 | -4,512 |
Net (loss) income applicable to HCP, Inc. | -240,614 | 259,111 |
Participating securities' share in earnings | -335 | -1,064 |
Net (loss) income applicable to common shares | ($240,949) | $258,047 |
Basic earnings per common share: | ||
Continuing operations (in dollars per share) | ($0.52) | $0.50 |
Discontinued operations (in dollars per share) | $0.06 | |
Net (loss) income applicable to common shares (in dollars per share) | ($0.52) | $0.56 |
Diluted earnings per common share: | ||
Continuing operations (in dollars per share) | ($0.52) | $0.50 |
Discontinued operations (in dollars per share) | $0.06 | |
Net (loss) income applicable to common shares (in dollars per share) | ($0.52) | $0.56 |
Weighted average shares used to calculate earnings per common share: | ||
Basic (in shares) | 460,880 | 457,294 |
Diluted (in shares) | 460,880 | 457,674 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||
Net (loss) income | ($237,503) | $263,623 |
Change in net unrealized gains (losses) on securities: | ||
Unrealized gains (losses) | -5 | 3 |
Change in net unrealized gains (losses) on cash flow hedges: | ||
Unrealized gains (losses) | 2,339 | -695 |
Reclassification adjustment realized in net (loss) income | -6 | 605 |
Change in Supplemental Executive Retirement Plan obligation | 69 | 54 |
Foreign currency translation adjustment | -6,963 | -50 |
Total other comprehensive loss | -4,566 | -83 |
Total comprehensive (loss) income | -242,069 | 263,540 |
Total comprehensive income attributable to noncontrolling interests | -3,111 | -4,512 |
Total comprehensive (loss) income attributable to HCP, Inc. | ($245,180) | $259,028 |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Total Stockholders' Equity | Common Stock | Additional Paid-In Capital | Cumulative Dividends In Excess Of Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
In Thousands, unless otherwise specified | |||||||
Balance at Dec. 31, 2013 | $10,723,300 | $456,961 | $11,334,041 | ($1,053,215) | ($14,487) | $207,834 | $10,931,134 |
Balance (in shares) at Dec. 31, 2013 | 456,961 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | 259,111 | 259,111 | 4,512 | 263,623 | |||
Other comprehensive income (losses) | -83 | -83 | -83 | ||||
Issuance of common stock, net | 32,706 | 1,287 | 31,419 | -73 | 32,633 | ||
Issuance of common stock, net (in shares) | 1,287 | ||||||
Repurchase of common stock | -8,068 | -208 | -7,860 | -8,068 | |||
Repurchase of common stock (in shares) | -208 | ||||||
Exercise of stock options | 95 | 4 | 91 | 95 | |||
Exercise of stock options (in shares) | 4 | ||||||
Amortization of deferred compensation | 4,890 | 4,890 | 4,890 | ||||
Common dividends ($0.565 and $0.545 per share for the three months ended March 31, 2015 and 2014, respectively) | -250,198 | -250,198 | -250,198 | ||||
Distributions to noncontrolling interests | -3,975 | -3,975 | |||||
Issuance of noncontrolling interests | 1,193 | 1,193 | |||||
Purchase of noncontrolling interests | -1,671 | -1,671 | |||||
Balance at Mar. 31, 2014 | 10,761,753 | 458,044 | 11,362,581 | -1,044,302 | -14,570 | 207,820 | 10,969,573 |
Balance (in shares) at Mar. 31, 2014 | 458,044 | ||||||
Balance at Dec. 31, 2014 | 10,735,297 | 459,746 | 11,431,987 | -1,132,541 | -23,895 | 261,802 | 10,997,099 |
Balance (in shares) at Dec. 31, 2014 | 459,746 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | -240,614 | -240,614 | 3,111 | -237,503 | |||
Other comprehensive income (losses) | -4,566 | -4,566 | -4,566 | ||||
Issuance of common stock, net | 36,812 | 1,155 | 35,657 | -1,608 | 35,204 | ||
Issuance of common stock, net (in shares) | 1,155 | ||||||
Repurchase of common stock | -6,096 | -128 | -5,968 | -6,096 | |||
Repurchase of common stock (in shares) | -128 | ||||||
Exercise of stock options | 27,221 | 811 | 26,410 | 27,221 | |||
Exercise of stock options (in shares) | 811 | ||||||
Amortization of deferred compensation | 6,165 | 6,165 | 6,165 | ||||
Common dividends ($0.565 and $0.545 per share for the three months ended March 31, 2015 and 2014, respectively) | -260,686 | -260,686 | -260,686 | ||||
Distributions to noncontrolling interests | -263 | -263 | -3,861 | -4,124 | |||
Issuance of noncontrolling interests | 2,932 | 2,932 | |||||
Balance at Mar. 31, 2015 | $10,293,270 | $461,584 | $11,493,988 | ($1,633,841) | ($28,461) | $262,376 | $10,555,646 |
Balance (in shares) at Mar. 31, 2015 | 461,584 |
CONSOLIDATED_STATEMENTS_OF_EQU1
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $) | 0 Months Ended | 3 Months Ended | ||
Apr. 30, 2015 | Jan. 29, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||||
Common dividends, per share (in dollars per share) | $0.56 | $0.56 | $0.56 | $0.55 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net (loss) income | ($237,503) | $263,623 |
Depreciation and amortization of real estate, in-place lease and other intangibles: | ||
Depreciation and amortization of real estate, in-place lease and other intangibles | 114,522 | 107,388 |
Amortization of market lease intangibles, net | -378 | -168 |
Amortization of deferred compensation | 6,165 | 4,890 |
Amortization of deferred financing costs, net | 4,752 | 4,965 |
Straight-line rents | -9,546 | -13,968 |
Loan and direct financing lease interest accretion | 21,032 | 21,503 |
Deferred rental revenues | -902 | -145 |
Equity income from unconsolidated joint ventures | -13,601 | -14,528 |
Distributions of earnings from unconsolidated joint ventures | 1,159 | 2,430 |
Lease termination income, net | -1,103 | |
Gain on sales of real estate | -6,264 | -28,010 |
Marketable securities and other losses, net | 134 | 63 |
Impairments | 478,464 | |
Changes in: | ||
Accounts receivable, net | -3,814 | -1,045 |
Other assets | -5,839 | -8,942 |
Accounts payable and other accrued liabilities | -75,146 | -47,869 |
Net cash provided by operating activities | 230,068 | 247,181 |
Cash flows from investing activities: | ||
Acquisitions and pending acquisitions of real estate | -71,373 | -5,473 |
Development of real estate | -61,805 | -33,983 |
Leasing costs and tenant and capital improvements | -11,540 | -12,405 |
Proceeds from sales of real estate, net | 36,753 | |
Contributions to unconsolidated joint ventures | -27,279 | |
Distributions in excess of earnings from unconsolidated joint ventures | 1,022 | 772 |
Principal repayments on loans receivable | 17,496 | 3,133 |
Investments in loans receivable and other | -176,504 | -42,281 |
Decrease in restricted cash | 1,697 | 6,933 |
Net cash used in investing activities | -328,286 | -46,551 |
Cash flows from financing activities: | ||
Net repayments under bank line of credit | -455,506 | |
Borrowings under term loan | 333,014 | |
Issuance of senior unsecured notes | 595,110 | 350,000 |
Repayments of senior unsecured notes | -200,000 | -400,000 |
Repayments of mortgage and other secured debt | -6,354 | -162,739 |
Deferred financing costs | -7,687 | -9,239 |
Issuance of common stock and exercise of options | 62,425 | 32,728 |
Repurchase of common stock | -6,096 | -8,068 |
Dividends paid on common and preferred stock | -260,686 | -250,198 |
Issuance of noncontrolling interests | 1,626 | 41 |
Distributions to noncontrolling interests | -4,124 | -3,975 |
Net cash provided by (used in) financing activities | 51,722 | -451,450 |
Effect of foreign exchange on cash and cash equivalents | -144 | 2 |
Net increase (decrease) in cash and cash equivalents | -46,640 | -250,818 |
Cash and cash equivalents, beginning of year | 183,810 | 300,556 |
Cash and cash equivalents, end of year | $137,170 | $49,738 |
Business
Business | 3 Months Ended |
Mar. 31, 2015 | |
Business | |
Business | NOTE 1. Business |
HCP, Inc., a Standard & Poor’s (“S&P”) 500 company, together with its consolidated entities (collectively, “HCP” or the “Company”), invests primarily in real estate serving the healthcare industry in the United States (“U.S.”). The Company is a Maryland corporation organized in 1985 and qualifies as a self-administered real estate investment trust (“REIT”). The Company is headquartered in Irvine, California, with offices in Nashville, Los Angeles, San Francisco and London. The Company acquires, develops, leases, manages and disposes of healthcare real estate, and provides financing to healthcare providers. The Company’s diverse portfolio is comprised of investments in the following healthcare segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE 2. Summary of Significant Accounting Policies |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s estimates. | |
The consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries, joint ventures and VIEs that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). | |
Recent Accounting Pronouncements | |
In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs and requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability (consistent with debt discounts). ASU 2015-03 is effective for fiscal years, and interim periods within, beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of the adoption of ASU 2015-03 on January 1, 2016 to the Company’s consolidated financial position or results of operations. | |
In February 2015, the FASB issued Accounting Standards Update No. 2015-2, Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 requires amendments to both the variable interest entity and voting models. The amendments (i) rescind the indefinite deferral of certain aspects of accounting standards relating to consolidations and provide a permanent scope exception for registered money market funds and similar unregistered money market funds, (ii) modify (a) the identification of variable interests (fees paid to a decision maker or service provider), (b) the VIE characteristics for a limited partnership or similar entity and (c) the primary beneficiary determination under the VIE model, and (iii) eliminate the presumption within the current voting model that a general partner controls a limited partnership or similar entity. ASU 2015-02 is effective for fiscal years, and interim periods within, beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of the adoption of ASU 2015-02 on January 1, 2016 to the Company’s consolidated financial position or results of operations. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). This update changes the guidance for recognizing revenue. ASU 2014-09 provides guidance for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years and interim periods beginning after December 15, 2016, although on April 29, 2015, the FASB issued a proposal for public comment to defer the effective date by one year. Early adoption is permitted. The Company is evaluating the impact of the adoption of ASU 2014-09 on its current adoption date of January 1, 2017 to the Company’s consolidated financial position or results of operations. | |
Reclassification | |
Certain amounts in the Company’s consolidated financial statements have been reclassified for prior periods to conform to the current period presentation. As a result of the Company’s increasing transaction volume, “acquisition and pursuit costs” are separately presented on the consolidated statements of operations from “general and administrative expenses.” | |
Brookdale_Lease_Amendments_and
Brookdale Lease Amendments and Terminations and the Formation of Two RIDEA Joint Ventures (“Brookdale Transactionâ€) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Brookdale Lease Amendments and Terminations and the Formation of Two RIDEA Joint Ventures ("Brookdale Transaction") | ||||
Brookdale Lease Amendments and Terminations and the Formation of Two RIDEA Joint Ventures ("Brookdale Transaction") | NOTE 3. Brookdale Lease Amendments and Terminations and the Formation of Two RIDEA Joint Ventures (“Brookdale Transaction”) | |||
On July 31, 2014, Brookdale Senior Living (“Brookdale”) completed its acquisition of Emeritus Corporation (“Emeritus”). On August 29, 2014, the Company and Brookdale completed a multiple-element transaction with three major components: | ||||
· | amended existing lease agreements on 153 HCP-owned senior housing communities previously leased and operated by Emeritus, that included the termination of embedded purchase options in these leases relating to 30 properties and future rent reductions; | |||
· | terminated existing lease agreements on 49 HCP-owned senior housing properties previously leased and operated by Emeritus, that included the termination of embedded purchase options in these leases relating to 19 properties. At closing, the Company contributed 48 of these properties to a newly formed consolidated partnership that is operated under a structure permitted by the Housing and Economic Recovery Act of 2008 (commonly referred to as “RIDEA”) (“RIDEA Subsidiaries”); the 49th property was contributed on January 1, 2015. Brookdale owns a 20% noncontrolling equity interest in the RIDEA Subsidiaries and manages the facilities on behalf of the partnership; and | |||
· | entered into new unconsolidated joint ventures that own 14 campuses of continuing care retirement communities (“CCRC”) in a RIDEA structure (collectively, the “CCRC JV”) with the Company owning a 49% equity interest and Brookdale owning a 51% equity interest. Brookdale manages these communities on behalf of this partnership. | |||
Real_Estate_Property_Investmen
Real Estate Property Investments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Real Estate Property Investments | |||||||||||||||||
Real Estate Property Investments | NOTE 4. Real Estate Property Investments | ||||||||||||||||
2015 Acquisitions | |||||||||||||||||
A summary of real estate acquisitions for the three months ended March 31, 2015 follows (in thousands): | |||||||||||||||||
Consideration | Assets Acquired | ||||||||||||||||
Liabilities | Noncontrolling | Net | |||||||||||||||
Segment | Cash Paid | Assumed | Interest | Real Estate | Intangibles | ||||||||||||
Senior housing | $ | 34,068 | $ | 626 | $ | 1,306 | $ | 34,350 | $ | 1,650 | |||||||
Medical office | 180 | — | — | 180 | — | ||||||||||||
$ | 34,248 | $ | 626 | $ | 1,306 | $ | 34,530 | $ | 1,650 | ||||||||
Subsequent Acquisitions. In April 2015, the Company converted £174 million of its HC-One Facility (see Note 7) to fee ownership in a portfolio of 36 care homes located throughout the United Kingdom (“U.K.”). | |||||||||||||||||
Pending Acquisitions. In March 2015, HCP and Brookdale entered into a definitive agreement to acquire from Chartwell Retirement Residences a portfolio of 35 private pay senior housing communities, including two leasehold interests, representing 5,025 units (the “Chartwell Portfolio”) for $849 million. The Chartwell Portfolio will be acquired in a RIDEA structure and Brookdale will acquire a 10% noncontrolling interest. Brookdale has operated these communities since 2011 after its acquisition of Horizon Bay, and will continue to manage the communities post-closing under a long-term management agreement, which is cancellable under certain conditions subject to a fee if terminated within the next seven years. The Company made a deposit of $37 million related to this pending acquisition, which is included in other assets, net. The closing of this acquisition is expected in the third quarter of 2015 and remains subject to regulatory approvals and other customary closing conditions. | |||||||||||||||||
In April 2015, the Company acquired a medical office building (“MOB”) for $161 million. The MOB is located in Philadelphia, Pennsylvania. | |||||||||||||||||
In April 2015, the Company exercised its purchase option right from a $41 million development loan to acquire a newly developed assisted living and memory care facility in Germantown, Tennessee for $72 million. The facility will be managed by Brookdale and placed in a RIDEA structure with Brookdale acquiring a 10% noncontrolling interest. The Company expects to close this acquisition in the second quarter of 2015, subject to customary closing conditions. | |||||||||||||||||
2014 Acquisitions | |||||||||||||||||
A summary of real estate acquisitions for the three months ended March 31, 2014 follows (in thousands): | |||||||||||||||||
Consideration | Assets Acquired | ||||||||||||||||
Liabilities | Noncontrolling | ||||||||||||||||
Segment | Cash Paid | Assumed | Interest | Real Estate | |||||||||||||
Senior housing | $ | 5,473 | $ | 1 | $ | 1,152 | $ | 6,626 | |||||||||
Completed Developments | |||||||||||||||||
During the three months ended March 31, 2014, the Company placed in service the following: (i) two life science facilities, (ii) a medical office building and (iii) a post-acute/skilled nursing facility. These completed developments represent $25 million of gross real estate on the Company’s consolidated balance sheets as of December 31, 2014. There were no completed developments during the three months ended March 31, 2015. | |||||||||||||||||
Construction, Tenant and Other Capital Improvements | |||||||||||||||||
A summary of the Company’s funding for construction, tenant and other capital improvements follows (in thousands): | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
Segment | 2015 | 2014 | |||||||||||||||
Senior housing | $ | 16,172 | $ | 6,950 | |||||||||||||
Post-acute/skilled nursing | 1,960 | 2,381 | |||||||||||||||
Life science | 27,391 | 26,762 | |||||||||||||||
Medical office | 19,233 | 12,975 | |||||||||||||||
Hospital | 37 | — | |||||||||||||||
$ | 64,793 | $ | 49,068 | ||||||||||||||
Dispositions_of_Real_Estate_an
Dispositions of Real Estate and Discontinued Operations | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Dispositions of Real Estate and Discontinued Operations | |||||
Dispositions of Real Estate and Discontinued Operations | NOTE 5. Dispositions of Real Estate and Discontinued Operations | ||||
During the three months ended March 31, 2015, the Company sold eight senior housing facilities for $51 million resulting from Brookdale’s purchase option exercise it received as part of the Brookdale Transaction. | |||||
During the three months ended March 31, 2014, the Company sold two post-acute/skilled nursing facilities for $22 million and a hospital for $17 million. | |||||
The Company separately presented as discontinued operations the results of operations for all consolidated assets disposed of and all properties held for sale, if any, prior to the adoption of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, on April 1, 2014 (the “adoption date”). The amounts included in discontinued operations, for the three months March 31, 2014, represent the activity for properties sold prior to the adoption date. No properties sold subsequent to the adoption date met the new criteria for reporting discontinued operations. | |||||
The following table summarizes operating income from discontinued operations and gain on sales of real estate included in discontinued operations (dollars in thousands): | |||||
Three Months Ended March 31, 2014 | |||||
Rental and related revenues | $ | 1,810 | |||
Operating expenses | 54 | ||||
Other expenses, net | 20 | ||||
Income before gain on sales of real estate, net of income taxes | $ | 1,736 | |||
Gain on sales of real estate, net of income taxes | $ | 28,010 | |||
Number of properties included in discontinued operations | 3 | ||||
Net_Investment_in_Direct_Finan
Net Investment in Direct Financing Leases | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Net Investment in Direct Financing Leases | ||||||||||||||||
Net Investment in Direct Financing Leases | NOTE 6. Net Investment in Direct Financing Leases | |||||||||||||||
The components of net investment in direct financing leases (“DFLs”) consisted of the following (dollars in thousands): | ||||||||||||||||
March 31, | December 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Minimum lease payments receivable | $ | 26,825,121 | $ | 24,182,525 | ||||||||||||
Estimated residual values | 3,910,830 | 4,126,426 | ||||||||||||||
Less unearned income | -23,908,355 | -21,028,617 | ||||||||||||||
Net investment in direct financing leases | $ | 6,827,596 | $ | 7,280,334 | ||||||||||||
Properties subject to direct financing leases | 363 | 363 | ||||||||||||||
HCR ManorCare, Inc. | ||||||||||||||||
The Company acquired 334 post-acute, skilled nursing and assisted living facilities in its 2011 transaction with HCR ManorCare Inc. (“HCRMC”) and entered into a triple-net lease agreement (the “Master Lease”) with a subsidiary (“Lessee”) of HCRMC. | ||||||||||||||||
During the first quarter of 2015, the Company and HCRMC agreed to market for sale the real estate and operations associated with 50 non-strategic assets that are under the Master Lease. HCRMC will receive an annual rent reduction under the Master Lease based on 7.75% of the net sales proceeds received by HCP. The asset sales are expected to occur during the second half of 2015 and the first quarter of 2016. | ||||||||||||||||
On March 29, 2015, certain subsidiaries of the Company entered into an amendment to the Master Lease (the “HCRMC Lease Amendment”) effective April 1, 2015. The HCRMC Lease Amendment reduced initial annual rent by a net $68 million from $541 million to $473 million. Commencing on April 1, 2016, the minimum rent escalation shall be reset to 3.0% for each lease year through the expiration of the initial term of each applicable pool of facilities. Prior to the HCRMC Lease Amendment, rent payments would have increased 3.5% on April 1, 2015 and 2016 and 3.0% thereafter. The initial term was extended five years to an average of 16 years and the extension options’ aggregate terms remained the same. | ||||||||||||||||
As consideration for the rent reduction, the Company received a Deferred Rent Obligation from Lessee equal to an aggregate amount of $525 million, which was allocated into two tranches (i) a Tranche A Deferred Rent Obligation of $275 million and (ii) a Tranche B Deferred Rent Obligation of $250 million. Until the entire Tranche A Deferred Rent Obligation is paid in full, Lessee will make rental payments equal to 6.9% of its outstanding amount (representing $19 million) for the initial lease year (the “Tranche A Current Payment”) increased each year thereafter by 3.0%. Commencing on April 1, 2016, until the Tranche B Deferred Rent Obligation is paid in full, the outstanding principal balance of Tranche B Deferred Rent Obligation will be increased annually by (i) 3.0% initially, (ii) 4.0% commencing on April 1, 2019, (iii) 5.0% commencing on April 1, 2020, and (iv) 6.0% commencing on April 1, 2021 and for the remainder of its term. The Deferred Rent Obligation is due and payable on the earlier of (i) certain capital or liquidity events of HCRMC, including an IPO or sale, or (ii) March 31, 2029, which is not subject to any extensions. The HCRMC Lease Amendment also imposes certain restrictions on Lessee and HCRMC until the Deferred Rent Obligation is paid in full, including with respect to the payment of dividends and the transfer of interest in HCRMC. | ||||||||||||||||
Additionally, HCRMC agreed to sell, and HCP agreed to purchase, nine post-acute facilities for an aggregate purchase price of $275 million. The proceeds from the nine facilities will be used to reduce the Tranche A Deferred Rent Obligation as the sales are consummated. The closing of the sales of these facilities will be subject to certain customary conditions and approvals. If the closing with respect to any of these facilities has not occurred by April 1, 2016, the obligation to purchase any unsold facilities will terminate. Following the sale of a facility, Lessee will lease such facility from the Company pursuant to the Master Lease. The nine facilities will contribute an aggregate of $19 million of annual rent (subject to escalation) under the Master Lease. | ||||||||||||||||
During the three months ended March 31, 2015, the Company recorded a net impairment charge of $478 million related to its DFL investments with HCRMC. The impairment charge reduced the carrying value of the HCRMC DFL investments from $6.6 billion to $6.1 billion, based on the present value of the future lease payments effective April 1, 2015 under the HCRMC Lease Amendment discounted at the original DFL investments’ effective lease rate. There is no related allowance for credit losses recorded within the carrying value of the HCRMC DFL investments. | ||||||||||||||||
See Note 8 for additional discussion on the Company’s 9.4% equity interest in HCRMC and the U.S. Department of Justice action related to HCRMC. | ||||||||||||||||
Direct Financing Lease Internal Ratings | ||||||||||||||||
The following table summarizes the Company’s internal ratings for net investment in DFLs at March 31, 2015 (dollars in thousands): | ||||||||||||||||
Carrying | Percentage of DFL | Internal Ratings | ||||||||||||||
Investment Type | Amount | Portfolio | Performing DFLs | Watch List DFLs | Workout DFLs | |||||||||||
Senior housing | $ | 1,562,875 | 23 | $ | 1,193,903 | $ | 368,972 | $ | — | |||||||
Post-acute/skilled nursing | 5,140,830 | 75 | 5,140,830 | — | — | |||||||||||
Hospital | 123,891 | 2 | 123,891 | — | — | |||||||||||
$ | 6,827,596 | 100 | $ | 6,458,624 | $ | 368,972 | $ | — | ||||||||
Beginning September 30, 2013, the Company placed a 14-property senior housing DFL (the “DFL Portfolio”) on non-accrual status. The Company determined that the collection of all rental payments was and continues to be no longer reasonably assured; therefore, rental revenue for the DFL Portfolio is recognized on a cash basis. The Company re-assessed the DFL Portfolio for impairment on March 31, 2015 and determined that the DFL Portfolio was not impaired based on its belief that: (i) it was not probable that it will not collect all of the rental payments under the terms of the lease; and (ii) the fair value of the underlying collateral exceeded the DFL Portfolio’s carrying amount. The fair value of the DFL Portfolio was estimated based on a discounted cash flow model, the inputs to which are considered to be a Level 3 measurement within the fair value hierarchy. Inputs to this valuation model include real estate capitalization rates, industry growth rates and operating margins, some of which influence the Company’s expectation of future cash flows from the DFL Portfolio and, accordingly, the fair value of its investment. During the three months ended March 31, 2015 and 2014, the Company recognized DFL income of $4 million and $5 million, respectively, and received cash payments of $5 million and $6 million, respectively, from the DFL Portfolio. The carrying value of the DFL Portfolio was $369 million and $370 million at March 31, 2015 and December 31, 2014, respectively. At March 31, 2015, the Company continues to believe that the fair value of the underlying collateral is in excess of the carrying value of this DFL. | ||||||||||||||||
As a result of HCRMC related events, the Company reassessed the collectability of all contractual rent payments under the amended Master Lease. The Company has concluded that the collection of the amended rent payments is reasonably assured and has assigned an internal rating of “Performing” to its HCRMC DFL investments. | ||||||||||||||||
Loans_Receivable
Loans Receivable | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Loans Receivable. | ||||||||||||||||||||
Loans Receivable | NOTE 7. Loans Receivable | |||||||||||||||||||
The following table summarizes the Company’s loans receivable (in thousands): | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Real Estate | Other | Real Estate | Other | |||||||||||||||||
Secured | Secured | Total | Secured | Secured | Total | |||||||||||||||
Mezzanine | $ | — | $ | 930,587 | $ | 930,587 | $ | — | $ | 799,064 | $ | 799,064 | ||||||||
Other(1) | 122,514 | — | 122,514 | 135,363 | — | 135,363 | ||||||||||||||
Unamortized discounts, fees and costs | — | -14,413 | -14,413 | — | -14,056 | -14,056 | ||||||||||||||
Allowance for loan losses | — | -13,410 | -13,410 | — | -13,410 | -13,410 | ||||||||||||||
$ | 122,514 | $ | 902,764 | $ | 1,025,278 | $ | 135,363 | $ | 771,598 | $ | 906,961 | |||||||||
(1)Represents construction loans outstanding related to senior housing development projects. At March 31, 2015, the Company had $8 million remaining under its commitments to fund development projects. | ||||||||||||||||||||
Loans Receivable Internal Ratings | ||||||||||||||||||||
The following table summarizes the Company’s internal ratings for loans receivable at March 31, 2015 (dollars in thousands): | ||||||||||||||||||||
Carrying | Percentage of Loan | Internal Ratings | ||||||||||||||||||
Investment Type | Amount | Portfolio | Performing Loans | Watch List Loans | Workout Loans | |||||||||||||||
Real estate secured | $ | 122,514 | 12 | $ | 122,514 | $ | — | $ | — | |||||||||||
Other secured | 902,764 | 88 | 885,777 | — | 16,987 | |||||||||||||||
$ | 1,025,278 | 100 | $ | 1,008,291 | $ | — | $ | 16,987 | ||||||||||||
Other Secured Loans | ||||||||||||||||||||
HC-One Facility. In November 2014, the Company was the lead investor in the financing for Formation Capital and Safanad’s acquisition of NHP, a company that, at closing, owned 273 nursing and residential care homes representing over 12,500 beds in the U.K. principally operated by HC-One. The Company provided a loan facility (the “HC-One Facility”), secured by substantially all of NHP’s assets, totaling £395 million, with £363 million ($574 million) drawn at closing. The HC-One Facility has a five-year term and was initially funded by a £355 million draw on the Company’s revolving line of credit facility that is discussed in Note 11. In February 2015, the Company increased the HC-One Facility by £108 million ($164 million) to £502 million ($795 million), in conjunction with HC-One’s acquisition of Meridian Healthcare. | ||||||||||||||||||||
Tandem Health Care Loan. On July 31, 2012, the Company closed a mezzanine loan facility to lend up to $205 million to Tandem Health Care (“Tandem”), as part of the recapitalization of a post-acute/skilled nursing portfolio. The Company funded $100 million (the “First Tranche”) at closing and funded an additional $102 million (the “Second Tranche”) in June 2013. At March 31, 2015, the loans were subordinate to $435 million of senior mortgage debt. The loans bear interest at fixed rates of 12% and 14% per annum for the First and Second Tranches, respectively. This loan facility matures in October 2017, is prepayable at the borrower’s option and is secured by real estate partnership interests. The loans are subject to prepayment premiums if repaid on or before the third anniversary from the First Tranche closing date of July 31, 2012. | ||||||||||||||||||||
Delphis Operations, L.P. Loan. The Company holds a secured term loan made to Delphis Operations, L.P. (“Delphis” or the “Borrower”) that is collateralized by assets of the Borrower. The Borrower’s collateral is comprised primarily of a partnership interest in an operating surgical facility that leases a property owned by the Company. This loan is on cost recovery status and has an internal rating of “workout”. The carrying value of the loan, net of an allowance for loan losses, was $17 million at both March 31, 2015 and December 31, 2014. During the three months ended March 31, 2015, the Company received cash payments of $0.5 million from the Borrower. At both March 31, 2015 and December 31, 2014, the allowance related to the Company’s senior secured loan to Delphis was $13 million with no additional allowances recognized during the three months ended March 31, 2015 or the year ended December 31, 2014. At March 31, 2015, the Company believes the fair value of the collateral supporting this loan is in excess of its carrying value. | ||||||||||||||||||||
Subsequent Event. In April 2015, the Company converted £174 million of the HC-One Facility into a sale-leaseback transaction for 36 nursing and residential care homes located throughout the U.K. (see Note 4). | ||||||||||||||||||||
Investments_in_and_Advances_to
Investments in and Advances to Unconsolidated Joint Ventures | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Investments in and Advances to Unconsolidated Joint Ventures | |||||||||||
Investments in and Advances to Unconsolidated Joint Ventures | NOTE 8. Investments in and Advances to Unconsolidated Joint Ventures | ||||||||||
On March 30, 2015, the Company and MBK Senior Living (“MBK”), a subsidiary of Mitsui & Co. Ltd, formed a new RIDEA joint venture (“MBK JV”) that owns three senior housing facilities with the Company and MBK each owning a 50% equity interest. MBK manages these communities on behalf of the joint venture. The Company contributed $27 million of cash and MBK contributed the three senior housing facilities with a fair value of $126 million, which were encumbered by $78 million of mortgage debt at closing. The Company accounts for this joint venture as an equity method investment. | |||||||||||
The Company owns interests in the following entities that are accounted for under the equity method at March 31, 2015 (dollars in thousands): | |||||||||||
Entity(1) | Segment | Investment(2) | Ownership% | ||||||||
CCRC JV(3) (4) | senior housing | $ | 455,750 | 49 | |||||||
HCRMC | post-acute/skilled nursing | 51,649 | 9.4 | ||||||||
MBK JV | senior housing | 27,279 | 50 | ||||||||
HCP Ventures III, LLC | medical office | 6,658 | 30 | ||||||||
HCP Ventures IV, LLC(4) | medical office and hospital | 26,206 | 20 | ||||||||
HCP Life Science(5) | life science | 69,758 | 50 | – | 63 | ||||||
Suburban Properties, LLC | medical office | 5,312 | 67 | ||||||||
Advances to unconsolidated joint ventures, net | 183 | ||||||||||
$ | 642,795 | ||||||||||
Edgewood Assisted Living Center, LLC | senior housing | $ | -448 | 45 | |||||||
Seminole Shores Living Center, LLC | senior housing | -635 | 50 | ||||||||
$ | -1,083 | ||||||||||
-1 | These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures. | ||||||||||
-2 | Represents the carrying value of the Company’s investment in the unconsolidated joint ventures. Negative balances are recorded in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. | ||||||||||
-3 | Includes two unconsolidated joint ventures in a RIDEA structure: (i) “CCRC PropCo” and (ii) “CCRC OpCo”. | ||||||||||
-4 | Represents VIEs, see Note 17. | ||||||||||
-5 | 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 (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%). | ||||||||||
Summarized combined financial information for the Company’s unconsolidated joint ventures follows (in thousands): | |||||||||||
March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||
Real estate, net | $ | 5,230,958 | $ | 5,134,587 | |||||||
Goodwill and other assets, net | 5,048,919 | 4,986,310 | |||||||||
Total assets | $ | 10,279,877 | $ | 10,120,897 | |||||||
Capital lease obligations and debt | $ | 7,218,361 | $ | 7,197,940 | |||||||
Accounts payable | 1,093,859 | 1,015,912 | |||||||||
Other partners’ capital | 1,316,030 | 1,281,413 | |||||||||
HCP’s capital(1) | 651,627 | 625,632 | |||||||||
Total liabilities and partners’ capital | $ | 10,279,877 | $ | 10,120,897 | |||||||
-1 | The combined basis difference of the Company’s investments in these joint ventures of $10 million, as of March 31, 2015, is primarily attributable to goodwill, real estate, capital lease obligations, deferred tax assets and lease-related net intangibles. | ||||||||||
Three Months Ended March 31, | |||||||||||
2015 | 2014 | ||||||||||
Total revenues | $ | 1,166,454 | $ | 1,067,491 | |||||||
Income (loss) from discontinued operations | 1,100 | -2,600 | |||||||||
Net income | 9,783 | 7,996 | |||||||||
HCP’s share of earnings(1) | 13,601 | 14,528 | |||||||||
Fees earned by HCP | 460 | 449 | |||||||||
Distributions received by HCP | 2,181 | 3,202 | |||||||||
-1 | The Company’s joint venture interest in HCRMC is accounted for using the equity method and results in an ongoing elimination of DFL income proportional to HCP’s ownership in HCRMC. The elimination of the respective proportional lease expense at the HCRMC level in substance results in $16 million of DFL income that is recharacterized to the Company’s share of earnings from HCRMC (equity income from unconsolidated joint ventures) for both the three months ended March 31, 2015 and 2014. | ||||||||||
Subsequent Event. On April 20, 2015, the U.S. Department of Justice (“DOJ”) unsealed a previously filed complaint in the United States District Court for the Eastern District of Virginia against HCRMC and certain of its affiliates in three consolidated cases following a civil investigation arising out of three lawsuits filed by former employees of HCRMC under the qui tam provisions of the federal False Claims Act. The DOJ’s complaint in intervention is captioned United States of America, ex rel. Ribik, Carson, and Slough v. HCR ManorCare, Inc., ManorCare Inc., HCR ManorCare Services, LLC and Heartland Employment Services, LLC (Civil Action Numbers: 1:09cv13; 1:11cv1054; 1:14cv1228 (CMH/TCB)). The complaint alleges that HCRMC submitted claims to Medicare for therapy services that were not covered by the skilled nursing facility benefit, were not medically reasonable and necessary, and were not skilled in nature, and therefore not entitled to Medicare reimbursement. While this litigation is at an early stage and HCRMC has indicated that it believes the claims are unjust and it will vigorously defend against them, a significant adverse judgment against HCRMC or significant settlement obligation could impact the carrying value of the Company’s investments in HCRMC’s operations and/or DFLs investment further (see Note 6). | |||||||||||
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2015 | |
Intangibles | |
Intangibles | NOTE 9. Intangibles |
At March 31, 2015 and December 31, 2014, gross intangible lease assets, comprised of lease-up intangibles, above market tenant lease intangibles and below market ground lease intangibles, were $819 million and $830 million, respectively. At March 31, 2015 and December 31, 2014, the accumulated amortization of intangible assets was $361 million and $349 million, respectively. | |
At March 31, 2015 and December 31, 2014, gross intangible lease liabilities, comprised of below market lease intangibles and above market ground lease intangibles were $207 million and $209 million, respectively. At March 31, 2015 and December 31, 2014, the accumulated amortization of intangible liabilities was $127 million and $124 million, respectively. | |
Other_Assets
Other Assets | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Assets. | ||||||||
Other Assets | NOTE 10. Other Assets | |||||||
The Company’s other assets consisted of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Straight-line rent assets, net of allowance of $34,231 and $34,182, respectively | $ | 359,311 | $ | 355,864 | ||||
Marketable debt securities, net | 221,379 | 231,442 | ||||||
Leasing costs and inducements, net | 158,347 | 146,500 | ||||||
Deferred financing costs, net | 52,597 | 47,592 | ||||||
Goodwill | 50,346 | 50,346 | ||||||
Other | 166,917 | 108,428 | ||||||
Total other assets | $ | 1,008,897 | $ | 940,172 | ||||
At March 31, 2015, other assets include a $37 million deposit related to the pending Portfolio acquisition from Chartwell Retirement Residences (see Note 4). At March 31, 2015 and December 31, 2014, other assets include a non-interest bearing short-term receivable of $22 million and $26 million, respectively, from Brookdale payable in eight quarterly installments. At March 31, 2015 and December 31, 2014, other assets include a loan receivable of $17 million and $15 million, respectively, from HCP Ventures IV, LLC, an unconsolidated joint venture (see Note 8) with an interest rate of 12% which matures in May 2016. The loan is senior to equity distributions to the Company’s joint venture partner. | ||||||||
Marketable debt securities, net primarily represent senior unsecured notes that mature in June 2020 and are non-callable through June 2016. These senior unsecured notes are accounted for as marketable debt securities and classified as held-to-maturity. | ||||||||
Debt
Debt | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Debt | |||||||||||||||||
Debt | NOTE 11. Debt | ||||||||||||||||
Bank Line of Credit and Term Loans | |||||||||||||||||
The Company’s $2.0 billion unsecured revolving line of credit facility (the “Facility”) matures on March 31, 2018 and contains a one-year extension option. Borrowings under the Facility accrue interest at LIBOR plus a margin that depends upon the Company’s debt ratings. The Company pays a facility fee on the entire revolving commitment that depends on its debt ratings. Based on the Company’s debt ratings at March 31, 2015, the margin on the Facility was 0.925%, and the facility fee was 0.15%. The Facility also includes a feature that will allow the Company to increase the borrowing capacity by an aggregate amount of up to $500 million, subject to securing additional commitments from existing lenders or new lending institutions. At March 31, 2015, the Company had £242 million ($359 million) outstanding under the Facility with a weighted average effective interest rate of 1.72%. | |||||||||||||||||
On January 12, 2015, the Company entered into a credit agreement with a syndicate of banks for a £220 million ($327 million at March 31, 2015) four-year unsecured term loan (the “2015 Term Loan”) that accrues interest at a rate of GBP LIBOR plus 0.975%, subject to adjustments based on the Company’s credit ratings. Proceeds from this term loan were used to repay a £220 million draw on the Facility to fund the November 2014 HC-One debt investment (see Note 7). Concurrently, the Company entered into a three-year interest rate swap agreement that effectively fixes the interest rate of the 2015 Term Loan at 1.79% (see Note 20). The 2015 Term Loan contains a one-year committed extension option. | |||||||||||||||||
The Facility and term loans contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements, (i) limit the ratio of Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) limit the ratio of Secured Debt to Consolidated Total Asset Value to 30%, (iii) limit the ratio of Unsecured Debt to Consolidated Unencumbered Asset Value to 60% and (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times. The Facility and Term Loans also require a Minimum Consolidated Tangible Net Worth of $9.5 billion at March 31, 2015. At March 31, 2015, the Company was in compliance with each of these restrictions and requirements of the Facility and Term Loans. | |||||||||||||||||
Senior Unsecured Notes | |||||||||||||||||
At March 31, 2015, the Company had senior unsecured notes outstanding with an aggregate principal balance of $8.1 billion. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. The Company believes it was in compliance with these covenants at March 31, 2015. | |||||||||||||||||
The following table summarizes the Company’s senior unsecured note issuances for the periods presented (dollars in thousands): | |||||||||||||||||
Period | Amount | Coupon Rate | Maturity Date | Net Proceeds | |||||||||||||
Three months ending March 31, 2015: | |||||||||||||||||
21-Jan-15 | $ | 600,000 | 3.400 | % | 2025 | $ | 591,000 | ||||||||||
Year ending December 31, 2014: | |||||||||||||||||
14-Aug-14 | $ | 800,000 | 3.875 | % | 2024 | $ | 792,000 | ||||||||||
21-Feb-14 | $ | 350,000 | 4.200 | % | 2024 | $ | 346,000 | ||||||||||
The following table summarizes the Company’s senior unsecured notes payoffs for the periods presented (dollars in thousands): | |||||||||||||||||
Period | Amount | Coupon Rate | |||||||||||||||
Three months ending March 31, 2015: | |||||||||||||||||
1-Mar-15 | $ | 200,000 | 6.00 | % | |||||||||||||
Year ending December 31, 2014: | |||||||||||||||||
February 1, 2014 | $ | 400,000 | 2.70 | % | |||||||||||||
14-Jun-14 | $ | 62,000 | 6.00 | % | |||||||||||||
14-Jun-14 | $ | 25,000 | 3 Month LIBOR+0.9 | % | |||||||||||||
Mortgage Debt | |||||||||||||||||
At March 31, 2015, the Company had $981 million in aggregate principal amount of mortgage debt outstanding secured by 70 healthcare facilities (including redevelopment properties), which have a carrying value of $1.3 billion. At March 31, 2015, interest rates on the mortgage debt ranged from 0.42% to 8.38% with a weighted average effective interest rate of 6.15% and a weighted average maturity of three years. | |||||||||||||||||
Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets and is generally non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires maintenance of insurance on the assets and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt is also cross-collateralized by multiple assets and may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets. | |||||||||||||||||
Debt Maturities | |||||||||||||||||
The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at March 31, 2015 (in thousands): | |||||||||||||||||
Senior | |||||||||||||||||
Bank Line of | Unsecured | Mortgage | |||||||||||||||
Year | Credit(1) | Term Loans(2) | Notes(3) | Debt | Total(4) | ||||||||||||
2015 (Nine months) | $ | — | $ | — | $ | 200,000 | $ | 35,549 | $ | 235,549 | |||||||
2016 | — | 203,404 | 900,000 | 292,222 | 1,395,626 | ||||||||||||
2017 | — | — | 750,000 | 581,891 | 1,331,891 | ||||||||||||
2018 | 358,555 | — | 600,000 | 6,583 | 965,138 | ||||||||||||
2019 | — | 326,634 | 450,000 | 2,072 | 778,706 | ||||||||||||
Thereafter | — | — | 5,150,000 | 63,170 | 5,213,170 | ||||||||||||
358,555 | 530,038 | 8,050,000 | 981,487 | 9,920,080 | |||||||||||||
Discounts, net | — | — | -27,467 | -1,597 | -29,064 | ||||||||||||
$ | 358,555 | $ | 530,038 | $ | 8,022,533 | $ | 979,890 | $ | 9,891,016 | ||||||||
(1) Represents £242 million translated into U.S. dollars. | |||||||||||||||||
(2) Represents £357 million translated into U.S. dollars. | |||||||||||||||||
(3) Interest rates on the notes ranged from 2.79% to 6.99% with a weighted average effective interest rate of 4.82% and a weighted average maturity of six years. | |||||||||||||||||
(4) Excludes $96 million of other debt that represents Life Care Bonds and Demand Notes that have no scheduled maturities. | |||||||||||||||||
Other Debt | |||||||||||||||||
At March 31, 2015, the Company had $70 million of non-interest bearing life care bonds at two of its continuing care retirement communities and non-interest bearing occupancy fee deposits at two of its senior housing facilities, all of which were payable to certain residents of the facilities (collectively, “Life Care Bonds”). The Life Care Bonds are generally refundable to the residents upon the termination of the contract or upon the successful resale of the unit. | |||||||||||||||||
In conjunction with the Brookdale Transaction, on August 29, 2014, the Company borrowed $26 million from the CCRC JV in the form of on-demand notes (“Demand Notes”). The Demand Notes bear interest at a rate of 4.5%. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies. | |
Commitments and Contingencies | NOTE 12. Commitments and Contingencies |
Legal Proceedings | |
From time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s business, prospects, financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred. | |
Liquidity Support Arrangement | |
The Company has a 20% equity investment in an unconsolidated joint venture, HCP Ventures IV, LLC (“HCP Ventures IV”), which has $107 million of contractual secured debt obligations (“Contractual Obligations”) coming due through February 2016. In the event HCP Ventures IV is (i) unable to refinance these Contractual Obligations with third party lenders or (ii) the equity members do not jointly agree to make additional capital contributions to repay such Contractual Obligations, the Company has committed to provide the necessary level of financial support in the form of a shortfall loan to enable HCP Ventures IV to repay such Contractual Obligations. Additionally, the Company has committed to fund, in the form of a shortfall loan, up to $24.5 million for prior and future capital expenditures of which $17 million has been funded as of March 31, 2015 and included in other assets, net. This liquidity support arrangement is permitted under the joint venture agreement between members, and any such funding will earn an interest rate equal to 12% per annum from the date actually advanced until the date it is repaid in full (see Notes 8, 10 and 17). | |
Equity
Equity | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Equity | |||||||||
Equity | NOTE 13. Equity | ||||||||
Common Stock | |||||||||
The following table lists the common stock cash dividends declared by the Company in 2015: | |||||||||
Amount | Dividend | ||||||||
Declaration Date | Record Date | Per Share | Payable Date | ||||||
January 29 | February 9 | $ | 0.565 | February 24 | |||||
April 30 | 11-May | 0.565 | 26-May | ||||||
The following is a summary of the Company’s common stock issuances (shares in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Dividend Reinvestment and Stock Purchase Plan | 829 | 875 | |||||||
Conversion of DownREIT units(1) | 38 | 2 | |||||||
Exercise of stock options | 811 | 4 | |||||||
Vesting of restricted stock units | 288 | 411 | |||||||
Repurchase of common stock | 128 | 208 | |||||||
(1) Non-managing member LLC units. | |||||||||
Accumulated Other Comprehensive Loss | |||||||||
The following is a summary of the Company’s accumulated other comprehensive loss (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Cumulative foreign currency translation adjustment | $ | -17,710 | $ | -10,747 | |||||
Unrealized losses on cash flow hedges, net | -7,291 | -9,624 | |||||||
Supplemental Executive Retirement Plan minimum liability | -3,468 | -3,537 | |||||||
Unrealized gains on available for sale securities | 8 | 13 | |||||||
Total accumulated other comprehensive loss | $ | -28,461 | $ | -23,895 | |||||
Noncontrolling Interests | |||||||||
At March 31, 2015, non-managing members held an aggregate of 4 million units in five limited liability companies (“DownREITs”), for which the Company is the managing member. At March 31, 2015, the carrying and fair values of these DownREIT units were $187 million and $261 million, respectively. | |||||||||
Segment_Disclosures
Segment Disclosures | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Segment Disclosures | |||||||||||||||||||||||
Segment Disclosures | NOTE 14. Segment Disclosures | ||||||||||||||||||||||
The Company evaluates its business and makes resource allocations based on its five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the medical office segment, the Company invests through the acquisition and development of MOBs, which generally require a greater level of property management. Otherwise, the Company primarily invests, through the acquisition and development of real estate, in single tenant and operator properties and debt issued by tenants and operators in these sectors. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements herein and in the Company’s 2014 Annual Report on Form 10-K filed with the SEC. There were no intersegment sales or transfers during the three months ended March 31, 2015 and 2014. The Company evaluates performance based upon property net operating income from continuing operations (“NOI”), adjusted NOI (cash NOI) and interest income of the combined investments in each segment. | |||||||||||||||||||||||
Non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, deferred financing costs and, if any, real estate held for sale. Interest expense, depreciation and amortization, and non-property specific revenues and expenses are not allocated to individual segments in determining the Company’s segment-level performance. See Note 18 for other information regarding concentrations of credit risk. | |||||||||||||||||||||||
Summary information for the reportable segments follows (in thousands): | |||||||||||||||||||||||
For the three months ended March 31, 2015: | |||||||||||||||||||||||
Investment | |||||||||||||||||||||||
Rental | Resident Fees | Interest | Management | Total | Adjusted | ||||||||||||||||||
Segments | Revenues(1) | and Services | Income | Fee Income | Revenues | NOI(2) | (Cash) NOI(2) | ||||||||||||||||
Senior housing | $ | 127,382 | $ | 105,013 | $ | 7,394 | $ | — | $ | 239,789 | $ | 156,885 | $ | 150,472 | |||||||||
Post-acute/skilled | 140,576 | — | 25,868 | — | 166,444 | 140,043 | 121,960 | ||||||||||||||||
Life science | 83,551 | — | — | 1 | 83,552 | 66,852 | 63,777 | ||||||||||||||||
Medical office | 98,305 | — | — | 459 | 98,764 | 60,053 | 58,187 | ||||||||||||||||
Hospital | 22,242 | — | — | — | 22,242 | 21,205 | 21,457 | ||||||||||||||||
Total | $ | 472,056 | $ | 105,013 | $ | 33,262 | $ | 460 | $ | 610,791 | $ | 445,038 | $ | 415,853 | |||||||||
For the three months ended March 31, 2014: | |||||||||||||||||||||||
Investment | |||||||||||||||||||||||
Rental | Resident Fees | Interest | Management | Total | Adjusted | ||||||||||||||||||
Segments | Revenues(1) | and Services | Income | Fee Income | Revenues | NOI(2) | (Cash) NOI(2) | ||||||||||||||||
Senior housing | $ | 150,085 | $ | 38,053 | $ | 3,284 | $ | — | $ | 191,422 | $ | 163,590 | $ | 150,375 | |||||||||
Post-acute/skilled | 137,780 | — | 13,412 | — | 151,192 | 137,248 | 118,099 | ||||||||||||||||
Life science | 76,122 | — | — | 1 | 76,123 | 61,961 | 58,829 | ||||||||||||||||
Medical office | 89,262 | — | — | 448 | 89,710 | 53,746 | 53,029 | ||||||||||||||||
Hospital | 21,545 | — | — | — | 21,545 | 20,595 | 20,661 | ||||||||||||||||
Total | $ | 474,794 | $ | 38,053 | $ | 16,696 | $ | 449 | $ | 529,992 | $ | 437,140 | $ | 400,993 | |||||||||
-1 | Represents rental and related revenues, tenant recoveries and income from DFLs. | ||||||||||||||||||||||
-2 | NOI and Adjusted NOI are non-GAAP supplemental financial measures used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expense; NOI excludes all other financial statement amounts included in net (loss) income as presented below. The Company believes NOI provides 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 after eliminating the effects of straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees. Adjusted NOI is oftentimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. The Company believes that net (loss) income is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net (loss) income as defined by GAAP because it does not reflect various excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI. | ||||||||||||||||||||||
The following is a reconciliation of reported net (loss) income to NOI and adjusted NOI (in thousands): | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Net (loss) income | $ | -237,503 | $ | 263,623 | |||||||||||||||||||
Interest income | -33,262 | -16,696 | |||||||||||||||||||||
Investment management fee income | -460 | -449 | |||||||||||||||||||||
Interest expense | 116,780 | 106,638 | |||||||||||||||||||||
Depreciation and amortization | 114,522 | 107,388 | |||||||||||||||||||||
General and administrative | 24,773 | 20,899 | |||||||||||||||||||||
Acquisition and pursuit costs | 3,390 | 495 | |||||||||||||||||||||
Impairments | 478,464 | — | |||||||||||||||||||||
Gains on sales of real estate, net of income taxes | -6,264 | — | |||||||||||||||||||||
Other income, net | -1,724 | -1,930 | |||||||||||||||||||||
Income taxes (benefit) provision | -77 | 1,446 | |||||||||||||||||||||
Equity income from unconsolidated joint ventures | -13,601 | -14,528 | |||||||||||||||||||||
Total discontinued operations | — | -29,746 | |||||||||||||||||||||
NOI | 445,038 | 437,140 | |||||||||||||||||||||
Straight-line rents | -9,546 | -13,968 | |||||||||||||||||||||
DFL accretion | -20,304 | -21,422 | |||||||||||||||||||||
Amortization of above and below market lease intangibles, net | -378 | -168 | |||||||||||||||||||||
Lease termination fees | 1,043 | -578 | |||||||||||||||||||||
NOI adjustments related to discontinued operations | — | -11 | |||||||||||||||||||||
Adjusted (Cash) NOI | $ | 415,853 | $ | 400,993 | |||||||||||||||||||
The Company’s total assets by segment were (in thousands): | |||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||
Segments | 2015 | 2014 | |||||||||||||||||||||
Senior housing | $ | 8,445,616 | $ | 8,383,345 | |||||||||||||||||||
Post-acute/skilled nursing | 6,488,822 | 6,875,122 | |||||||||||||||||||||
Life science | 4,171,320 | 4,154,789 | |||||||||||||||||||||
Medical office | 2,997,583 | 2,988,888 | |||||||||||||||||||||
Hospital | 639,807 | 640,253 | |||||||||||||||||||||
Gross segment assets | 22,743,148 | 23,042,397 | |||||||||||||||||||||
Accumulated depreciation and amortization | -2,680,584 | -2,600,072 | |||||||||||||||||||||
Net segment assets | 20,062,564 | 20,442,325 | |||||||||||||||||||||
Other non-segment assets | 961,878 | 927,615 | |||||||||||||||||||||
Total assets | $ | 21,024,442 | $ | 21,369,940 | |||||||||||||||||||
At both March 31, 2015 and December 31, 2014, goodwill of $50 million was allocated to segment assets as follows: (i) senior housing—$31 million, (ii) post-acute/skilled nursing—$3 million, (iii) medical office—$11 million, and (iv) hospital—$5 million. | |||||||||||||||||||||||
Earnings_Per_Common_Share
Earnings Per Common Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Common Share | ||||||||
Earnings Per Common Share | NOTE 15. Earnings Per Common Share | |||||||
The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator | ||||||||
(Loss) income from continuing operations | $ | -237,503 | $ | 233,877 | ||||
Noncontrolling interests’ share in continuing operations | -3,111 | -3,335 | ||||||
(Loss) income from continuing operations applicable to HCP, Inc. | -240,614 | 230,542 | ||||||
Participating securities’ share in continuing operations | -335 | -1,064 | ||||||
(Loss) income from continuing operations applicable to common shares | -240,949 | 229,478 | ||||||
Discontinued operations | — | 29,746 | ||||||
Noncontrolling interests’ share in discontinued operations | — | -1,177 | ||||||
Net (loss) income applicable to common shares | $ | -240,949 | $ | 258,047 | ||||
Denominator | ||||||||
Basic weighted average common shares | 460,880 | 457,294 | ||||||
Dilutive potential common shares | — | 380 | ||||||
Diluted weighted average common shares | 460,880 | 457,674 | ||||||
Basic earnings per common share | ||||||||
(Loss) income from continuing operations | $ | -0.52 | $ | 0.50 | ||||
Discontinued operations | — | 0.06 | ||||||
Net (loss) income applicable to common shares | $ | -0.52 | $ | 0.56 | ||||
Diluted earnings per common share | ||||||||
(Loss) income from continuing operations | $ | -0.52 | $ | 0.50 | ||||
Discontinued operations | — | 0.06 | ||||||
Net (loss) income applicable to common shares | $ | -0.52 | $ | 0.56 | ||||
Restricted stock and certain of the Company’s performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, which requires the use of the two-class method when computing basic and diluted earnings per share. Options to purchase approximately 0.5 million and 1.6 million shares of common stock that had an exercise price (including deferred compensation expense) in excess of the average closing market price of the Company’s common stock during the three months ended March 31, 2015 and 2014, respectively, were not included in the Company’s earnings per share calculations because they are anti-dilutive. Restricted stock and performance restricted stock units representing 0.4 million and 0.9 million shares of common stock during the three months ended March 31, 2015 and 2014, respectively, were not included because they are anti-dilutive. Additionally, 6 million shares issuable upon conversion of 4 million DownREIT units during the three months ended March 31, 2015 and 2014 were not included because they are anti-dilutive. | ||||||||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Cash Flow Information | ||||||||
Supplemental Cash Flow Information | NOTE 16. Supplemental Cash Flow Information | |||||||
The following table provides supplemental cash flow information (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Supplemental cash flow information: | ||||||||
Interest paid, net of capitalized interest | $ | 168,165 | $ | 152,423 | ||||
Income taxes paid | 383 | 629 | ||||||
Capitalized interest | 1,698 | 3,125 | ||||||
Supplemental schedule of non-cash investing activities: | ||||||||
Accrued construction costs | 32,236 | 21,715 | ||||||
Supplemental schedule of non-cash financing activities: | ||||||||
Vesting of restricted stock units | 288 | 411 | ||||||
Cancellation of restricted stock | — | -1 | ||||||
Conversion of non-managing member units into common stock | 1,608 | 73 | ||||||
Noncontrolling interest issued in connection with real estate acquisition | 1,306 | 1,152 | ||||||
Noncontrolling interest assumed in connection with real estate disposition | — | 1,671 | ||||||
Mortgages and other liabilities assumed with real estate acquisitions | 626 | 1 | ||||||
Unrealized gains (losses) on available-for-sale securities and derivatives designated as cash flow hedges, net | 2,334 | -692 | ||||||
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Variable Interest Entities | ||||||||||
Variable Interest Entities | NOTE 17. Variable Interest Entities | |||||||||
Unconsolidated Variable Interest Entities | ||||||||||
At March 31, 2015, the Company had investments in: (i) two unconsolidated VIE joint ventures; (ii) 48 properties leased to VIE tenants; (iii) a loan to a VIE borrower; and (iv) marketable debt securities of a VIE borrower. The Company has determined that it is not the primary beneficiary of these VIEs. The Company does not consolidate these VIEs because it does not have the ability to control the activities that most significantly impact these VIEs’ economic performance. Except for the Company’s equity interest in the unconsolidated joint ventures (CCRC OpCo and HCP Ventures IV discussed below), the Company has no formal involvement in these VIEs beyond its investments. | ||||||||||
The Company holds an equity interest in CCRC OpCo that has been identified as a VIE (see Notes 3 and 8). The equity members of CCRC OpCo “lack power” because they share certain operating rights with Brookdale as manager of the CCRCs. The assets of CCRC OpCo primarily consist of the CCRCs that it owns and leases, resident fees receivable, notes receivable, and cash and cash equivalents; its obligations primarily consist of operating lease obligations and accounts payable and expense accruals associated with the cost of its CCRCs’ operations. Assets generated by the CCRC operations (primarily rents from CCRC residents) of CCRC OpCo may only be used to settle its contractual obligations (primarily the rental costs and operating expenses incurred to manage such facilities). | ||||||||||
In the first quarter of 2015, upon the occurrence of a reconsideration event, it was determined that HCP Ventures IV is a VIE because this entity is “thinly capitalized.” The assets of HCP Ventures IV primarily consist of MOBs and hospitals that it owns and leases, intangible assets, straight-line rents receivable, and cash and cash equivalents; its obligations primarily consist of mortgage debt, member loans, intangible liabilities, deferred revenue, and accounts payable and accrued liabilities associated with the cost of its rental properties. Assets generated by the operations (primarily rental revenues) of HCP Ventures IV may only be used to settle its contractual obligations (primarily operating expenses). | ||||||||||
The Company leases 48 properties to a total of seven tenants that have been identified as VIEs (“VIE tenants”) because these VIE tenants are “thinly capitalized” entities that rely on the operating cash flows generated from the senior housing facilities to pay operating expenses, including the rent obligations under their leases. | ||||||||||
The Company holds an interest-only, senior secured term loan made to a borrower (Delphis Operations, L.P.) that has been identified as a VIE because it is a “thinly capitalized” entity (see Note 7). The loan is collateralized by all of the assets of the borrower (comprised primarily of interests in partnerships that operate surgical facilities, of which one partnership is a tenant of the Company). | ||||||||||
The Company holds commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (“Freddie MAC”) through a special purpose entity that has been identified as a VIE. The CMBS issued by the VIE are backed by mortgage obligations on senior housing facilities. | ||||||||||
The classification of the related assets and liabilities and their maximum loss exposure as a result of the Company’s involvement with these VIEs at March 31, 2015 are presented below (in thousands): | ||||||||||
Maximum Loss | Carrying | |||||||||
VIE Type | Exposure(1) | Asset/Liability Type | Amount | |||||||
CCRC OpCo | $ | 245,321 | Investments in unconsolidated joint ventures | $ | 245,321 | |||||
HCP Ventures IV | 157,706 | Investments in unconsolidated joint ventures | 26,206 | |||||||
VIE tenants—operating leases | 12,341 | Lease intangibles, net and straight-line rent receivables | 12,341 | |||||||
VIE tenants—DFLs | 599,414 | Net investment in DFLs | 599,414 | |||||||
Loan—senior secured | 16,987 | Loans receivable, net | 16,987 | |||||||
CMBS | 17,546 | Marketable debt securities | 17,546 | |||||||
-1 | The Company’s maximum loss exposure related to CCRC OpCo, VIE tenants, and loans and marketable debt securities to VIE borrowers represents the aggregate carrying amount of such investments. The Company’s maximum loss exposure related to HCP Ventures IV represents the aggregate carrying amount of its investment plus $107 million in committed support, which may be mitigated by the refinancing of HCP Ventures IV’s Contractual Obligations which it expects to occur as such debt becomes due in late 2015 and early 2016 (see Note 12). | |||||||||
With the exception of HCP Ventures IV, as of March 31, 2015, the Company has not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including circumstances in which it could be exposed to further losses (e.g., cash shortfalls). At March 31, 2015, the Company has funded a loan of $17 million to HCP Ventures IV. HCP Ventures IV has $107 million of Contractual Obligations coming due through February 2016. The Company has committed to provide the necessary level of financial support, in the form of a shortfall loan, to HCP Ventures IV in the event the joint venture is (i) unable to refinance its Contractual Obligations with third party lenders or (ii) the equity members do not jointly agree to make additional capital contributions to repay its Contractual Obligations. See Notes 3, 6, 7, 8, 10 and 12 for additional descriptions of the nature, purpose and operating activities of the Company’s unconsolidated VIEs and interests therein. | ||||||||||
Consolidated Variable Interest Entities | ||||||||||
RIDEA 1. The Company holds a 90% ownership interest in a joint venture entity formed in September 2011 that operates senior housing properties in a RIDEA structure (“RIDEA OpCo”). The Company consolidates RIDEA OpCo as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of RIDEA OpCo primarily consist of leasehold interests in senior housing facilities (operating leases), resident fees receivable, and cash and cash equivalents; its obligations primarily consist of lease payments to a non-VIE consolidated subsidiary of the Company and operating expenses of its senior housing facilities (accounts payable and accrued expenses). Assets generated by the senior housing operations (primarily senior housing resident rents) of RIDEA OpCo may only be used to settle its contractual obligations (primarily the rental costs and operating expenses incurred to manage such facilities). | ||||||||||
RIDEA 2. The Company holds an 80% equity interest in joint venture entities that own and operate senior housing properties in the RIDEA Subsidiaries. The Company consolidates the RIDEA Subsidiaries (SH PropCo and SH OpCo) as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIEs’ economic performance. The assets of SH PropCo primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of a note payable to a non-VIE consolidated subsidiary of the Company. The assets of SH OpCo primarily consist of leasehold interests in senior housing facilities (operating leases), resident fees receivable, and cash and cash equivalents; its obligations primarily consist of lease payments to SH PropCo and operating expenses of its senior housing facilities (accounts payable and accrued expenses). Assets generated by the senior housing operations (primarily senior housing resident rents) of the RIDEA Subsidiaries may only be used to settle its contractual obligations (primarily the rental costs and operating expenses incurred to manage such facilities). | ||||||||||
Other consolidated VIEs. The Company made a loan to an entity that entered into a tax credit structure (“Tax Credit Subsidiary”) and a loan to an entity that made an investment in a development joint venture (“Development JV”) both of which are considered VIEs. The Company consolidates the Tax Credit Subsidiary and Development JV because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the VIEs’ economic performance. The assets and liabilities of the Tax Credit Subsidiary and Development JV substantially consist of development in progress, notes receivable, prepaid expenses, notes payable, and accounts payable and accrued liabilities generated from their operating activities. Assets generated by the operating activities of the Tax Credit Subsidiary and Development JV may only be used to settle their contractual obligations. | ||||||||||
Concentration_of_Credit_Risk
Concentration of Credit Risk | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Concentration of Credit Risk | ||||||||||
Concentration of Credit Risk | NOTE 18. Concentration of Credit Risk | |||||||||
Concentrations of credit risk arise when one or more tenants, operators or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company regularly monitors various segments of its portfolio to assess potential concentrations of risks. The Company does not have significant foreign operations. | ||||||||||
The following table provides information regarding the Company’s concentrations with respect to certain tenants and operators; the information provided is presented for the gross assets and revenues that are associated with certain tenants and operators as percentages of their respective segment’s and total Company’s gross assets and revenues: | ||||||||||
The following table lists the Company’s senior housing concentrations: | ||||||||||
Percentage of | Percentage of | |||||||||
Senior Housing Gross Assets | Senior Housing Revenues | |||||||||
March 31, | December 31, | Three Months Ended March 31, | ||||||||
Operators | 2015 | 2014 | 2015 | 2014 | ||||||
Brookdale(1) | 32 | % | 36 | % | 25 | % | 46 | % | ||
HCRMC | 11 | % | 11 | % | 8 | % | 10 | % | ||
The following table lists the Company’s post-acute/skilled nursing concentrations: | ||||||||||
Percentage of Post-Acute/ | Percentage of Post-Acute/ | |||||||||
Skilled Nursing Gross Assets | Skilled Nursing Revenues | |||||||||
March 31, | December 31, | Three Months Ended March 31, | ||||||||
Operators | 2015 | 2014 | 2015 | 2014 | ||||||
HCRMC | 79 | % | 82 | % | 80 | % | 86 | % | ||
The following table lists the total Company concentrations: | ||||||||||
Percentage of | Percentage of | |||||||||
Total Company Assets | Total Company Revenues | |||||||||
March 31, | December 31, | Three Months Ended March 31, | ||||||||
Operators | 2015 | 2014 | 2015 | 2014 | ||||||
HCRMC | 29 | % | 31 | % | 25 | % | 28 | % | ||
Brookdale(1) | 13 | % | 13 | % | 10 | % | 17 | % | ||
-1 | On July 31, 2014, Brookdale completed its acquisition of Emeritus. These percentages of segment revenues and total revenues for the three months ended March 31, 2014 are prepared on a pro forma basis to reflect the combined concentration for Brookdale and Emeritus, as if the merger had occurred as of the beginning of the period presented. On August 29, 2014, the Company and Brookdale amended or terminated all former leases with Emeritus and entered into two RIDEA joint ventures (see Note 3). Percentages do not include senior housing facilities that Brookdale manages (is not a tenant) under a RIDEA structure. | |||||||||
HCRMC’s summarized consolidated financial information follows (in millions): | ||||||||||
March 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
Real estate and other property, net | $ | 2,915.4 | $ | 2,934.4 | ||||||
Cash and cash equivalents | 141.6 | 127.9 | ||||||||
Goodwill, intangible and other assets, net | 4,646.1 | 4,621.7 | ||||||||
Total assets | $ | 7,703.1 | $ | 7,684.0 | ||||||
Debt and financing obligations | $ | 6,071.0 | $ | 6,108.3 | ||||||
Accounts payable, accrued liabilities and other | 975.6 | 932.7 | ||||||||
Total equity | 656.5 | 643.0 | ||||||||
Total liabilities and equity | $ | 7,703.1 | $ | 7,684.0 | ||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Revenues | $ | 1,054.0 | $ | 1,041.9 | ||||||
Operating, general and administrative expense | -897.9 | -888.8 | ||||||||
Depreciation and amortization expense | -35.9 | -35.2 | ||||||||
Interest expense | -100.3 | -102.3 | ||||||||
Other income, net | 2.8 | 2.9 | ||||||||
Income from continuing operations before income tax expense | 22.7 | 18.5 | ||||||||
Income tax expense | -10.1 | -7.5 | ||||||||
Income from continuing operations | 12.6 | 11.0 | ||||||||
Income (loss) from discontinued operations, net of taxes | 1.1 | -2.6 | ||||||||
Net income | $ | 13.7 | $ | 8.4 | ||||||
As of March 31, 2015, Brookdale provided comprehensive property management and accounting services with respect to 70 of the Company’s senior housing facilities and 14 CCRCs owned by the CCRC JV, for which the Company or joint venture pays annual management fees pursuant to long-term management agreements. Most of the management agreements have terms ranging from 10 to 15 years, with 5-year renewals. The base management fees are 4.5% to 5.0% of gross revenues (as defined) generated by the RIDEA facilities. In addition, there are incentive management fees payable to Brookdale if operating results of the RIDEA properties exceed pre-established EBITDAR (as defined) thresholds. | ||||||||||
Brookdale is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. The information related to Brookdale contained or referred to in this report has been derived from SEC filings made by Brookdale or other publicly available information, or was provided to the Company by Brookdale, and the Company has not verified this information through an independent investigation or otherwise. The Company has no reason to believe that this information is inaccurate in any material respect, but the Company cannot assure the reader of its accuracy. The Company is providing this data for informational purposes only and encourages the reader to obtain Brookdale’s publicly available filings, which can be found on the SEC’s website at www.sec.gov. | ||||||||||
To mitigate the credit risk of leasing properties to certain senior housing and post-acute/skilled nursing operators, leases with operators are often combined into portfolios that contain cross-default terms, so that if a tenant of any of the properties in a portfolio defaults on its obligations under its lease, the Company may pursue its remedies under the lease with respect to any of the properties in the portfolio. Certain portfolios also contain terms whereby the net operating profits of the properties are combined for the purpose of securing the funding of rental payments due under each lease. | ||||||||||
Subsequent Event. The DOJ filed a complaint against HCRMC that was released from seal on April 20, 2015 (see Note 8). | ||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair Value Measurements | NOTE 19. Fair Value Measurements | |||||||||||||
Items Measured at Fair Value on a Recurring Basis | ||||||||||||||
The following table illustrates the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2015 in the consolidated balance sheets (in thousands): | ||||||||||||||
Financial Instrument(1) | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable equity securities | $ | 38 | $ | 38 | $ | — | $ | — | ||||||
Interest-rate swap liabilities | -7,820 | — | -7,820 | — | ||||||||||
Currency swap assets | 3,603 | — | 3,603 | — | ||||||||||
Warrants | 3,004 | — | — | 3,004 | ||||||||||
$ | -1,175 | $ | 38 | $ | -4,217 | $ | 3,004 | |||||||
-1 | Interest rate and currency swaps, as well as common stock warrant fair values, are determined based on observable and unobservable market assumptions utilizing standardized derivative pricing models. | |||||||||||||
Recognized gains and losses are recorded in other income, net on the Company’s consolidated statements of operations. During the three months ended March 31, 2015, there were no transfers of financial assets or liabilities within the fair value hierarchy. | ||||||||||||||
Disclosures About Fair Value of Financial Instruments | ||||||||||||||
Cash and cash equivalents, restricted cash, accounts receivable net, and accounts payable and accrued liabilities – The carrying values are reasonable estimates of fair value because of the short-term maturities of these instruments. | ||||||||||||||
Loans receivable, net and mortgage debt – The fair values are based on discounting future cash flows utilizing current market rates for loans and debt of the same type and remaining maturity. | ||||||||||||||
Marketable debt securities – The fair value is based on quoted prices from inactive markets. | ||||||||||||||
Marketable equity securities and senior unsecured notes – The fair values are based on quoted prices in active markets. | ||||||||||||||
Warrants – The fair value is based on significant unobservable market inputs utilizing standardized derivative pricing models. | ||||||||||||||
Bank line of credit, term loans and other debt – The carrying values are a reasonable estimate of fair value because the borrowings are primarily based on market interest rates and the Company’s current credit ratings. | ||||||||||||||
Interest-rate swaps – The fair value is based on observable inputs utilizing standardized pricing models that consider forward yield curves and discount rates which are observable in active and inactive markets. | ||||||||||||||
Currency swaps – The fair value is based on observable inputs utilizing standardized pricing models that consider the future value of the currency exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using discount rates based on observable traded interest rates. | ||||||||||||||
The table below summarizes the carrying values and fair values of the Company’s financial instruments (in thousands): | ||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
Loans receivable, net(2) | $ | 1,025,278 | $ | 1,040,540 | $ | 906,961 | $ | 898,522 | ||||||
Marketable debt securities(2) | 221,379 | 229,881 | 231,442 | 252,125 | ||||||||||
Marketable equity securities(1) | 38 | 38 | 43 | 43 | ||||||||||
Warrants(3) | 3,004 | 3,004 | 2,220 | 2,220 | ||||||||||
Bank line of credit(2) | 358,555 | 358,555 | 838,516 | 838,516 | ||||||||||
Term loans(2) | 530,038 | 530,038 | 213,610 | 213,610 | ||||||||||
Senior unsecured notes(1) | 8,022,533 | 8,579,285 | 7,626,194 | 8,187,458 | ||||||||||
Mortgage debt(2) | 979,890 | 1,039,562 | 984,431 | 1,025,091 | ||||||||||
Other debt(2) | 95,747 | 95,747 | 97,022 | 97,022 | ||||||||||
Interest-rate swap assets(2) | — | — | 178 | 178 | ||||||||||
Interest-rate swap liabilities(2) | 7,820 | 7,820 | 7,663 | 7,663 | ||||||||||
Currency swap assets(2) | 3,603 | 3,603 | 929 | 929 | ||||||||||
-1 | Level 1: Fair value calculated based on quoted prices in active markets. | |||||||||||||
-2 | Level 2: Fair value based on quoted prices for similar or identical instruments in active or inactive markets, respectively, or calculated utilizing standardized pricing models in which significant inputs or value drivers are observable in active markets. | |||||||||||||
-3 | Level 3: Fair value determined based on significant unobservable market inputs using standardized derivative pricing models. | |||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||
Derivative Financial Instruments | NOTE 20. Derivative Financial Instruments | ||||||||||||||||
The following table summarizes the Company’s outstanding interest-rate and foreign currency swap contracts as of March 31, 2015 (dollars and GBP in thousands): | |||||||||||||||||
Fixed | |||||||||||||||||
Hedge | Rate/Buy | Floating/Exchange | Notional/ | ||||||||||||||
Date Entered | Maturity Date | Designation | Amount | Rate Index | Sell Amount | Fair Value(1) | |||||||||||
Interest rate: | |||||||||||||||||
July 2005(2) | July 2020 | Cash Flow | 3.82 | % | BMA Swap Index | $ | 45,600 | $ | -6,129 | ||||||||
November 2008(3) | Oct-16 | Cash Flow | 5.95 | % | 1 Month LIBOR+1.50% | $ | 25,600 | $ | -1,540 | ||||||||
July 2012(3) | June 2016 | Cash Flow | 1.81 | % | 1 Month GBP LIBOR+1.20% | £ | 137,000 | $ | -84 | ||||||||
January 2015(3) | Oct-17 | Cash Flow | 1.79 | % | 1 Month GBP LIBOR+0.975% | £ | 220,000 | $ | -67 | ||||||||
Foreign currency: | |||||||||||||||||
July 2012(4) | June 2016 | Cash Flow | $ | 34,100 | Buy USD/Sell GBP | £ | 21,700 | $ | 1,887 | ||||||||
July 2014(5) | December 2015 | Cash Flow | $ | 5,600 | Buy USD/Sell GBP | £ | 3,300 | $ | 732 | ||||||||
January 2015(6) | Oct-17 | Cash Flow | $ | 49,300 | Buy USD/Sell GBP | £ | 32,500 | $ | 983 | ||||||||
-1 | Derivative assets are recorded in other assets, net and derivative liabilities are recorded in accounts payable and accrued liabilities on the consolidated balance sheets. | ||||||||||||||||
-2 | Represents three interest-rate swap contracts, which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows. | ||||||||||||||||
-3 | Hedges fluctuations in interest payments on variable-rate unsecured debt due to fluctuations in the underlying benchmark interest rate. | ||||||||||||||||
-4 | Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to a portion of the Company’s forecasted interest receipts on GBP denominated senior unsecured notes. Represents a currency swap to sell £7.2 million at a rate of 1.5695 on various dates through June 2016. | ||||||||||||||||
-5 | Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to the Company’s forecasted GBP denominated interest receipts on intercompany loans. Represents a currency swap to sell £0.4 million at a rate of 1.7060 on various dates through December 2015. | ||||||||||||||||
-6 | Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to the Company’s forecasted GBP denominated interest receipts on its HC-One Facility. Represents a currency swap to sell approximately £1.0 million monthly at a rate of 1.5149 through October 2017. | ||||||||||||||||
The Company uses derivative instruments to mitigate the effects of interest rate and foreign currency fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest and foreign currency rates related to the potential impact these changes could have on future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes. | |||||||||||||||||
The primary risks associated with derivative instruments are market and credit risk. Market risk is defined as the potential for loss in value of a derivative instrument due to adverse changes in market prices. Credit risk is the risk that one of the parties to a derivative contract fails to perform or meet their financial obligation. The Company does not obtain collateral associated with its derivative contracts, but monitors the credit standing of its counterparties on a regular basis. Should a counterparty fail to perform, the Company would incur a financial loss to the extent that the associated derivative contract was in an asset position. At March 31, 2015, the Company does not anticipate non-performance by the counterparties to its outstanding derivative contracts. | |||||||||||||||||
On January 12, 2015, the Company entered into an interest-rate swap contract that is designated as hedging the interest payments on its GBP denominated 2015 Term Loan due to fluctuations in the underlying benchmark interest rate (see additional discussion of the Term Loan in Note 11). The cash flow hedge has a notional amount of £220 million and expires in October 2017. | |||||||||||||||||
On January 12, 2015, the Company entered into a foreign currency swap contract to hedge the foreign currency exchange risk related to GBP interest receipts on the Company’s HC-One Facility (see additional discussion of the HC-One Facility in Note 7). The cash flow hedge has a fixed GBP/USD exchange rate of 1.5149 (buy approximately $1.5 million and sell £1.0 million monthly) and matures in October 2017. | |||||||||||||||||
During the three months ended March 31, 2015, the Company determined a portion of a cash flow hedge was ineffective and reclassified $0.1 million of unrealized gains related to this interest-rate swap contract into other income, net. The Company expects that the hedged forecasted transactions for each of the outstanding qualifying cash flow hedging relationships remain probable of occurring, and as a result, no additional gains or losses recorded to accumulated other comprehensive loss are expected to be reclassified to earnings for any other outstanding hedges, other than discussed above. | |||||||||||||||||
To illustrate the effect of movements in the interest rate and foreign currency markets, the Company performed a market sensitivity analysis on its outstanding hedging instruments. The Company applied various basis point spreads to the underlying interest rate curves and foreign currency exchange rates of the derivative portfolio in order to determine the instruments’ change in fair value. The following table summarizes the results of the analysis performed (dollars in thousands): | |||||||||||||||||
Effects of Change in Interest and Foreign Currency Rates | |||||||||||||||||
+50 Basis | -50 Basis | +100 Basis | -100 Basis | ||||||||||||||
Date Entered | Maturity Date | Points | Points | Points | Points | ||||||||||||
Interest rate: | |||||||||||||||||
July 2005 | July 2020 | $ | 1,082 | $ | -1,184 | $ | 2,215 | $ | -2,317 | ||||||||
November 2008 | October 2016 | 200 | -190 | 396 | -386 | ||||||||||||
July 2012 | June 2016 | 1,242 | -1,205 | 2,466 | -2,429 | ||||||||||||
January 2015 | Oct-17 | 4,165 | -4,180 | 8,338 | -8,353 | ||||||||||||
Foreign currency: | |||||||||||||||||
July 2012 | June 2016 | 1,745 | 2,067 | 1,584 | 2,228 | ||||||||||||
July 2014 | December 2015 | 711 | 760 | 687 | 784 | ||||||||||||
January 2015 | Oct-17 | 831 | 1,313 | 590 | 1,554 | ||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s estimates. | |
The consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries, joint ventures and VIEs that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs and requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability (consistent with debt discounts). ASU 2015-03 is effective for fiscal years, and interim periods within, beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of the adoption of ASU 2015-03 on January 1, 2016 to the Company’s consolidated financial position or results of operations. | |
In February 2015, the FASB issued Accounting Standards Update No. 2015-2, Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 requires amendments to both the variable interest entity and voting models. The amendments (i) rescind the indefinite deferral of certain aspects of accounting standards relating to consolidations and provide a permanent scope exception for registered money market funds and similar unregistered money market funds, (ii) modify (a) the identification of variable interests (fees paid to a decision maker or service provider), (b) the VIE characteristics for a limited partnership or similar entity and (c) the primary beneficiary determination under the VIE model, and (iii) eliminate the presumption within the current voting model that a general partner controls a limited partnership or similar entity. ASU 2015-02 is effective for fiscal years, and interim periods within, beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of the adoption of ASU 2015-02 on January 1, 2016 to the Company’s consolidated financial position or results of operations. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). This update changes the guidance for recognizing revenue. ASU 2014-09 provides guidance for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years and interim periods beginning after December 15, 2016, although on April 29, 2015, the FASB issued a proposal for public comment to defer the effective date by one year. Early adoption is permitted. The Company is evaluating the impact of the adoption of ASU 2014-09 on its current adoption date of January 1, 2017 to the Company’s consolidated financial position or results of operations. | |
Reclassifications | Reclassification |
Certain amounts in the Company’s consolidated financial statements have been reclassified for prior periods to conform to the current period presentation. As a result of the Company’s increasing transaction volume, “acquisition and pursuit costs” are separately presented on the consolidated statements of operations from “general and administrative expenses.” | |
Real_Estate_Property_Investmen1
Real Estate Property Investments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Real Estate Property Investments | |||||||||||||||||
Schedule of other real estate acquisitions (in thousands) | |||||||||||||||||
Consideration | Assets Acquired | ||||||||||||||||
Liabilities | Noncontrolling | Net | |||||||||||||||
Segment | Cash Paid | Assumed | Interest | Real Estate | Intangibles | ||||||||||||
Senior housing | $ | 34,068 | $ | 626 | $ | 1,306 | $ | 34,350 | $ | 1,650 | |||||||
Medical office | 180 | — | — | 180 | — | ||||||||||||
$ | 34,248 | $ | 626 | $ | 1,306 | $ | 34,530 | $ | 1,650 | ||||||||
Consideration | Assets Acquired | ||||||||||||||||
Liabilities | Noncontrolling | ||||||||||||||||
Segment | Cash Paid | Assumed | Interest | Real Estate | |||||||||||||
Senior housing | $ | 5,473 | $ | 1 | $ | 1,152 | $ | 6,626 | |||||||||
Schedule of capital improvements (in thousands) | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
Segment | 2015 | 2014 | |||||||||||||||
Senior housing | $ | 16,172 | $ | 6,950 | |||||||||||||
Post-acute/skilled nursing | 1,960 | 2,381 | |||||||||||||||
Life science | 27,391 | 26,762 | |||||||||||||||
Medical office | 19,233 | 12,975 | |||||||||||||||
Hospital | 37 | — | |||||||||||||||
$ | 64,793 | $ | 49,068 | ||||||||||||||
Dispositions_of_Real_Estate_an1
Dispositions of Real Estate and Discontinued Operations (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Dispositions of Real Estate and Discontinued Operations | |||||
Summary of income from discontinued operations, impairments and gain on sales of real estate included in discontinued operations (dollars in thousands) | |||||
Three Months Ended March 31, 2014 | |||||
Rental and related revenues | $ | 1,810 | |||
Operating expenses | 54 | ||||
Other expenses, net | 20 | ||||
Income before gain on sales of real estate, net of income taxes | $ | 1,736 | |||
Gain on sales of real estate, net of income taxes | $ | 28,010 | |||
Number of properties included in discontinued operations | 3 | ||||
Net_Investment_in_Direct_Finan1
Net Investment in Direct Financing Leases (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Loans Receivable: | ||||||||||||||||
Schedule of components of net investment in DFLs (dollars in thousands) | ||||||||||||||||
March 31, | December 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Minimum lease payments receivable | $ | 26,825,121 | $ | 24,182,525 | ||||||||||||
Estimated residual values | 3,910,830 | 4,126,426 | ||||||||||||||
Less unearned income | -23,908,355 | -21,028,617 | ||||||||||||||
Net investment in direct financing leases | $ | 6,827,596 | $ | 7,280,334 | ||||||||||||
Properties subject to direct financing leases | 363 | 363 | ||||||||||||||
Direct Financing Leases | ||||||||||||||||
Loans Receivable: | ||||||||||||||||
Summary of the Company's internal ratings for net investment in DFLs (dollars in thousands) | ||||||||||||||||
Carrying | Percentage of DFL | Internal Ratings | ||||||||||||||
Investment Type | Amount | Portfolio | Performing DFLs | Watch List DFLs | Workout DFLs | |||||||||||
Senior housing | $ | 1,562,875 | 23 | $ | 1,193,903 | $ | 368,972 | $ | — | |||||||
Post-acute/skilled nursing | 5,140,830 | 75 | 5,140,830 | — | — | |||||||||||
Hospital | 123,891 | 2 | 123,891 | — | — | |||||||||||
$ | 6,827,596 | 100 | $ | 6,458,624 | $ | 368,972 | $ | — | ||||||||
Loans_Receivable_Tables
Loans Receivable (Tables) (Loans receivable) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Loans receivable | ||||||||||||||||||||
Loans Receivable: | ||||||||||||||||||||
Schedule of loans receivable (in thousands) | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Real Estate | Other | Real Estate | Other | |||||||||||||||||
Secured | Secured | Total | Secured | Secured | Total | |||||||||||||||
Mezzanine | $ | — | $ | 930,587 | $ | 930,587 | $ | — | $ | 799,064 | $ | 799,064 | ||||||||
Other(1) | 122,514 | — | 122,514 | 135,363 | — | 135,363 | ||||||||||||||
Unamortized discounts, fees and costs | — | -14,413 | -14,413 | — | -14,056 | -14,056 | ||||||||||||||
Allowance for loan losses | — | -13,410 | -13,410 | — | -13,410 | -13,410 | ||||||||||||||
$ | 122,514 | $ | 902,764 | $ | 1,025,278 | $ | 135,363 | $ | 771,598 | $ | 906,961 | |||||||||
(1)Represents construction loans outstanding related to senior housing development projects. At March 31, 2015, the Company had $8 million remaining under its commitments to fund development projects. | ||||||||||||||||||||
Summary of the Company's internal ratings for loans receivable (dollars in thousands) | ||||||||||||||||||||
Carrying | Percentage of Loan | Internal Ratings | ||||||||||||||||||
Investment Type | Amount | Portfolio | Performing Loans | Watch List Loans | Workout Loans | |||||||||||||||
Real estate secured | $ | 122,514 | 12 | $ | 122,514 | $ | — | $ | — | |||||||||||
Other secured | 902,764 | 88 | 885,777 | — | 16,987 | |||||||||||||||
$ | 1,025,278 | 100 | $ | 1,008,291 | $ | — | $ | 16,987 | ||||||||||||
Investments_in_and_Advances_to1
Investments in and Advances to Unconsolidated Joint Ventures (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Investments in and Advances to Unconsolidated Joint Ventures | |||||||||||
Company owned interests in entities, accounted under equity method (dollars in thousands) | |||||||||||
Entity(1) | Segment | Investment(2) | Ownership% | ||||||||
CCRC JV(3) (4) | senior housing | $ | 455,750 | 49 | |||||||
HCRMC | post-acute/skilled nursing | 51,649 | 9.4 | ||||||||
MBK JV | senior housing | 27,279 | 50 | ||||||||
HCP Ventures III, LLC | medical office | 6,658 | 30 | ||||||||
HCP Ventures IV, LLC(4) | medical office and hospital | 26,206 | 20 | ||||||||
HCP Life Science(5) | life science | 69,758 | 50 | – | 63 | ||||||
Suburban Properties, LLC | medical office | 5,312 | 67 | ||||||||
Advances to unconsolidated joint ventures, net | 183 | ||||||||||
$ | 642,795 | ||||||||||
Edgewood Assisted Living Center, LLC | senior housing | $ | -448 | 45 | |||||||
Seminole Shores Living Center, LLC | senior housing | -635 | 50 | ||||||||
$ | -1,083 | ||||||||||
-1 | These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures. | ||||||||||
-2 | Represents the carrying value of the Company’s investment in the unconsolidated joint ventures. Negative balances are recorded in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. | ||||||||||
-3 | Includes two unconsolidated joint ventures in a RIDEA structure: (i) “CCRC PropCo” and (ii) “CCRC OpCo”. | ||||||||||
-4 | Represents VIEs, see Note 17. | ||||||||||
-5 | 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 (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%). | ||||||||||
Summarized combined financial information for unconsolidated joint ventures (in thousands) | |||||||||||
March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||
Real estate, net | $ | 5,230,958 | $ | 5,134,587 | |||||||
Goodwill and other assets, net | 5,048,919 | 4,986,310 | |||||||||
Total assets | $ | 10,279,877 | $ | 10,120,897 | |||||||
Capital lease obligations and debt | $ | 7,218,361 | $ | 7,197,940 | |||||||
Accounts payable | 1,093,859 | 1,015,912 | |||||||||
Other partners’ capital | 1,316,030 | 1,281,413 | |||||||||
HCP’s capital(1) | 651,627 | 625,632 | |||||||||
Total liabilities and partners’ capital | $ | 10,279,877 | $ | 10,120,897 | |||||||
-1 | The combined basis difference of the Company’s investments in these joint ventures of $10 million, as of March 31, 2015, is primarily attributable to goodwill, real estate, capital lease obligations, deferred tax assets and lease-related net intangibles. | ||||||||||
Three Months Ended March 31, | |||||||||||
2015 | 2014 | ||||||||||
Total revenues | $ | 1,166,454 | $ | 1,067,491 | |||||||
Income (loss) from discontinued operations | 1,100 | -2,600 | |||||||||
Net income | 9,783 | 7,996 | |||||||||
HCP’s share of earnings(1) | 13,601 | 14,528 | |||||||||
Fees earned by HCP | 460 | 449 | |||||||||
Distributions received by HCP | 2,181 | 3,202 | |||||||||
-1 | The Company’s joint venture interest in HCRMC is accounted for using the equity method and results in an ongoing elimination of DFL income proportional to HCP’s ownership in HCRMC. The elimination of the respective proportional lease expense at the HCRMC level in substance results in $16 million of DFL income that is recharacterized to the Company’s share of earnings from HCRMC (equity income from unconsolidated joint ventures) for both the three months ended March 31, 2015 and 2014. | ||||||||||
Other_Assets_Tables
Other Assets (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Assets. | ||||||||
Schedule of other assets (in thousands) | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Straight-line rent assets, net of allowance of $34,231 and $34,182, respectively | $ | 359,311 | $ | 355,864 | ||||
Marketable debt securities, net | 221,379 | 231,442 | ||||||
Leasing costs and inducements, net | 158,347 | 146,500 | ||||||
Deferred financing costs, net | 52,597 | 47,592 | ||||||
Goodwill | 50,346 | 50,346 | ||||||
Other | 166,917 | 108,428 | ||||||
Total other assets | $ | 1,008,897 | $ | 940,172 | ||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Debt | |||||||||||||||||
Summary of senior notes issuances (dollars in thousands) | |||||||||||||||||
Period | Amount | Coupon Rate | Maturity Date | Net Proceeds | |||||||||||||
Three months ending March 31, 2015: | |||||||||||||||||
21-Jan-15 | $ | 600,000 | 3.400 | % | 2025 | $ | 591,000 | ||||||||||
Year ending December 31, 2014: | |||||||||||||||||
14-Aug-14 | $ | 800,000 | 3.875 | % | 2024 | $ | 792,000 | ||||||||||
21-Feb-14 | $ | 350,000 | 4.200 | % | 2024 | $ | 346,000 | ||||||||||
Summary of senior notes payoffs (dollars in thousands) | |||||||||||||||||
Period | Amount | Coupon Rate | |||||||||||||||
Three months ending March 31, 2015: | |||||||||||||||||
1-Mar-15 | $ | 200,000 | 6.00 | % | |||||||||||||
Year ending December 31, 2014: | |||||||||||||||||
February 1, 2014 | $ | 400,000 | 2.70 | % | |||||||||||||
14-Jun-14 | $ | 62,000 | 6.00 | % | |||||||||||||
14-Jun-14 | $ | 25,000 | 3 Month LIBOR+0.9 | % | |||||||||||||
Summary of stated debt maturities and scheduled principal repayments (in thousands) | |||||||||||||||||
Senior | |||||||||||||||||
Bank Line of | Unsecured | Mortgage | |||||||||||||||
Year | Credit(1) | Term Loans(2) | Notes(3) | Debt | Total(4) | ||||||||||||
2015 (Nine months) | $ | — | $ | — | $ | 200,000 | $ | 35,549 | $ | 235,549 | |||||||
2016 | — | 203,404 | 900,000 | 292,222 | 1,395,626 | ||||||||||||
2017 | — | — | 750,000 | 581,891 | 1,331,891 | ||||||||||||
2018 | 358,555 | — | 600,000 | 6,583 | 965,138 | ||||||||||||
2019 | — | 326,634 | 450,000 | 2,072 | 778,706 | ||||||||||||
Thereafter | — | — | 5,150,000 | 63,170 | 5,213,170 | ||||||||||||
358,555 | 530,038 | 8,050,000 | 981,487 | 9,920,080 | |||||||||||||
Discounts, net | — | — | -27,467 | -1,597 | -29,064 | ||||||||||||
$ | 358,555 | $ | 530,038 | $ | 8,022,533 | $ | 979,890 | $ | 9,891,016 | ||||||||
(1) Represents £242 million translated into U.S. dollars. | |||||||||||||||||
(2) Represents £357 million translated into U.S. dollars. | |||||||||||||||||
(3) Interest rates on the notes ranged from 2.79% to 6.99% with a weighted average effective interest rate of 4.82% and a weighted average maturity of six years. | |||||||||||||||||
(4) Excludes $96 million of other debt that represents Life Care Bonds and Demand Notes that have no scheduled maturities. | |||||||||||||||||
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Equity | |||||||||
Schedule of common stock, cash dividends | |||||||||
Amount | Dividend | ||||||||
Declaration Date | Record Date | Per Share | Payable Date | ||||||
January 29 | February 9 | $ | 0.565 | February 24 | |||||
April 30 | 11-May | 0.565 | 26-May | ||||||
Schedule of company's issuances of common stock (shares in thousands) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Dividend Reinvestment and Stock Purchase Plan | 829 | 875 | |||||||
Conversion of DownREIT units(1) | 38 | 2 | |||||||
Exercise of stock options | 811 | 4 | |||||||
Vesting of restricted stock units | 288 | 411 | |||||||
Repurchase of common stock | 128 | 208 | |||||||
(1) Non-managing member LLC units. | |||||||||
Schedule of accumulated other comprehensive loss (in thousands) | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Cumulative foreign currency translation adjustment | $ | -17,710 | $ | -10,747 | |||||
Unrealized losses on cash flow hedges, net | -7,291 | -9,624 | |||||||
Supplemental Executive Retirement Plan minimum liability | -3,468 | -3,537 | |||||||
Unrealized gains on available for sale securities | 8 | 13 | |||||||
Total accumulated other comprehensive loss | $ | -28,461 | $ | -23,895 | |||||
Segment_Disclosures_Tables
Segment Disclosures (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Segment Disclosures | |||||||||||||||||||||||
Information of revenue of reportable segment (in thousands) | For the three months ended March 31, 2015: | ||||||||||||||||||||||
Investment | |||||||||||||||||||||||
Rental | Resident Fees | Interest | Management | Total | Adjusted | ||||||||||||||||||
Segments | Revenues(1) | and Services | Income | Fee Income | Revenues | NOI(2) | (Cash) NOI(2) | ||||||||||||||||
Senior housing | $ | 127,382 | $ | 105,013 | $ | 7,394 | $ | — | $ | 239,789 | $ | 156,885 | $ | 150,472 | |||||||||
Post-acute/skilled | 140,576 | — | 25,868 | — | 166,444 | 140,043 | 121,960 | ||||||||||||||||
Life science | 83,551 | — | — | 1 | 83,552 | 66,852 | 63,777 | ||||||||||||||||
Medical office | 98,305 | — | — | 459 | 98,764 | 60,053 | 58,187 | ||||||||||||||||
Hospital | 22,242 | — | — | — | 22,242 | 21,205 | 21,457 | ||||||||||||||||
Total | $ | 472,056 | $ | 105,013 | $ | 33,262 | $ | 460 | $ | 610,791 | $ | 445,038 | $ | 415,853 | |||||||||
For the three months ended March 31, 2014: | |||||||||||||||||||||||
Investment | |||||||||||||||||||||||
Rental | Resident Fees | Interest | Management | Total | Adjusted | ||||||||||||||||||
Segments | Revenues(1) | and Services | Income | Fee Income | Revenues | NOI(2) | (Cash) NOI(2) | ||||||||||||||||
Senior housing | $ | 150,085 | $ | 38,053 | $ | 3,284 | $ | — | $ | 191,422 | $ | 163,590 | $ | 150,375 | |||||||||
Post-acute/skilled | 137,780 | — | 13,412 | — | 151,192 | 137,248 | 118,099 | ||||||||||||||||
Life science | 76,122 | — | — | 1 | 76,123 | 61,961 | 58,829 | ||||||||||||||||
Medical office | 89,262 | — | — | 448 | 89,710 | 53,746 | 53,029 | ||||||||||||||||
Hospital | 21,545 | — | — | — | 21,545 | 20,595 | 20,661 | ||||||||||||||||
Total | $ | 474,794 | $ | 38,053 | $ | 16,696 | $ | 449 | $ | 529,992 | $ | 437,140 | $ | 400,993 | |||||||||
-1 | Represents rental and related revenues, tenant recoveries and income from DFLs. | ||||||||||||||||||||||
-2 | NOI and Adjusted NOI are non-GAAP supplemental financial measures used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expense; NOI excludes all other financial statement amounts included in net (loss) income as presented below. The Company believes NOI provides 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 after eliminating the effects of straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees. Adjusted NOI is oftentimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. The Company believes that net (loss) income is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net (loss) income as defined by GAAP because it does not reflect various excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI. | ||||||||||||||||||||||
Reconciliation of reported net (loss) income to NOI and adjusted NOI (in thousands) | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Net (loss) income | $ | -237,503 | $ | 263,623 | |||||||||||||||||||
Interest income | -33,262 | -16,696 | |||||||||||||||||||||
Investment management fee income | -460 | -449 | |||||||||||||||||||||
Interest expense | 116,780 | 106,638 | |||||||||||||||||||||
Depreciation and amortization | 114,522 | 107,388 | |||||||||||||||||||||
General and administrative | 24,773 | 20,899 | |||||||||||||||||||||
Acquisition and pursuit costs | 3,390 | 495 | |||||||||||||||||||||
Impairments | 478,464 | — | |||||||||||||||||||||
Gains on sales of real estate, net of income taxes | -6,264 | — | |||||||||||||||||||||
Other income, net | -1,724 | -1,930 | |||||||||||||||||||||
Income taxes (benefit) provision | -77 | 1,446 | |||||||||||||||||||||
Equity income from unconsolidated joint ventures | -13,601 | -14,528 | |||||||||||||||||||||
Total discontinued operations | — | -29,746 | |||||||||||||||||||||
NOI | 445,038 | 437,140 | |||||||||||||||||||||
Straight-line rents | -9,546 | -13,968 | |||||||||||||||||||||
DFL accretion | -20,304 | -21,422 | |||||||||||||||||||||
Amortization of above and below market lease intangibles, net | -378 | -168 | |||||||||||||||||||||
Lease termination fees | 1,043 | -578 | |||||||||||||||||||||
NOI adjustments related to discontinued operations | — | -11 | |||||||||||||||||||||
Adjusted (Cash) NOI | $ | 415,853 | $ | 400,993 | |||||||||||||||||||
Reconciliation of company's assets to total assets (in thousands) | |||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||
Segments | 2015 | 2014 | |||||||||||||||||||||
Senior housing | $ | 8,445,616 | $ | 8,383,345 | |||||||||||||||||||
Post-acute/skilled nursing | 6,488,822 | 6,875,122 | |||||||||||||||||||||
Life science | 4,171,320 | 4,154,789 | |||||||||||||||||||||
Medical office | 2,997,583 | 2,988,888 | |||||||||||||||||||||
Hospital | 639,807 | 640,253 | |||||||||||||||||||||
Gross segment assets | 22,743,148 | 23,042,397 | |||||||||||||||||||||
Accumulated depreciation and amortization | -2,680,584 | -2,600,072 | |||||||||||||||||||||
Net segment assets | 20,062,564 | 20,442,325 | |||||||||||||||||||||
Other non-segment assets | 961,878 | 927,615 | |||||||||||||||||||||
Total assets | $ | 21,024,442 | $ | 21,369,940 | |||||||||||||||||||
Earnings_Per_Common_Share_Tabl
Earnings Per Common Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Common Share | ||||||||
Computation of basic and diluted earnings per share (in thousands, except per share amounts) | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator | ||||||||
(Loss) income from continuing operations | $ | -237,503 | $ | 233,877 | ||||
Noncontrolling interests’ share in continuing operations | -3,111 | -3,335 | ||||||
(Loss) income from continuing operations applicable to HCP, Inc. | -240,614 | 230,542 | ||||||
Participating securities’ share in continuing operations | -335 | -1,064 | ||||||
(Loss) income from continuing operations applicable to common shares | -240,949 | 229,478 | ||||||
Discontinued operations | — | 29,746 | ||||||
Noncontrolling interests’ share in discontinued operations | — | -1,177 | ||||||
Net (loss) income applicable to common shares | $ | -240,949 | $ | 258,047 | ||||
Denominator | ||||||||
Basic weighted average common shares | 460,880 | 457,294 | ||||||
Dilutive potential common shares | — | 380 | ||||||
Diluted weighted average common shares | 460,880 | 457,674 | ||||||
Basic earnings per common share | ||||||||
(Loss) income from continuing operations | $ | -0.52 | $ | 0.50 | ||||
Discontinued operations | — | 0.06 | ||||||
Net (loss) income applicable to common shares | $ | -0.52 | $ | 0.56 | ||||
Diluted earnings per common share | ||||||||
(Loss) income from continuing operations | $ | -0.52 | $ | 0.50 | ||||
Discontinued operations | — | 0.06 | ||||||
Net (loss) income applicable to common shares | $ | -0.52 | $ | 0.56 | ||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Cash Flow Information | ||||||||
Supplemental cash flow information (in thousands) | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Supplemental cash flow information: | ||||||||
Interest paid, net of capitalized interest | $ | 168,165 | $ | 152,423 | ||||
Income taxes paid | 383 | 629 | ||||||
Capitalized interest | 1,698 | 3,125 | ||||||
Supplemental schedule of non-cash investing activities: | ||||||||
Accrued construction costs | 32,236 | 21,715 | ||||||
Supplemental schedule of non-cash financing activities: | ||||||||
Vesting of restricted stock units | 288 | 411 | ||||||
Cancellation of restricted stock | — | -1 | ||||||
Conversion of non-managing member units into common stock | 1,608 | 73 | ||||||
Noncontrolling interest issued in connection with real estate acquisition | 1,306 | 1,152 | ||||||
Noncontrolling interest assumed in connection with real estate disposition | — | 1,671 | ||||||
Mortgages and other liabilities assumed with real estate acquisitions | 626 | 1 | ||||||
Unrealized gains (losses) on available-for-sale securities and derivatives designated as cash flow hedges, net | 2,334 | -692 | ||||||
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Variable Interest Entities | ||||||||||
Schedule of Variable Interest Entities (in thousands) | ||||||||||
Maximum Loss | Carrying | |||||||||
VIE Type | Exposure(1) | Asset/Liability Type | Amount | |||||||
CCRC OpCo | $ | 245,321 | Investments in unconsolidated joint ventures | $ | 245,321 | |||||
HCP Ventures IV | 157,706 | Investments in unconsolidated joint ventures | 26,206 | |||||||
VIE tenants—operating leases | 12,341 | Lease intangibles, net and straight-line rent receivables | 12,341 | |||||||
VIE tenants—DFLs | 599,414 | Net investment in DFLs | 599,414 | |||||||
Loan—senior secured | 16,987 | Loans receivable, net | 16,987 | |||||||
CMBS | 17,546 | Marketable debt securities | 17,546 | |||||||
-1 | The Company’s maximum loss exposure related to CCRC OpCo, VIE tenants, and loans and marketable debt securities to VIE borrowers represents the aggregate carrying amount of such investments. The Company’s maximum loss exposure related to HCP Ventures IV represents the aggregate carrying amount of its investment plus $107 million in committed support, which may be mitigated by the refinancing of HCP Ventures IV’s Contractual Obligations which it expects to occur as such debt becomes due in late 2015 and early 2016 (see Note 12). | |||||||||
Concentration_of_Credit_Risk_T
Concentration of Credit Risk (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Summary of consolidated financial information (in millions) | ||||||||||
March 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
Real estate and other property, net | $ | 2,915.4 | $ | 2,934.4 | ||||||
Cash and cash equivalents | 141.6 | 127.9 | ||||||||
Goodwill, intangible and other assets, net | 4,646.1 | 4,621.7 | ||||||||
Total assets | $ | 7,703.1 | $ | 7,684.0 | ||||||
Debt and financing obligations | $ | 6,071.0 | $ | 6,108.3 | ||||||
Accounts payable, accrued liabilities and other | 975.6 | 932.7 | ||||||||
Total equity | 656.5 | 643.0 | ||||||||
Total liabilities and equity | $ | 7,703.1 | $ | 7,684.0 | ||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Revenues | $ | 1,054.0 | $ | 1,041.9 | ||||||
Operating, general and administrative expense | -897.9 | -888.8 | ||||||||
Depreciation and amortization expense | -35.9 | -35.2 | ||||||||
Interest expense | -100.3 | -102.3 | ||||||||
Other income, net | 2.8 | 2.9 | ||||||||
Income from continuing operations before income tax expense | 22.7 | 18.5 | ||||||||
Income tax expense | -10.1 | -7.5 | ||||||||
Income from continuing operations | 12.6 | 11.0 | ||||||||
Income (loss) from discontinued operations, net of taxes | 1.1 | -2.6 | ||||||||
Net income | $ | 13.7 | $ | 8.4 | ||||||
Tenants and Operators | ||||||||||
Schedule of concentration of credit risk | ||||||||||
Percentage of | Percentage of | |||||||||
Total Company Assets | Total Company Revenues | |||||||||
March 31, | December 31, | Three Months Ended March 31, | ||||||||
Operators | 2015 | 2014 | 2015 | 2014 | ||||||
HCRMC | 29 | % | 31 | % | 25 | % | 28 | % | ||
Brookdale(1) | 13 | % | 13 | % | 10 | % | 17 | % | ||
-1 | On July 31, 2014, Brookdale completed its acquisition of Emeritus. These percentages of segment revenues and total revenues for the three months ended March 31, 2014 are prepared on a pro forma basis to reflect the combined concentration for Brookdale and Emeritus, as if the merger had occurred as of the beginning of the period presented. On August 29, 2014, the Company and Brookdale amended or terminated all former leases with Emeritus and entered into two RIDEA joint ventures (see Note 3). Percentages do not include senior housing facilities that Brookdale manages (is not a tenant) under a RIDEA structure. | |||||||||
Tenants and Operators | Post-acute/skilled | ||||||||||
Schedule of concentration of credit risk | ||||||||||
Percentage of Post-Acute/ | Percentage of Post-Acute/ | |||||||||
Skilled Nursing Gross Assets | Skilled Nursing Revenues | |||||||||
March 31, | December 31, | Three Months Ended March 31, | ||||||||
Operators | 2015 | 2014 | 2015 | 2014 | ||||||
HCRMC | 79 | % | 82 | % | 80 | % | 86 | % | ||
Tenants and Operators | Senior housing | ||||||||||
Schedule of concentration of credit risk | ||||||||||
Percentage of | Percentage of | |||||||||
Senior Housing Gross Assets | Senior Housing Revenues | |||||||||
March 31, | December 31, | Three Months Ended March 31, | ||||||||
Operators | 2015 | 2014 | 2015 | 2014 | ||||||
Brookdale(1) | 32 | % | 36 | % | 25 | % | 46 | % | ||
HCRMC | 11 | % | 11 | % | 8 | % | 10 | % | ||
(1) On July 31, 2014, Brookdale completed its acquisition of Emeritus. These percentages of segment revenues and total revenues for the three months ended March 31, 2014 are prepared on a pro forma basis to reflect the combined concentration for Brookdale and Emeritus, as if the merger had occurred as of the beginning of the period presented. On August 29, 2014, the Company and Brookdale amended or terminated all former leases with Emeritus and entered into two RIDEA joint ventures (see Note 3). Percentages do not include senior housing facilities that Brookdale manages (is not a tenant) under a RIDEA structure. | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair value measurements of financial assets and liabilities (in thousands) | ||||||||||||||
Financial Instrument(1) | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable equity securities | $ | 38 | $ | 38 | $ | — | $ | — | ||||||
Interest-rate swap liabilities | -7,820 | — | -7,820 | — | ||||||||||
Currency swap assets | 3,603 | — | 3,603 | — | ||||||||||
Warrants | 3,004 | — | — | 3,004 | ||||||||||
$ | -1,175 | $ | 38 | $ | -4,217 | $ | 3,004 | |||||||
-1 | Interest rate and currency swaps, as well as common stock warrant fair values, are determined based on observable and unobservable market assumptions utilizing standardized derivative pricing models. | |||||||||||||
Summary of the carrying values and fair values of financial instruments (in thousands) | ||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
Carrying | Carrying | |||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||
Loans receivable, net(2) | $ | 1,025,278 | $ | 1,040,540 | $ | 906,961 | $ | 898,522 | ||||||
Marketable debt securities(2) | 221,379 | 229,881 | 231,442 | 252,125 | ||||||||||
Marketable equity securities(1) | 38 | 38 | 43 | 43 | ||||||||||
Warrants(3) | 3,004 | 3,004 | 2,220 | 2,220 | ||||||||||
Bank line of credit(2) | 358,555 | 358,555 | 838,516 | 838,516 | ||||||||||
Term loans(2) | 530,038 | 530,038 | 213,610 | 213,610 | ||||||||||
Senior unsecured notes(1) | 8,022,533 | 8,579,285 | 7,626,194 | 8,187,458 | ||||||||||
Mortgage debt(2) | 979,890 | 1,039,562 | 984,431 | 1,025,091 | ||||||||||
Other debt(2) | 95,747 | 95,747 | 97,022 | 97,022 | ||||||||||
Interest-rate swap assets(2) | — | — | 178 | 178 | ||||||||||
Interest-rate swap liabilities(2) | 7,820 | 7,820 | 7,663 | 7,663 | ||||||||||
Currency swap assets(2) | 3,603 | 3,603 | 929 | 929 | ||||||||||
-1 | Level 1: Fair value calculated based on quoted prices in active markets. | |||||||||||||
-2 | Level 2: Fair value based on quoted prices for similar or identical instruments in active or inactive markets, respectively, or calculated utilizing standardized pricing models in which significant inputs or value drivers are observable in active markets. | |||||||||||||
-3 | Level 3: Fair value determined based on significant unobservable market inputs using standardized derivative pricing models. | |||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||
Schedule of derivative instruments (dollars and GBP in thousands) | The following table summarizes the Company’s outstanding interest-rate and foreign currency swap contracts as of March 31, 2015 (dollars and GBP in thousands): | ||||||||||||||||
Fixed | |||||||||||||||||
Hedge | Rate/Buy | Floating/Exchange | Notional/ | ||||||||||||||
Date Entered | Maturity Date | Designation | Amount | Rate Index | Sell Amount | Fair Value(1) | |||||||||||
Interest rate: | |||||||||||||||||
July 2005(2) | July 2020 | Cash Flow | 3.82 | % | BMA Swap Index | $ | 45,600 | $ | -6,129 | ||||||||
November 2008(3) | Oct-16 | Cash Flow | 5.95 | % | 1 Month LIBOR+1.50% | $ | 25,600 | $ | -1,540 | ||||||||
July 2012(3) | June 2016 | Cash Flow | 1.81 | % | 1 Month GBP LIBOR+1.20% | £ | 137,000 | $ | -84 | ||||||||
January 2015(3) | Oct-17 | Cash Flow | 1.79 | % | 1 Month GBP LIBOR+0.975% | £ | 220,000 | $ | -67 | ||||||||
Foreign currency: | |||||||||||||||||
July 2012(4) | June 2016 | Cash Flow | $ | 34,100 | Buy USD/Sell GBP | £ | 21,700 | $ | 1,887 | ||||||||
July 2014(5) | December 2015 | Cash Flow | $ | 5,600 | Buy USD/Sell GBP | £ | 3,300 | $ | 732 | ||||||||
January 2015(6) | Oct-17 | Cash Flow | $ | 49,300 | Buy USD/Sell GBP | £ | 32,500 | $ | 983 | ||||||||
-1 | Derivative assets are recorded in other assets, net and derivative liabilities are recorded in accounts payable and accrued liabilities on the consolidated balance sheets. | ||||||||||||||||
-2 | Represents three interest-rate swap contracts, which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows. | ||||||||||||||||
-3 | Hedges fluctuations in interest payments on variable-rate unsecured debt due to fluctuations in the underlying benchmark interest rate. | ||||||||||||||||
-4 | Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to a portion of the Company’s forecasted interest receipts on GBP denominated senior unsecured notes. Represents a currency swap to sell £7.2 million at a rate of 1.5695 on various dates through June 2016. | ||||||||||||||||
-5 | Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to the Company’s forecasted GBP denominated interest receipts on intercompany loans. Represents a currency swap to sell £0.4 million at a rate of 1.7060 on various dates through December 2015. | ||||||||||||||||
-6 | Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to the Company’s forecasted GBP denominated interest receipts on its HC-One Facility. Represents a currency swap to sell approximately £1.0 million monthly at a rate of 1.5149 through October 2017. | ||||||||||||||||
Schedule of effect of change in interest and foreign currency rate (dollars in thousands) | |||||||||||||||||
Effects of Change in Interest and Foreign Currency Rates | |||||||||||||||||
+50 Basis | -50 Basis | +100 Basis | -100 Basis | ||||||||||||||
Date Entered | Maturity Date | Points | Points | Points | Points | ||||||||||||
Interest rate: | |||||||||||||||||
July 2005 | July 2020 | $ | 1,082 | $ | -1,184 | $ | 2,215 | $ | -2,317 | ||||||||
November 2008 | October 2016 | 200 | -190 | 396 | -386 | ||||||||||||
July 2012 | June 2016 | 1,242 | -1,205 | 2,466 | -2,429 | ||||||||||||
January 2015 | Oct-17 | 4,165 | -4,180 | 8,338 | -8,353 | ||||||||||||
Foreign currency: | |||||||||||||||||
July 2012 | June 2016 | 1,745 | 2,067 | 1,584 | 2,228 | ||||||||||||
July 2014 | December 2015 | 711 | 760 | 687 | 784 | ||||||||||||
January 2015 | Oct-17 | 831 | 1,313 | 590 | 1,554 | ||||||||||||
Brookdale_Lease_Amendments_and1
Brookdale Lease Amendments and Terminations and the Formation of Two RIDEA Joint Ventures (“Brookdale Transactionâ€) (Details) | 0 Months Ended | |
Aug. 29, 2014 | Mar. 31, 2015 | |
property | ||
item | ||
Brookdale Senior Living | ||
Lease Amendments and Terminations and Joint Venture Formations - disclosures | ||
Number of components in agreement | 3 | |
Number of facilities for which existing lease agreement is amended | 153 | |
Number of properties with purchase options that will be cancelled on amendment | 30 | |
Number of facilities for which existing lease agreement is terminated | 49 | |
Number of properties with purchase options that will be cancelled on termination | 19 | |
RIDEA Subsidiaries | RIDEA JV | ||
Lease Amendments and Terminations and Joint Venture Formations - disclosures | ||
Number of properties contributed to joint venture | 48 | |
RIDEA Subsidiaries | Brookdale Senior Living | RIDEA JV | ||
Lease Amendments and Terminations and Joint Venture Formations - disclosures | ||
Ownership percentage (as a percent) | 20.00% | |
CCRC JV | RIDEA JV | ||
Lease Amendments and Terminations and Joint Venture Formations - disclosures | ||
Ownership percentage (as a percent) | 49.00% | |
Number of retirement communities | 14 | |
CCRC JV | Brookdale Senior Living | RIDEA JV | ||
Lease Amendments and Terminations and Joint Venture Formations - disclosures | ||
Ownership percentage (as a percent) | 51.00% |
Real_Estate_Property_Investmen2
Real Estate Property Investments (Details) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Apr. 30, 2015 | Apr. 30, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 29, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Apr. 30, 2015 | Apr. 30, 2015 | |
USD ($) | USD ($) | USD ($) | Subsequent event | Subsequent event | Senior housing | Senior housing | Life science | Life science | Medical office | Medical office | Hospital | Post-acute/skilled | Post-acute/skilled | Post-acute/skilled | Senior housing, life science and medical office | Chartwell Retirement and Residences [Member] | Chartwell Retirement and Residences [Member] | Germantown TN Facility [Member] | Germantown TN Facility [Member] | |
USD ($) | HC-One Facility | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | property | USD ($) | USD ($) | USD ($) | Brookdale Senior Living | Senior housing | Subsequent event | Brookdale Senior Living | ||||
GBP (£) | property | Subsequent event | Brookdale Senior Living | USD ($) | Subsequent event | |||||||||||||||
property | USD ($) | Subsequent event | ||||||||||||||||||
item | property | |||||||||||||||||||
property | ||||||||||||||||||||
Acquisition | ||||||||||||||||||||
Number of facilities acquired | 35 | |||||||||||||||||||
Acquisition of facility | $72,000,000 | |||||||||||||||||||
Other real estate acquisitions | ||||||||||||||||||||
Consideration, Cash Paid | 34,248,000 | 34,068,000 | 5,473,000 | 180,000 | ||||||||||||||||
Loans and Leases Receivable, Gross | 41,000,000 | |||||||||||||||||||
Liabilities assumed | 626,000 | 626,000 | 1,000 | |||||||||||||||||
Consideration, Noncontrolling Interest | 1,306,000 | 1,306,000 | 1,152,000 | |||||||||||||||||
Assets Acquired, Real Estate | 34,530,000 | 34,350,000 | 6,626,000 | 180,000 | ||||||||||||||||
Assets Acquired, Net Intangibles | 1,650,000 | 1,650,000 | ||||||||||||||||||
Amount of facility converted into sale/leaseback | 174,000,000 | |||||||||||||||||||
Number of Facilities | 36 | 9 | ||||||||||||||||||
Deposit related to acquisition | 37,000,000 | |||||||||||||||||||
Payments to acquire productive assets | 64,793,000 | 49,068,000 | 161,000,000 | 16,172,000 | 6,950,000 | 27,391,000 | 26,762,000 | 19,233,000 | 12,975,000 | 37,000 | 1,960,000 | 2,381,000 | ||||||||
Number of Facilities Placed into Service | 2 | |||||||||||||||||||
Number of Leases | 2 | |||||||||||||||||||
Number of Beds Acquired | 5,025 | |||||||||||||||||||
Amount agreed to be paid | 849,000,000 | |||||||||||||||||||
Noncontrolling interest (as a percent) | 10.00% | 10.00% | ||||||||||||||||||
Management Agreement Term | 7 years | |||||||||||||||||||
Investment Building and Building Improvements | $10,980,848,000 | $10,972,973,000 | $25,000,000 |
Dispositions_of_Real_Estate_an2
Dispositions of Real Estate and Discontinued Operations (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2015 | |
item | property | |
Operating income from discontinued operations | ||
Rental and related revenues | $1,810,000 | |
Operating expenses | 54,000 | |
Other expenses, net | 20,000 | |
Income before gain on sales of real estate, net of income taxes | 1,736,000 | |
Gain on sales of real estate, net of income taxes | 28,010,000 | |
Number of properties included in discontinued operations | 3 | |
Post-acute/skilled | ||
Dispositions of Real Estate and Land | ||
Number of properties disposed | 2 | |
Total consideration for disposition of real estate | 22,000,000 | |
Hospital | ||
Dispositions of Real Estate and Land | ||
Total consideration for disposition of real estate | 17,000,000 | |
Senior housing | ||
Dispositions of Real Estate and Land | ||
Number of properties disposed | 8 | |
Total consideration for disposition of real estate | $51,000,000 |
Net_Investment_in_Direct_Finan2
Net Investment in Direct Financing Leases (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 29, 2015 | Apr. 01, 2015 | Dec. 31, 2014 | Sep. 30, 2013 | Mar. 30, 2015 | Dec. 31, 2011 | |
property | property | property | item | property | ||||
Net Investment in Direct Financing Leases | ||||||||
Minimum lease payments receivable | $26,825,121,000 | $24,182,525,000 | ||||||
Estimated residual values | 3,910,830,000 | 4,126,426,000 | ||||||
Less unearned income | -23,908,355,000 | -21,028,617,000 | ||||||
Net investment in direct financing leases | 6,827,596,000 | 7,280,334,000 | ||||||
Properties subject to direct financing leases | 363 | 363 | ||||||
Percentage of DFL Portfolio | 100.00% | |||||||
DFL income | 167,078,000 | 164,537,000 | ||||||
HCR III Healthcare, LLC [Member] | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Deferred lease obligation | 525,000,000 | |||||||
Direct Financing Lease Tranche A [Member] | HCR III Healthcare, LLC [Member] | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Expected Annual Rent | 19,000,000 | |||||||
Deferred lease obligation | 275,000,000 | |||||||
Direct Financing Lease Rental Factor, first period (as a percent) | 6.90% | |||||||
Direct Financing Lease Rental Factor, annual increase (as a percent) | 3.00% | |||||||
Direct Financing Lease Tranche B [Member] | HCR III Healthcare, LLC [Member] | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Deferred lease obligation | 250,000,000 | |||||||
Direct Financing Lease Rental Factor, first period (as a percent) | 3.00% | |||||||
Direct Financing Lease Rental Factor, second period (as a percent) | 4.00% | |||||||
Direct Financing Lease Rental Factor, third period (as a percent) | 5.00% | |||||||
Direct Financing Lease Rental Factor, fourth period (as a percent) | 6.00% | |||||||
Direct Financing Leases | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Cash proceeds from DFL portfolio | 5,000,000 | 6,000,000 | ||||||
Performing Loans | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 6,458,624,000 | |||||||
Watch List DFLs | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 368,972,000 | |||||||
Senior housing | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 1,562,875,000 | |||||||
Percentage of DFL Portfolio | 23.00% | |||||||
Senior housing | Direct Financing Leases | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 370,000,000 | |||||||
Properties subject to direct financing leases | 14 | |||||||
DFL income | 4,000,000 | 5,000,000 | ||||||
Senior housing | Performing Loans | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 1,193,903,000 | |||||||
Senior housing | Watch List DFLs | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 368,972,000 | |||||||
Post-acute/skilled | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 5,140,830,000 | |||||||
Number of Facilities | 9 | |||||||
Aggregate purchase price for facilities | 275,000,000 | |||||||
Percentage of DFL Portfolio | 75.00% | |||||||
Post-acute/skilled | Performing Loans | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 5,140,830,000 | |||||||
Hospital | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 123,891,000 | |||||||
Percentage of DFL Portfolio | 2.00% | |||||||
Hospital | Performing Loans | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 123,891,000 | |||||||
HCRMC | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Net investment in direct financing leases | 6,100,000 | 6,600,000 | ||||||
Properties subject to direct financing leases | 334 | |||||||
Annual rent under Master Agreement | 541,000,000 | 473,000,000 | ||||||
Number of non-strategic assets involved in sales transaction | 50 | |||||||
Annual rent reduction on sold properties, as a percent of the sales proceeds | 7.75% | |||||||
Minimum rent escalation during the initial term (as a percent) | 3.00% | |||||||
Period of extension of initial term of lease | 5 years | |||||||
Average lease term | 16 years | |||||||
Impairment charges related to investments in DFLs | 478,000,000 | |||||||
Increase in Rent (as a percent) | 3.50% | |||||||
Reduction in initial net annual rent due to lease amendment | 68,000,000 | |||||||
Investment ownership percentage | 9.40% | |||||||
Nine Specified Properties to be Acquired [Member] | ||||||||
Net Investment in Direct Financing Leases | ||||||||
Expected Annual Rent | $19,000,000 |
Loans_Receivable_Details
Loans Receivable (Details) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||||||||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Nov. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Jul. 31, 2012 | Jul. 31, 2012 | Jun. 30, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Feb. 28, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Nov. 30, 2014 | Apr. 30, 2015 | |
USD ($) | USD ($) | Performing Loans | Workout Loans | NHP[Member] | Real Estate Secured | Real Estate Secured | Real Estate Secured | Other Secured | Other Secured | Other Secured | Other Secured | Tandem Health Care Loan | Tandem Health Care Loan | Tandem Health Care Loan - First Tranche | Tandem Health Care Loan - Second Tranche | Delphis | Delphis | HC-One Facility | HC-One Facility | HC-One Facility | HC-One Facility | HC-One Facility | |
USD ($) | USD ($) | item | USD ($) | USD ($) | Performing Loans | USD ($) | USD ($) | Performing Loans | Workout Loans | USD ($) | Maximum | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | GBP (£) | USD ($) | Subsequent event | |||
property | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | ||||||||||||||||||
property | |||||||||||||||||||||||
Loans Receivable: | |||||||||||||||||||||||
Mezzanine | $930,587,000 | $799,064,000 | $930,587,000 | $799,064,000 | |||||||||||||||||||
Loan receivable, other | 122,514,000 | 135,363,000 | 122,514,000 | 135,363,000 | 205,000,000 | 100,000,000 | 102,000,000 | 363,000,000 | 574,000,000 | ||||||||||||||
Unamortized discounts, fees and costs | -14,413,000 | -14,056,000 | -14,413,000 | -14,056,000 | |||||||||||||||||||
Allowance for loan losses | -13,410,000 | -13,410,000 | -13,410,000 | -13,410,000 | |||||||||||||||||||
Loans receivable, net | 1,025,278,000 | 906,961,000 | 1,008,291,000 | 16,987,000 | 122,514,000 | 135,363,000 | 122,514,000 | 902,764,000 | 771,598,000 | 885,777,000 | 16,987,000 | ||||||||||||
Remaining commitments to fund development projects | 8,000,000 | ||||||||||||||||||||||
Percentage of Loan Portfolio | 100.00% | 12.00% | 88.00% | ||||||||||||||||||||
Number of facilities | 273 | 36 | |||||||||||||||||||||
Number of beds | 12,500 | ||||||||||||||||||||||
Loan facility maximum | 795,000,000 | 502,000,000 | 395,000,000 | ||||||||||||||||||||
Loan receivable term | 5 years | ||||||||||||||||||||||
Proceeds from Lines of Credit | 355,000,000 | ||||||||||||||||||||||
Increase in loan facility | 164,000,000 | 108,000,000 | |||||||||||||||||||||
Loan receivable subordinated to senior mortgage debt | 435,000,000 | ||||||||||||||||||||||
Loan receivable, interest rate payable (as a percent) | 12.00% | 14.00% | |||||||||||||||||||||
Loans receivable, net reported amount | 17,000,000 | 17,000,000 | |||||||||||||||||||||
Cash payments received from borrower | 500,000 | ||||||||||||||||||||||
Net repayments under bank line of credit | 455,506,000 | ||||||||||||||||||||||
Amount of facility converted into sale/leaseback | £ 174,000,000 |
Investments_in_and_Advances_to2
Investments in and Advances to Unconsolidated Joint Ventures (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 30, 2015 | Dec. 31, 2014 | |
item | ||||
Company owned interests in entities, accounted under equity method: | ||||
Cash paid | $71,373,000 | $5,473,000 | ||
Investments in and advances to unconsolidated joint ventures | 642,795,000 | 605,448,000 | ||
Investment reported in liabilities | -1,083,000 | |||
Number of unconsolidated joint ventures | 2 | |||
Brookdale Senior Living | CCRC JV | ||||
Company owned interests in entities, accounted under equity method: | ||||
Number of unconsolidated joint ventures | 2 | |||
CCRC JV Investment [Member] | Senior housing | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 49.00% | |||
Investments in and advances to unconsolidated joint ventures | 455,750,000 | |||
HCRMC | Post-acute/skilled | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 9.40% | |||
Investments in and advances to unconsolidated joint ventures | 51,649,000 | |||
MBK JV | ||||
Company owned interests in entities, accounted under equity method: | ||||
Debt related to retirement communities or properties contributed | 78,000,000 | |||
MBK JV | Senior housing | ||||
Company owned interests in entities, accounted under equity method: | ||||
Number of campuses | 3 | |||
Investment ownership percentage | 50.00% | 50.00% | ||
Cash paid | 27,000,000 | |||
Investments in and advances to unconsolidated joint ventures | 27,279,000 | |||
MBK JV | Senior housing | MBK Senior Living [Member] | ||||
Company owned interests in entities, accounted under equity method: | ||||
Number of retirement communities contributed to joint venture | 3 | |||
Fair value of retirement communities or properties contributed | 126,000,000 | |||
HCP Ventures III, LLC | Medical office | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 30.00% | |||
Investments in and advances to unconsolidated joint ventures | 6,658,000 | |||
HCP Ventures IV | Hospital and medical office segments | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 20.00% | |||
Investments in and advances to unconsolidated joint ventures | 26,206,000 | |||
HCP Life Science | Life science | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investments in and advances to unconsolidated joint ventures | 69,758,000 | |||
Number of unconsolidated joint ventures | 3 | |||
HCP Life Science | Life science | Minimum | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 50.00% | |||
HCP Life Science | Life science | Maximum | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 63.00% | |||
Torrey Pines Science Center, LP | Life science | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 50.00% | |||
Britannia Biotech Gateway, LP | Life science | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 55.00% | |||
LASDK, LP | Life science | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 63.00% | |||
Suburban Properties, LLC | Medical office | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 67.00% | |||
Investments in and advances to unconsolidated joint ventures | 5,312,000 | |||
Advances to unconsolidated joint ventures, net | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investments in and advances to unconsolidated joint ventures | 183,000 | |||
Edgewood Assisted Living Center, LLC | Senior housing | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 45.00% | |||
Investment reported in liabilities | -448,000 | |||
Seminole Shores Living Center, LLC | Senior housing | ||||
Company owned interests in entities, accounted under equity method: | ||||
Investment ownership percentage | 50.00% | |||
Investment reported in liabilities | ($635,000) |
Investments_in_and_Advances_to3
Investments in and Advances to Unconsolidated Joint Ventures - Combined Financial Information (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Summarized combined financial information for unconsolidated joint ventures: | |||
Real estate, net | $5,230,958,000 | $5,134,587,000 | |
Goodwill and other assets, net | 5,048,919,000 | 4,986,310,000 | |
Total assets | 10,279,877,000 | 10,120,897,000 | |
Capital lease obligations and mortgage debt | 7,218,361,000 | 7,197,940,000 | |
Accounts payable | 1,093,859,000 | 1,015,912,000 | |
Other partners' capital | 1,316,030,000 | 1,281,413,000 | |
HCP's capital | 651,627,000 | 625,632,000 | |
Total liabilities and partners' capital | 10,279,877,000 | 10,120,897,000 | |
Combined basis difference | 10,000,000 | ||
Total revenues | 1,166,454,000 | 1,067,491,000 | |
Loss from discontinued operations | 1,100,000 | -2,600,000 | |
Net income | 9,783,000 | 7,996,000 | |
HCP's share of earnings | 13,601,000 | 14,528,000 | |
Fees earned by HCP | 460,000 | 449,000 | |
Distributions received by HCP | 2,181,000 | 3,202,000 | |
HCRMC | Subsequent event | |||
Subsequent Events | |||
New cases filed | 3 | ||
HCRMC | Post-acute/skilled | |||
Summarized combined financial information for unconsolidated joint ventures: | |||
Recharacterized DFL income to equity income | $16,000,000 | $16,000,000 |
Intangibles_Details
Intangibles (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Intangibles | ||
Intangible assets, gross | $819 | $830 |
Intangible assets, accumulated amortization | 361 | 349 |
Intangible liabilities, gross | 207 | 209 |
Intangible liabilities, accumulated amortization | $127 | $124 |
Other_Assets_Details
Other Assets (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Other assets | ||
Straight-line rent assets, net of allowance of $34,231 and $34,182, respectively | $359,311,000 | $355,864,000 |
Allowance on straight-line rent assets | 34,231,000 | 34,182,000 |
Marketable debt securities | 221,379,000 | 231,442,000 |
Leasing costs, net | 158,347,000 | 146,500,000 |
Deferred financing costs, net | 52,597,000 | 47,592,000 |
Goodwill | 50,346,000 | 50,346,000 |
Other | 166,917,000 | 108,428,000 |
Total other assets | 1,008,897,000 | 940,172,000 |
Deposit related to acquisition | 37,000,000 | |
Loans receivables | 1,025,278,000 | 906,961,000 |
Brookdale Senior Living | ||
Other assets | ||
Loans receivables | 22,000,000 | 26,000,000 |
Number of installments | 8 | |
HCP Ventures IV | ||
Other assets | ||
Loans receivables | $17,000,000 | $15,000,000 |
Loan receivable, interest rate payable (as a percent) | 12.00% | 12.00% |
Debt_Details
Debt (Details) | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 12, 2015 | Mar. 31, 2015 | Jan. 12, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 12, 2015 | Mar. 31, 2015 | Jan. 12, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 21, 2015 | Jan. 21, 2015 | Aug. 14, 2014 | Aug. 14, 2014 | Feb. 21, 2014 | Feb. 21, 2014 | Feb. 01, 2014 | Feb. 01, 2014 | Mar. 01, 2015 | Mar. 01, 2015 | Jun. 14, 2014 | Jun. 14, 2014 | Jun. 14, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
USD ($) | USD ($) | Interest-rate swap contracts | Line of Credit and Term Loan | Bank Line of Credit | Bank Line of Credit | Bank Line of Credit | Term loans | Term loans | 2015 Term Loan [Member] | 2015 Term Loan [Member] | 2015 Term Loan [Member] | Senior Unsecured Notes | Senior Unsecured Notes | Senior Unsecured Notes | Senior Unsecured, 3.40% notes due 2025 | Senior Unsecured, 3.40% notes due 2025 | Senior Unsecured, 3.875% notes due 2024 | Senior Unsecured, 3.875% notes due 2024 | Senior Unsecured, 4.20% notes due 2024 | Senior Unsecured, 4.20% notes due 2024 | Senior unsecured notes, 2.7% | Senior unsecured notes, 2.7% | Senior Unsecured Debt 6.0 Percent Incepted March 1, 2015 [Member] | Senior Unsecured Debt 6.0 Percent Incepted March 1, 2015 [Member] | Senior Unsecured Debt 6.0 Percent Incepted June 14, 2014 [Member] | Senior Unsecured Debt 6.0 Percent Incepted June 14, 2014 [Member] | Senior Unsecured Debt LIBOR [Member] | Mortgage Debt | Mortgage Debt | Mortgage Debt | Demand Note | Non-interest Bearing Life Care Bonds | |
item | GBP (£) | USD ($) | GBP (£) | USD ($) | GBP (£) | USD ($) | GBP (£) | USD ($) | Minimum | Maximum | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Minimum | Maximum | USD ($) | USD ($) | ||||||||
item | |||||||||||||||||||||||||||||||||
Debt Instrument | |||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $2,000,000,000 | ||||||||||||||||||||||||||||||||
Length of debt instrument extension period | 1 year | 1 year | |||||||||||||||||||||||||||||||
Derivative, fixed interest rate (as a percent) | 1.79% | ||||||||||||||||||||||||||||||||
Debt instrument, variable rate basis | LIBOR | GBP LIBOR | |||||||||||||||||||||||||||||||
Debt instrument, basis spread on variable rate (as a percent) | 0.93% | 0.98% | |||||||||||||||||||||||||||||||
Debt instrument, facility fee (as a percent) | 0.15% | ||||||||||||||||||||||||||||||||
Line of credit facility additional aggregate amount, maximum | 500,000,000 | ||||||||||||||||||||||||||||||||
Bank line of credit | 358,555,000 | 838,516,000 | 359,000,000 | 242,000,000 | |||||||||||||||||||||||||||||
Weighted-average interest rate (as a percent) | 1.72% | 4.82% | 6.15% | ||||||||||||||||||||||||||||||
Debt instruments, carrying amount | 357,000,000 | 327,000,000 | 220,000,000 | ||||||||||||||||||||||||||||||
Maturity period of debt instruments | 4 years | ||||||||||||||||||||||||||||||||
Repayments of Lines of Credit | 220,000,000 | ||||||||||||||||||||||||||||||||
Term of the interest rate swap agreement | 3 years | ||||||||||||||||||||||||||||||||
Debt instrument, covenant debt to assets (as a percent) | 60.00% | ||||||||||||||||||||||||||||||||
Debt instrument, covenant secured debt to assets (as a percent) | 30.00% | ||||||||||||||||||||||||||||||||
Debt instrument, covenant unsecured debt to unencumbered assets (as a percent) | 60.00% | ||||||||||||||||||||||||||||||||
Debt instrument, covenant minimum fixed charge coverage ratio | 1.5 | ||||||||||||||||||||||||||||||||
Debt instrument, covenant net worth | 9,500,000,000 | ||||||||||||||||||||||||||||||||
Senior unsecured notes | 8,022,533,000 | 7,626,194,000 | 8,100,000,000 | ||||||||||||||||||||||||||||||
Issuance of senior unsecured notes | 600,000,000 | 800,000,000 | 350,000,000 | ||||||||||||||||||||||||||||||
Stated interest rate (as a percent) | 2.79% | 6.99% | 3.40% | 3.88% | 4.20% | 2.70% | 6.00% | 6.00% | 0.42% | 8.38% | 4.50% | ||||||||||||||||||||||
Net proceeds from issuance of senior unsecured notes | 591,000,000 | 792,000,000 | 346,000,000 | ||||||||||||||||||||||||||||||
Repayment of senior unsecured notes | 400,000,000 | 200,000,000 | 62,000,000 | 25,000,000 | |||||||||||||||||||||||||||||
Weighted-average maturity | 6 years | 3 years | |||||||||||||||||||||||||||||||
2015 (Nine months) | 235,549,000 | 200,000,000 | 35,549,000 | ||||||||||||||||||||||||||||||
2016 | 1,395,626,000 | 203,404,000 | 900,000,000 | 292,222,000 | |||||||||||||||||||||||||||||
2017 | 1,331,891,000 | 750,000,000 | 581,891,000 | ||||||||||||||||||||||||||||||
2018 | 965,138,000 | 358,555,000 | 600,000,000 | 6,583,000 | |||||||||||||||||||||||||||||
2019 | 778,706,000 | 326,634,000 | 450,000,000 | 2,072,000 | |||||||||||||||||||||||||||||
Thereafter | 5,213,170,000 | 5,150,000,000 | 63,170,000 | ||||||||||||||||||||||||||||||
Total debt before discount, net | 9,920,080,000 | 358,555,000 | 530,038,000 | 8,050,000,000 | 981,487,000 | ||||||||||||||||||||||||||||
Discounts, net | -29,064,000 | -27,467,000 | -1,597,000 | ||||||||||||||||||||||||||||||
Number of healthcare facilities used to secure debt | 70 | ||||||||||||||||||||||||||||||||
Debt instrument, collateral, healthcare facilities carrying value | 1,300,000,000 | ||||||||||||||||||||||||||||||||
Portion of other debt and occupancy fee deposits excluded from schedule of debt maturities | $95,747,000 | $97,022,000 | $26,000,000 | $70,000,000 | |||||||||||||||||||||||||||||
Number of CCRC issuing non-interest life care bonds | 2 | ||||||||||||||||||||||||||||||||
Number of facilities with non-interest bearing occupancy fee deposits | 2 |
Commitment_and_Contingencies_D
Commitment and Contingencies (Details) (HCP Ventures IV, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Liquidity Support Arrangement | |
Ownership percentage (as a percent) | 20.00% |
Third party debt collateralized by facilities, debt amount | $107 |
Indirect Guarantee of Indebtedness [Member] | |
Liquidity Support Arrangement | |
Third party debt collateralized by facilities, debt amount | 107 |
Shortfall Loan for Capital Expenditures [Member] | |
Liquidity Support Arrangement | |
Capital expenditures to be funded, maximum | 24.5 |
Loss Contingency, Receivable | $17 |
Annual interest rate (as a percent) | 12.00% |
Equity_Details
Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | |||
Share data in Thousands, except Per Share data, unless otherwise specified | Apr. 30, 2015 | Jan. 29, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Equity | |||||
Dividends declared per common share (in dollars per share) | $0.56 | $0.56 | $0.56 | $0.55 | |
Company's common stock issuances | |||||
Repurchase of common stock | $6,096,000 | $8,068,000 | |||
Accumulated Other Comprehensive Loss | |||||
Cumulative foreign currency translation adjustment | -17,710,000 | -10,747,000 | |||
Unrealized losses on cash flow hedges, net | -7,291,000 | -9,624,000 | |||
Supplemental Executive Retirement Plan minimum liability | -3,468,000 | -3,537,000 | |||
Unrealized gains on available for sale securities | 8,000 | 13,000 | |||
Total accumulated other comprehensive loss | -28,461,000 | -23,895,000 | |||
Noncontrolling interests | |||||
DownREIT unit, carrying value | 186,979,000 | 188,588,000 | |||
Common Stock | |||||
Company's common stock issuances | |||||
Dividend Reinvestment and Stock Purchase Plan (in shares) | 829 | 875 | |||
Conversion of DownREIT units (in shares) | 38 | 2 | |||
Exercise of stock options (in shares) | 811 | 4 | |||
Vesting of restricted stock units (in shares) | 288 | 411 | |||
Repurchase of common stock | 128,000 | 208,000 | |||
Noncontrolling Interests | |||||
Noncontrolling interests | |||||
Non-managing members DownREIT units outstanding | 4,000,000 | ||||
Number of DownREIT LLCs | 5 | ||||
DownREIT unit, carrying value | 187,000,000 | ||||
DownREIT unit, fair value | $261,000,000 |
Segment_Disclosures_Details
Segment Disclosures (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
item | ||
Segment reporting information, revenues | ||
Number of reportable segments | 5 | |
Rental Revenues | $472,056 | $474,794 |
Resident Fees and Services | 105,013 | 38,053 |
Interest Income | 33,262 | 16,696 |
Investment Management Fee Income | 460 | 449 |
Total revenues | 610,791 | 529,992 |
NOI | 445,038 | 437,140 |
Adjusted (Cash) NOI | 415,853 | 400,993 |
Senior housing | ||
Segment reporting information, revenues | ||
Rental Revenues | 127,382 | 150,085 |
Resident Fees and Services | 105,013 | 38,053 |
Interest Income | 7,394 | 3,284 |
Total revenues | 239,789 | 191,422 |
NOI | 156,885 | 163,590 |
Adjusted (Cash) NOI | 150,472 | 150,375 |
Post-acute/skilled | ||
Segment reporting information, revenues | ||
Rental Revenues | 140,576 | 137,780 |
Interest Income | 25,868 | 13,412 |
Total revenues | 166,444 | 151,192 |
NOI | 140,043 | 137,248 |
Adjusted (Cash) NOI | 121,960 | 118,099 |
Life science | ||
Segment reporting information, revenues | ||
Rental Revenues | 83,551 | 76,122 |
Investment Management Fee Income | 1 | 1 |
Total revenues | 83,552 | 76,123 |
NOI | 66,852 | 61,961 |
Adjusted (Cash) NOI | 63,777 | 58,829 |
Medical office | ||
Segment reporting information, revenues | ||
Rental Revenues | 98,305 | 89,262 |
Investment Management Fee Income | 459 | 448 |
Total revenues | 98,764 | 89,710 |
NOI | 60,053 | 53,746 |
Adjusted (Cash) NOI | 58,187 | 53,029 |
Hospital | ||
Segment reporting information, revenues | ||
Rental Revenues | 22,242 | 21,545 |
Total revenues | 22,242 | 21,545 |
NOI | 21,205 | 20,595 |
Adjusted (Cash) NOI | $21,457 | $20,661 |
Segment_Disclosures_NOI_Detail
Segment Disclosures - NOI (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reconciliation of reported net (loss) income to NOI and adjusted NOI | ||
Net (loss) income | ($237,503) | $263,623 |
Interest income | -33,262 | -16,696 |
Investment management fee income | -460 | -449 |
Interest expense | 116,780 | 106,638 |
Depreciation and amortization | 114,522 | 107,388 |
General and administrative | 24,773 | 20,899 |
Acquisition and pursuit costs | 3,390 | 495 |
Impairments | 478,464 | |
Gain on sales of real estate, net of income taxes | -6,264 | |
Other non-operating income, net | -1,724 | -1,930 |
Income taxes (benefit) provision | -77 | 1,446 |
Equity income from unconsolidated joint ventures | -13,601 | -14,528 |
Total discontinued operations | -29,746 | |
NOI | 445,038 | 437,140 |
Straight-line rents | -9,546 | -13,968 |
DFL accretion | -20,304 | -21,422 |
Amortization of above and below market lease intangibles, net | -378 | -168 |
Lease termination fees | 1,043 | -578 |
NOI adjustments related to discontinued operations | -11 | |
Adjusted (Cash) NOI | $415,853 | $400,993 |
Segment_Disclosures_Assets_Det
Segment Disclosures - Assets (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Segment Disclosure | ||||
Total assets | $21,024,442 | [1] | $21,369,940 | [1] |
Goodwill | 50,346 | 50,346 | ||
Operating segment | ||||
Segment Disclosure | ||||
Gross assets | 22,743,148 | 23,042,397 | ||
Accumulated depreciation and amortization | -2,680,584 | -2,600,072 | ||
Total assets | 20,062,564 | 20,442,325 | ||
Operating segment | Senior housing | ||||
Segment Disclosure | ||||
Gross assets | 8,445,616 | 8,383,345 | ||
Goodwill | 31,000 | 31,000 | ||
Operating segment | Post-acute/skilled | ||||
Segment Disclosure | ||||
Gross assets | 6,488,822 | 6,875,122 | ||
Goodwill | 3,000 | 3,000 | ||
Operating segment | Life science | ||||
Segment Disclosure | ||||
Gross assets | 4,171,320 | 4,154,789 | ||
Operating segment | Medical office | ||||
Segment Disclosure | ||||
Gross assets | 2,997,583 | 2,988,888 | ||
Goodwill | 11,000 | 11,000 | ||
Operating segment | Hospital | ||||
Segment Disclosure | ||||
Gross assets | 639,807 | 640,253 | ||
Goodwill | 5,000 | 5,000 | ||
Other non-segment | ||||
Segment Disclosure | ||||
Total assets | $961,878 | $927,615 | ||
[1] | The Company’s consolidated total assets at March 31, 2015 and December 31, 2014 include assets of certain variable interest entities (“VIEsâ€) that can only be used to settle the liabilities of those VIEs. Total assets at March 31, 2015 include VIE assets as follows: buildings and improvements $699 million; land $114 million; accumulated depreciation and amortization $120 million; accounts receivable $15 million; cash $36 million; and other assets, net $14 million. Total assets at December 31, 2014 include VIE assets as follows: buildings and improvements $677 million; land $113 million; accumulated depreciation and amortization $111 million; accounts receivable $5 million; cash $42 million; and other assets, net of $23 million from VIEs. See Note 17 to the Consolidated Financial Statements for additional information. |
Earnings_Per_Common_Share_Deta
Earnings Per Common Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Numerator | ||
(Loss) income from continuing operations | ($237,503) | $233,877 |
Noncontrolling interests' share in continuing operations | -3,111 | -3,335 |
(Loss) income from continuing operations applicable to HCP, Inc. | -240,614 | 230,542 |
Participating securities' share in earnings | -335 | -1,064 |
(Loss) income from continuing operations applicable to common shares | -240,949 | 229,478 |
Discontinued operations | 29,746 | |
Noncontrolling interests' share in discontinued operations | -1,177 | |
Net (loss) income applicable to common shares | ($240,949) | $258,047 |
Denominator | ||
Basic weighted average common shares | 460,880,000 | 457,294,000 |
Dilutive potential common shares | 380,000 | |
Diluted weighted average common shares | 460,880,000 | 457,674,000 |
Basic earnings per common share | ||
(Loss) income from continuing operations (in dollars per share) | ($0.52) | $0.50 |
Discontinued operations (in dollars per share) | $0.06 | |
Net (loss) income applicable to common shares (in dollars per share) | ($0.52) | $0.56 |
Diluted earnings per common share | ||
(Loss) income from continuing operations (in dollars per share) | ($0.52) | $0.50 |
Discontinued operations (in dollars per share) | $0.06 | |
Net (loss) income applicable to common shares (in dollars per share) | ($0.52) | $0.56 |
Common Stock Options | ||
Diluted earnings per common share | ||
Shares of anti-dilutive securities excluded from earnings per share calculation | 500,000 | 1,600,000 |
Down REIT | ||
Diluted earnings per common share | ||
Shares of anti-dilutive securities excluded from earnings per share calculation | 6,000,000 | |
DownREIT LLCs, non-managing member units outstanding | 4,000,000 | |
Restricted Stock and Performance Restricted Stock Units | ||
Diluted earnings per common share | ||
Shares of anti-dilutive securities excluded from earnings per share calculation | 400,000 | 900,000 |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Supplemental cash flow information: | ||
Interest paid, net of capitalized interest | $168,165 | $152,423 |
Income taxes paid | 383 | 629 |
Capitalized interest | 1,698 | 3,125 |
Supplemental schedule of non-cash investing activities: | ||
Accrued construction costs | 32,236 | 21,715 |
Supplemental schedule of non-cash financing activities: | ||
Vesting of restricted stock units | 288 | 411 |
Cancellation of restricted stock | -1 | |
Conversion of non-managing member units into common stock | 1,608 | 73 |
Noncontrolling interest issued in connection with real estate acquisition | 1,306 | 1,152 |
Noncontrolling interest assumed in connection with real estate disposition | 1,671 | |
Mortgages and other liabilities assumed with real estate acquisitions | 626 | 1 |
Unrealized gains (losses) on available-for-sale securities and derivatives designated as cash flow hedges, net | $2,334 | ($692) |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
item | |
Company's involvement with VIEs: | |
Number of unconsolidated joint ventures | 2 |
Delphis | |
Company's involvement with VIEs: | |
Number of partnerships, which are tenants of the company | 1 |
Unconsolidated Variable Interest Entities | |
Company's involvement with VIEs: | |
Number of senior housing facilities leased | 48 |
Number of VIE tenants | 7 |
CCRC OpCo | |
Company's involvement with VIEs: | |
Maximum Loss Exposure | 245,321,000 |
Assets/liability type | Investments in unconsolidated joint ventures |
Carrying amount | 245,321,000 |
HCP Ventures IV | |
Company's involvement with VIEs: | |
Maximum Loss Exposure | 157,706,000 |
Assets/liability type | Investments in unconsolidated joint ventures |
Carrying amount | 26,206,000 |
Committed support | 107,000,000 |
Ownership percentage (as a percent) | 20.00% |
VIE tenants-operating leases | |
Company's involvement with VIEs: | |
Maximum Loss Exposure | 12,341,000 |
Assets/liability type | Lease intangibles, net and straight-line rent receivables |
Carrying amount | 12,341,000 |
VIE tenants-DFLs | |
Company's involvement with VIEs: | |
Maximum Loss Exposure | 599,414,000 |
Assets/liability type | Net investment in DFLs |
Carrying amount | 599,414,000 |
Loan-senior secured | |
Company's involvement with VIEs: | |
Maximum Loss Exposure | 16,987,000 |
Assets/liability type | Loans receivable, net |
Carrying amount | 16,987,000 |
CMBS | |
Company's involvement with VIEs: | |
Maximum Loss Exposure | 17,546,000 |
Assets/liability type | Marketable debt securities |
Carrying amount | 17,546,000 |
Consolidated Variable Interest Entities | |
Company's involvement with VIEs: | |
Ownership percentage (as a percent) | 80.00% |
RIDEA JV | |
Company's involvement with VIEs: | |
Ownership percentage (as a percent) | 90.00% |
Concentration_of_Credit_Risk_D
Concentration of Credit Risk (Details) (USD $) | 3 Months Ended | 0 Months Ended | 12 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 29, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
item | property | ||||||
Concentration of risk | |||||||
Number of RIDEA joint ventures | 2 | ||||||
Balance Sheets: | |||||||
Real estate and other property, net | $10,837,025,000 | 10,886,887,000 | |||||
Cash and cash equivalents | 137,170,000 | 49,738,000 | 183,810,000 | 300,556,000 | |||
Goodwill, intangible and other assets, net | 1,008,897,000 | 940,172,000 | |||||
Total assets | 21,024,442,000 | [1] | 21,369,940,000 | [1] | |||
Accounts payable, accrued liabilities and other | 314,226,000 | 432,934,000 | |||||
Total equity | 10,555,646,000 | 10,969,573,000 | 10,997,099,000 | 10,931,134,000 | |||
Total liabilities and equity | 21,024,442,000 | 21,369,940,000 | |||||
Income Statements: | |||||||
Revenues | 610,791,000 | 529,992,000 | |||||
Depreciation and amortization expense | -114,522,000 | -107,388,000 | |||||
Interest expense | -116,780,000 | -106,638,000 | |||||
Income tax expense | 77,000 | -1,446,000 | |||||
(Loss) income from continuing operations | -237,503,000 | 233,877,000 | |||||
Income (loss) from discontinued operations, net of taxes | 29,746,000 | ||||||
Net (loss) income | -237,503,000 | 263,623,000 | |||||
Brookdale Senior Living | Maximum | |||||||
Income Statements: | |||||||
Percentage of EDITDAR payable as base management fee | 5.00% | ||||||
Brookdale Senior Living | Minimum | |||||||
Income Statements: | |||||||
Percentage of EDITDAR payable as base management fee | 4.50% | ||||||
Brookdale Senior Living | CCRC JV | |||||||
Concentration of risk | |||||||
Number of RIDEA joint ventures | 2 | ||||||
HCRMC | |||||||
Balance Sheets: | |||||||
Real estate and other property, net | 2,915,400,000 | 2,934,400,000 | |||||
Cash and cash equivalents | 141,600,000 | 127,900,000 | |||||
Goodwill, intangible and other assets, net | 4,646,100,000 | 4,621,700,000 | |||||
Total assets | 7,703,100,000 | 7,684,000,000 | |||||
Debt and financing obligations | 6,071,000,000 | 6,108,300,000 | |||||
Accounts payable, accrued liabilities and other | 975,600,000 | 932,700,000 | |||||
Total equity | 656,500,000 | 643,000,000 | |||||
Total liabilities and equity | 7,703,100,000 | 7,684,000,000 | |||||
Income Statements: | |||||||
Revenues | 1,054,000,000 | 1,041,900,000 | |||||
Operating, general and administrative expense | -897,900,000 | -888,800,000 | |||||
Depreciation and amortization expense | -35,900,000 | -35,200,000 | |||||
Interest expense | -100,300,000 | -102,300,000 | |||||
Other income, net | 2,800,000 | 2,900,000 | |||||
Income from continuing operations before income tax expense | 22,700,000 | 18,500,000 | |||||
Income tax expense | -10,100,000 | -7,500,000 | |||||
(Loss) income from continuing operations | 12,600,000 | 11,000,000 | |||||
Income (loss) from discontinued operations, net of taxes | 1,100,000 | -2,600,000 | |||||
Net (loss) income | 13,700,000 | 8,400,000 | |||||
Senior housing | |||||||
Income Statements: | |||||||
Revenues | 239,789,000 | 191,422,000 | |||||
Post-acute/skilled | |||||||
Income Statements: | |||||||
Revenues | $166,444,000 | $151,192,000 | |||||
Number of Facilities | 9 | ||||||
Management and Accounting Services | Senior housing | Brookdale Senior Living | |||||||
Income Statements: | |||||||
Number of Facilities | 70 | ||||||
Management agreement renewal term (in years) | 5 years | ||||||
Management and Accounting Services | Senior housing | Brookdale Senior Living | Maximum | |||||||
Income Statements: | |||||||
Management agreement term (in years) | 15 years | ||||||
Management and Accounting Services | Senior housing | Brookdale Senior Living | Minimum | |||||||
Income Statements: | |||||||
Management agreement term (in years) | 10 years | ||||||
Assets | Post-acute/skilled | HCRMC | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 79.00% | 82.00% | |||||
Assets | Tenants and Operators | Brookdale Senior Living | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 13.00% | 13.00% | |||||
Assets | Tenants and Operators | HCRMC | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 29.00% | 31.00% | |||||
Assets | Tenants and Operators | Senior housing | Brookdale Senior Living | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 32.00% | 36.00% | |||||
Assets | Tenants and Operators | Senior housing | HCRMC | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 11.00% | 11.00% | |||||
Revenue | Post-acute/skilled | HCRMC | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 80.00% | 86.00% | |||||
Revenue | Tenants and Operators | Brookdale Senior Living | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 10.00% | 17.00% | |||||
Revenue | Tenants and Operators | HCRMC | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 25.00% | 28.00% | |||||
Revenue | Tenants and Operators | Senior housing | Brookdale Senior Living | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 25.00% | 46.00% | |||||
Revenue | Tenants and Operators | Senior housing | HCRMC | |||||||
Concentration of risk | |||||||
Concentration risk (as a percent) | 8.00% | 10.00% | |||||
[1] | The Company’s consolidated total assets at March 31, 2015 and December 31, 2014 include assets of certain variable interest entities (“VIEsâ€) that can only be used to settle the liabilities of those VIEs. Total assets at March 31, 2015 include VIE assets as follows: buildings and improvements $699 million; land $114 million; accumulated depreciation and amortization $120 million; accounts receivable $15 million; cash $36 million; and other assets, net $14 million. Total assets at December 31, 2014 include VIE assets as follows: buildings and improvements $677 million; land $113 million; accumulated depreciation and amortization $111 million; accounts receivable $5 million; cash $42 million; and other assets, net of $23 million from VIEs. See Note 17 to the Consolidated Financial Statements for additional information. |
Fair_Value_Measurements_recurr
Fair Value Measurements - recurring basis (Details) (Fair value on a recurring basis, USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Fair Value | |
Fair value assets and liabilities measured on recurring basis: | |
Marketable equity securities | $38 |
Total fair value, net asset (liability) | -1,175 |
Fair Value | Interest-rate swap contracts | |
Fair value assets and liabilities measured on recurring basis: | |
Derivative liabilities | -7,820 |
Fair Value | Currency Swap | |
Fair value assets and liabilities measured on recurring basis: | |
Derivative assets | 3,603 |
Fair Value | Warrants | |
Fair value assets and liabilities measured on recurring basis: | |
Derivative assets | 3,004 |
Level 1 | |
Fair value assets and liabilities measured on recurring basis: | |
Marketable equity securities | 38 |
Total fair value, net asset (liability) | 38 |
Level 2 | |
Fair value assets and liabilities measured on recurring basis: | |
Total fair value, net asset (liability) | -4,217 |
Level 2 | Interest-rate swap contracts | |
Fair value assets and liabilities measured on recurring basis: | |
Derivative liabilities | -7,820 |
Level 2 | Currency Swap | |
Fair value assets and liabilities measured on recurring basis: | |
Derivative assets | 3,603 |
Level 3 | |
Fair value assets and liabilities measured on recurring basis: | |
Total fair value, net asset (liability) | 3,004 |
Level 3 | Warrants | |
Fair value assets and liabilities measured on recurring basis: | |
Derivative assets | $3,004 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of financial instruments | ||
Bank line of credit | $358,555 | $838,516 |
Senior unsecured notes | 8,022,533 | 7,626,194 |
Mortgage debt | 979,890 | 984,431 |
Other debt | 95,747 | 97,022 |
Carrying Value | ||
Summary of financial instruments | ||
Loans receivable, net | 1,025,278 | 906,961 |
Marketable debt securities | 221,379 | 231,442 |
Marketable equity securities | 38 | 43 |
Bank line of credit | 358,555 | 838,516 |
Term loan | 530,038 | 213,610 |
Senior unsecured notes | 8,022,533 | 7,626,194 |
Mortgage debt | 979,890 | 984,431 |
Other debt | 95,747 | 97,022 |
Derivative assets | 178 | |
Derivative liabilities | 7,820 | 7,663 |
Carrying Value | Warrants | ||
Summary of financial instruments | ||
Derivative assets | 3,004 | 2,220 |
Carrying Value | Currency Swap | ||
Summary of financial instruments | ||
Derivative assets | 3,603 | 929 |
Fair Value | ||
Summary of financial instruments | ||
Marketable equity securities | 43 | |
Bank line of credit | 358,555 | 838,516 |
Fair Value | Level 1 | ||
Summary of financial instruments | ||
Marketable debt securities | 229,881 | 252,125 |
Marketable equity securities | 38 | |
Senior unsecured notes | 8,579,285 | 8,187,458 |
Fair Value | Level 2 | ||
Summary of financial instruments | ||
Loans receivable, net | 1,040,540 | 898,522 |
Term loan | 530,038 | 213,610 |
Mortgage debt | 1,039,562 | 1,025,091 |
Other debt | 95,747 | 97,022 |
Derivative assets | 178 | |
Derivative liabilities | 7,820 | 7,663 |
Fair Value | Warrants | Level 3 | ||
Summary of financial instruments | ||
Derivative assets | 3,004 | 2,220 |
Fair Value | Currency Swap | ||
Summary of financial instruments | ||
Derivative assets | $3,603 | $929 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Jan. 12, 2015 | Jan. 12, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 12, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | USD ($) | USD ($) | GBP (£) | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Cash flow hedge | Interest rate swap, entered in July 2005, maturity in July 2020 | Interest rate swap, entered in July 2005, maturity in July 2020 | Interest rate swap, entered in July 2005, maturity in July 2020 | Interest rate swap, entered in July 2005, maturity in July 2020 | Interest rate swap, entered in November 2008, maturity in October 2016 | Interest rate swap, entered in November 2008, maturity in October 2016 | Interest rate swap, entered in November 2008, maturity in October 2016 | Interest rate swap, entered in July 2012, maturity in June 2016 | Interest rate swap, entered in July 2012, maturity in June 2016 | Interest rate swap, entered in July 2012, maturity in June 2016 | Interest rate swap, entered in July 2012, maturity in June 2016 | Interest rate swap, entered in January 2015, maturity in October 2017 | Interest rate swap, entered in January 2015, maturity in October 2017 | Interest rate swap, entered in January 2015, maturity in October 2017 | Interest rate swap, entered in January 2015, maturity in October 2017 | Interest rate swap, entered in January 2015, maturity in October 2017 | Currency swap, entered in July 2012, maturity in June 2016 | Currency swap, entered in July 2012, maturity in June 2016 | Currency swap, entered in July 2012, maturity in June 2016 | Currency swap, entered in July 2012, maturity in June 2016 | Currency swap, entered July 2014, maturity in December 2015 | Currency swap, entered July 2014, maturity in December 2015 | Currency swap, entered July 2014, maturity in December 2015 | Currency swap, entered July 2014, maturity in December 2015 | Currency swap, entered in January 2015, maturity in October 2017 | Currency swap, entered in January 2015, maturity in October 2017 | Currency swap, entered in January 2015, maturity in October 2017 | Currency swap, entered in January 2015, maturity in October 2017 | |
Reclassification out of Accumulated Other Comprehensive Income | USD ($) | USD ($) | BMA Swap Index | Cash flow hedge | Cash flow hedge | USD ($) | LIBOR | Cash flow hedge | USD ($) | GBP LIBOR | GBP LIBOR | Cash flow hedge | USD ($) | GBP (£) | GBP LIBOR | GBP LIBOR | Cash flow hedge | USD ($) | GBP (£) | Cash flow hedge | Cash flow hedge | USD ($) | GBP (£) | Cash flow hedge | Cash flow hedge | USD ($) | GBP (£) | Cash flow hedge | Cash flow hedge | |||||
USD ($) | USD ($) | item | BMA Swap Index | USD ($) | LIBOR | USD ($) | GBP (£) | GBP LIBOR | USD ($) | GBP (£) | GBP LIBOR | USD ($) | GBP (£) | USD ($) | GBP (£) | USD ($) | GBP (£) | |||||||||||||||||
Derivative | ||||||||||||||||||||||||||||||||||
Fixed Rate/Buy Amount (as a percent) | 3.82% | 5.95% | 1.81% | 1.79% | ||||||||||||||||||||||||||||||
Floating/Exchange Rate Index, percentage | 1.50% | 1.20% | 0.98% | 0.98% | ||||||||||||||||||||||||||||||
Buy (sell) amount | £ 7,200,000 | £ 400,000 | £ 1,000,000 | |||||||||||||||||||||||||||||||
Notional amount | 45,600,000 | 25,600,000 | 137,000,000 | 220,000,000 | 220,000,000 | 21,700,000 | 3,300,000 | 32,500,000 | ||||||||||||||||||||||||||
Semi-annual buy (sell) amount | 1,500,000 | 1,000,000 | 34,100,000 | 5,600,000 | 49,300,000 | |||||||||||||||||||||||||||||
Fair value of interest rate hedge, assets | -6,129,000 | -1,540,000 | -84,000 | -67,000 | ||||||||||||||||||||||||||||||
Fair value of foreign currency hedge, assets | 1,887,000 | 732,000 | 983,000 | |||||||||||||||||||||||||||||||
Number of interest-rate swap contracts | 3 | |||||||||||||||||||||||||||||||||
Exchange rate USD/GBP | 1.5149 | 1.5149 | 1.5695 | 1.5695 | 1.706 | 1.706 | 1.5149 | 1.5149 | ||||||||||||||||||||||||||
Gains or losses recorded to accumulated other comprehensive loss reclassified to earnings | -237,503,000 | 263,623,000 | 0 | |||||||||||||||||||||||||||||||
Effects of Change in Interest Rates | ||||||||||||||||||||||||||||||||||
+50 Basis Points | 1,082,000 | 200,000 | 1,242,000 | 4,165,000 | 1,745,000 | 711,000 | 831,000 | |||||||||||||||||||||||||||
-50 Basis Points | (1,184,000) | -190,000 | -1,205,000 | -4,180,000 | 2,067,000 | 760,000 | 1,313,000 | |||||||||||||||||||||||||||
+100 Basis Points | 2,215,000 | 396,000 | 2,466,000 | 8,338,000 | 1,584,000 | 687,000 | 590,000 | |||||||||||||||||||||||||||
-100 Basis Points | (2,317,000) | -386,000 | -2,429,000 | -8,353,000 | 2,228,000 | 784,000 | 1,554,000 | |||||||||||||||||||||||||||
Reclassification of unrealized gains into other income (expense), ineffectiveness | $100,000 |