IRVINE, Calif., Oct. 31, 2018 /PRNewswire/ -- HCP, Inc.
(NYSE: HCP) today announced results for the third quarter ended September 30, 2018. For the quarter, we generated net
income of $0.21 per share, FFO of $0.33 per share and FFO as adjusted
of $0.44 per share.
QUARTERLY AND RECENT HIGHLIGHTS
– Under contract to sell our Shoreline Technology Center campus in Mountain
View, California for gross proceeds of $1.0 billion
– Signed 460,000 square feet of leases at our South San Francisco
developments; both Phase I of The Shore at Sierra Point and Phase IV of The Cove are now 100% pre-leased
– Created a program with HCA Healthcare to develop primarily on-campus MOBs; commenced first project,
a $26 million on-campus MOB in Myrtle Beach, South Carolina
– Closed on the previously announced $605 million joint venture with Morgan Stanley Real
Estate Investing in a two million square foot medical office portfolio
– Completed the sale of 17 senior housing communities to an investment fund managed by affiliates of
Apollo Global Management for $264 million and expect the remaining two assets in the portfolio to close by year-end for
approximately $113 million
– Completed 35 senior housing operator transitions from Brookdale Senior Living, Inc. ("Brookdale") with four additional transitions expected to be completed by year-end
– Completed the early redemption of all $700 million of our 5.375% senior notes due 2021
using proceeds from capital recycling
– Named to the Dow Jones Sustainability Index and received the Green Star designation from GRESB, our
sixth and seventh year, respectively, receiving these prestigious awards
– Achieved total portfolio year-over-year SPP Cash NOI growth of 1.7% in the third quarter
– Reaffirmed 2018 FFO as adjusted and full-year 2018 SPP Cash NOI guidance ranges
|
Three Months Ended
September 30, 2018
|
|
Three Months Ended
September 30, 2017
|
(in thousands, except per share amounts)
|
Amount
|
|
Diluted
Per Share
|
|
Amount
|
|
Diluted
Per Share
|
Net income (loss)
|
$
|
98,946
|
|
|
$
|
0.21
|
|
|
$
|
(7,788)
|
|
|
$
|
(0.02)
|
|
FFO
|
$
|
155,632
|
|
|
$
|
0.33
|
|
|
$
|
155,248
|
|
|
$
|
0.33
|
|
Transaction-related items
|
4,678
|
|
|
0.01
|
|
|
580
|
|
|
—
|
|
Other impairments (recoveries), net(1)
|
—
|
|
|
—
|
|
|
2,738
|
|
|
0.01
|
|
Severance and related charges(2)
|
4,573
|
|
|
0.01
|
|
|
3,889
|
|
|
0.01
|
|
Loss on debt extinguishments(3)
|
43,899
|
|
|
0.09
|
|
|
54,227
|
|
|
0.11
|
|
Litigation costs (recoveries)
|
(545)
|
|
|
—
|
|
|
2,303
|
|
|
—
|
|
Casualty-related charges (recoveries), net
|
—
|
|
|
—
|
|
|
8,925
|
|
|
0.02
|
|
Foreign currency remeasurement losses (gains)
|
(41)
|
|
|
—
|
|
|
(141)
|
|
|
—
|
|
FFO as adjusted
|
$
|
208,196
|
|
|
$
|
0.44
|
|
|
$
|
227,769
|
|
|
$
|
0.48
|
|
FAD
|
$
|
186,545
|
|
|
|
|
$
|
202,407
|
|
|
|
_______________________________________
|
(1)
|
For the three months ended September 30, 2017, represents the impairment of
our Tandem Mezzanine Loan, which was sold in the first quarter of 2018.
|
(2)
|
For the three months ended September 30, 2018, relates to corporate
restructuring activities. For the three months ended September 30, 2017, primarily relates to the departure of our former
Chief Accounting Officer.
|
(3)
|
Represents the premium associated with the prepayment of senior unsecured
notes.
|
FFO, FFO as adjusted, FAD, and SPP Cash NOI are supplemental non-GAAP financial measures that we believe are useful in
evaluating the operating performance of real estate investment trusts. See "September 30,
2018 Discussion and Reconciliation of Non-GAAP Financial Measures" for definitions, discussions of their uses and inherent
limitations, and reconciliations to the most directly comparable financial measures calculated and presented in accordance with
GAAP on the Investor Relations section of our website at http://ir.hcpi.com/financial-reconciliation.
SAME PROPERTY PORTFOLIO OPERATING SUMMARY
The tables below outline the year-over-year three-month SPP Cash NOI growth and the components of our senior housing operating
portfolio ("SHOP") SPP Cash NOI growth for the third quarter:
Year-Over-Year Three-Month SPP Cash NOI Growth
|
|
Senior housing triple-net
|
1.6%
|
|
SHOP
|
(6.3%)
|
|
Life science
|
2.6%
|
|
Medical office
|
2.3%
|
|
Other non-reportable segments ("Other")
|
6.5%
|
|
Total Portfolio
|
1.7%
|
|
Components of SHOP SPP Cash NOI Growth
|
|
Core
Portfolio(1)
|
|
Transition/Sale
Portfolio(2)
|
|
Total
|
Property count
|
32
|
|
18
|
|
50
|
Current Quarter Cash NOI
|
$15,482
|
|
$6,330
|
|
$21,812
|
SPP Cash NOI Growth
|
4.1%
|
|
(24.8%)
|
|
(6.3%)
|
SPP Cash NOI Margin
|
33.1%
|
|
25.4%
|
|
30.4%
|
_______________________________________
|
(1)
|
Includes 16 properties managed by Brookdale and 16 properties managed by
four operators that are not expected to undergo a transition or sale during 2018.
|
(2)
|
Represents properties previously managed by Brookdale that have
transitioned or are expected to transition to new operators or sell in 2018.
|
SHORELINE TECHNOLOGY CENTER DISPOSITION
In October, we entered into a definitive agreement to sell our approximately 800,000 square foot Shoreline Technology Center
campus located in Mountain View, California for $1.0
billion. The disposition is expected to generate a gain on sale of approximately $700
million upon closing in the fourth quarter 2018.
"This transaction highlights our ability to unlock meaningful shareholder value and generate attractively-priced capital which
we will use to delever and further strengthen our balance sheet as well as fund future accretive growth," said Peter Scott, Executive Vice President and Chief Financial Officer of HCP.
We intend to use the proceeds from the disposition to initially repay approximately $1 billion
of debt at an average interest rate of approximately 3.5%. Over time, we will opportunistically redeploy a portion of this
capital into future acquisitions and to fund our development and redevelopment activity while maintaining a target net debt to
adjusted EBITDA ratio in the high five times range.
TRANSACTION UPDATES
HCP AND MORGAN STANLEY REAL ESTATE INVESTING MEDICAL OFFICE JOINT VENTURE
HCP and Morgan Stanley Real Estate Investing ("MSREI") closed on the previously announced $605
million 51%/49% joint venture (the "Venture") in a two million square foot medical office portfolio. To form
the Venture, MSREI contributed cash to fund the acquisition of a medical office portfolio in Greenville, South Carolina and HCP contributed nine wholly-owned medical office buildings primarily located
in Texas and Florida.
19-COMMUNITY PORTFOLIO SALE
In October, we closed on the first tranche of the previously announced 19-asset portfolio sale of Brookdale-managed senior housing communities to an investment fund managed by affiliates of Apollo Global
Management for $264 million. We expect to close on the sale of the remaining two assets in the portfolio to the same
buyer for $113 million during the fourth quarter.
ADDITIONAL SIGNIFICANT DISPOSITION TRANSACTIONS
As previously disclosed, in July, a tenant in our life science portfolio in South San
Francisco exercised its purchase option on four properties, generating proceeds of $269
million.
In August, we sold an £11 million U.K. development loan at par.
In addition to the 19-community portfolio sale referenced above, during the third quarter we sold 11 senior housing
communities, 10 of which were managed by Brookdale, to third parties for a total of $76 million.
OPERATOR TRANSITION UPDATE
We have completed the vast majority of our planned operator transitions with 35 HCP-owned senior housing communities
transitioning from Brookdale to other operators, including Atria Senior
Living, Sunrise Senior Living, Elmcroft by Eclipse Senior Living, Discovery Senior Living and Sonata Senior Living.
The remaining four transitions are expected to close in 2018.
ON-CAMPUS MEDICAL OFFICE DEVELOPMENT PROGRAM WITH HCA
In October, we created a program with HCA Healthcare ("HCA") to develop primarily on-campus medical office buildings.
HCA outpatient departments are expected to anchor roughly half of the square footage of each project, with the balance of demand
coming from third-party physicians and other ancillary medical services. We will continue working with HCA to find win-win
development opportunities and expect to announce additional projects in 2018 and 2019.
The program's first development is a 90,000 square foot medical office building on the campus of Grand Strand Medical Center
("Grand Strand") in Myrtle Beach, South Carolina with an estimated cost of $26 million. Grand Strand is operated by HCA and is the leading hospital in the market. Grand
Strand will anchor the development and occupy 42,000 square feet upon completion. We expect the development to generate a
7.2% yield upon stabilization.
DEVELOPMENT UPDATES
PHASE IV OF THE COVE 100% PRE-LEASED; 1 MILLION SQUARE FOOT CAMPUS NOW 100% LEASED
During the quarter, we signed a 164,000 square foot, full-building lease at the $107 million
Phase IV development of The Cove in South San Francisco. This lease, combined with the previously disclosed leases at Phase
III of the development, brings the combined $344 million, 488,000 square feet of in-process
development to 100% pre-leased. Upon Phase IV's completion in early 2020, The Cove will be a one million square foot, LEED
silver, fully-integrated, waterfront campus located at the entrance to South San
Francisco's life science cluster.
PHASE I OF THE SHORE AT SIERRA POINT 100% PRE-LEASED
During September and October, we signed leases totaling 222,000 square feet at The Shore at Sierra Point, a 23-acre waterfront
life science development offering state-of-the-art laboratory and office space along with premier amenities. The
$224 million first phase of the development is now 100% pre-leased. With the leasing success
to-date, and the continued strength of the South San Francisco life science market, we will look
to accelerate construction of the remaining two phases which encompass a combined 365,000 square feet of potential
development.
BALANCE SHEET
As previously disclosed, on July 16, 2018, we repaid $700 million
of our 5.375% senior notes due 2021 using capital recycling proceeds received during the third quarter. In connection with
the repayment, we incurred an extinguishment of debt charge of approximately $44
million in the third quarter.
At September 30, 2018, we had $1.4 billion of liquidity from a
combination of cash and availability under our $2.0 billion credit facility.
In connection with the pending Shoreline Technology Center disposition, on October 9, 2018, we
provided a redemption notice to holders of our $450 million 3.75% senior notes due in 2019, which
will be redeemed at par in November 2018.
DIVIDEND
On October 25, 2018, our Board declared a quarterly cash dividend of $0.37 per common share. The dividend will be paid on November 20, 2018 to
stockholders of record as of the close of business on November 5, 2018.
SUSTAINABILITY
For the sixth consecutive year, HCP has been named to the Dow Jones Sustainability Index North America for demonstrating
best-in-class sustainable business practices. Additionally, for the seventh consecutive year, HCP has received the Green
Star designation from GRESB for excellence in sustainability implementation and measurement as well as management and
policy. More information about HCP's sustainability efforts, including a link to our Sustainability Report, is available in
the Sustainability section which can be found on our website at www.hcpi.com/sustainable-growth.
2018 GUIDANCE
For full-year 2018, we expect net income per share to range between $2.23 and $2.29; FFO
per share to range between $1.65 and $1.69; and FFO as adjusted per share to range
between $1.79 and $1.83. In addition, we expect 2018 SPP Cash NOI to increase between
0.25% and 1.75%. These estimates do not reflect the potential impact from unannounced future transactions other than
capital recycling activities. For additional detail and information regarding these estimates, refer to the "Projected Full Year
2018 SPP Cash NOI Growth" table below, the 2018 Guidance section of our corresponding Supplemental Report and the Discussion and
Reconciliation of Non-GAAP Financial Measures, both available in the Investor Relations section of our website
at http://ir.hcpi.com.
|
|
Projected Full Year 2018
SPP Cash NOI Growth
|
|
|
Low
|
|
High
|
Senior housing triple-net
|
|
0.50%
|
|
1.50%
|
SHOP
|
|
(4.00%)
|
|
0.00%
|
Life science
|
|
0.25%
|
|
1.25%
|
Medical office
|
|
1.75%
|
|
2.75%
|
Other
|
|
0.50%
|
|
1.50%
|
Total Portfolio SPP Growth
|
|
0.25%
|
|
1.75%
|
COMPANY INFORMATION
HCP has scheduled a conference call and webcast for Wednesday, October 31, 2018, at
9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to present its performance and operating results for the quarter ended
September 30, 2018. The conference call is accessible by dialing (888) 317-6003 (U.S.) or (412) 317-6061
(International). The conference ID number is 5581677. You may also access the conference call via webcast in the
Investor Relations section of our website at http://ir.hcpi.com. Through
November 15, 2018, an archive of the webcast will be available on our website, and a telephonic
replay can be accessed by dialing (877) 344-7529 (U.S.) or (412) 317-0088 (International) and entering conference ID number
10124783. Our Supplemental Report for the current period is also available, with this earnings release, in the Investor
Relations section of our website.
ABOUT HCP
HCP, Inc. is a fully integrated real estate investment trust (REIT) that invests in real estate serving the healthcare
industry in the United States. HCP owns a large-scale portfolio primarily diversified
across life science, medical office and senior housing. Recognized as a global leader in sustainability, HCP has been a
publicly-traded company since 1985 and was the first healthcare REIT selected to the S&P 500 index. For more
information regarding HCP, visit www.hcpi.com.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not historical facts are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, among other things, statements regarding our and our officers' intent, belief
or expectation as identified by the use of words such as "may," "will," "project," "expect," "believe," "intend," "anticipate,"
"seek," "target," "forecast," "plan," "potential," "estimate," "could," "would," "should" and other comparable and derivative
terms or the negatives thereof. Examples of forward-looking statements include, among other things, (i) all statements
under the heading "2018 Guidance," including without limitation with respect to expected net income, FFO per share, FFO as
adjusted per share, SPP Cash NOI and other financial projections and assumptions, including those in the "Projected Full Year
2018 SPP Cash NOI Growth" table in this release, as well as comparable statements included in other sections of this release;
(ii) statements regarding the payment of a quarterly cash dividend; and (iii) statements regarding timing, outcomes and
other details relating to current, pending or contemplated acquisitions, dispositions, transitions, developments, redevelopments,
joint venture transactions, capital recycling and financing activities, and other transactions discussed in this release,
including without limitation those described under the headings "Shoreline Technology Center Disposition", "Transaction Updates",
"Operator Transition Update", "On-Campus Medical Office Development Program with HCA", "Development Updates" and "Balance
Sheet." Forward-looking statements reflect our current expectations and views about future events and are subject to risks
and uncertainties that could significantly affect our future financial condition and results of operations. While
forward-looking statements reflect our good faith belief and assumptions we believe to be reasonable based upon current
information, we can give no assurance that our expectations or forecasts will be attained. Further, we cannot guarantee the
accuracy of any such forward-looking statement contained in this release, and such forward-looking statements are subject to
known and unknown risks and uncertainties that are difficult to predict. These risks and uncertainties include, but are not
limited to: our reliance on a concentration of a small number of tenants and operators for a significant percentage of our
revenues; the financial condition of our existing and future tenants, operators and borrowers, including potential bankruptcies
and downturns in their businesses, and their legal and regulatory proceedings, which results in uncertainties regarding our
ability to continue to realize the full benefit of such tenants' and operators' leases and borrowers' loans; the ability of our
existing and future tenants, operators and borrowers to conduct their respective businesses in a manner sufficient to maintain or
increase their revenues and to generate sufficient income to make rent and loan payments to us and our ability to recover
investments made, if applicable, in their operations; competition for the acquisition and financing of suitable healthcare
properties as well as competition for tenants and operators, including with respect to new leases and mortgages and the renewal
or rollover of existing leases; our concentration in the healthcare property sector, particularly in senior housing, life
sciences and medical office buildings, which makes our profitability more vulnerable to a downturn in a specific sector than if
we were investing in multiple industries; our ability to identify replacement tenants and operators and the potential renovation
costs and regulatory approvals associated therewith; the risks associated with property development and redevelopment, including
costs above original estimates, project delays and lower occupancy rates and rents than expected; the risks associated with our
investments in joint ventures and unconsolidated entities, including our lack of sole decision making authority and our reliance
on our partners' financial condition and continued cooperation; our ability to achieve the benefits of acquisitions and other
investments, including those discussed above, within expected time frames or at all, or within expected cost projections; the
potential impact on us and our tenants, operators and borrowers from current and future litigation matters, including the
possibility of larger than expected litigation costs, adverse results and related developments; operational risks associated with
third party management contracts, including the additional regulation and liabilities of our RIDEA lease structures; the effect
on us and our tenants and operators of legislation, executive orders and other legal requirements, including compliance with the
Americans with Disabilities Act, fire, safety and health regulations, environmental laws, the Affordable Care Act, licensure,
certification and inspection requirements, and laws addressing entitlement programs and related services, including Medicare and
Medicaid, which may result in future reductions in reimbursements or fines for noncompliance; changes in federal, state or local
laws and regulations, including those affecting the healthcare industry that affect our costs of compliance or increase the
costs, or otherwise affect the operations, of our tenants and operators; our ability to foreclose on collateral securing our real
estate-related loans; volatility or uncertainty in the capital markets, the availability and cost of capital as impacted by
interest rates, changes in our credit ratings, and the value of our common stock, and other conditions that may adversely impact
our ability to fund our obligations or consummate transactions, or reduce the earnings from potential transactions; changes in
global, national and local economic or other conditions, including currency exchange rates; our ability to manage our
indebtedness level and changes in the terms of such indebtedness; competition for skilled management and other key personnel; the
potential impact of uninsured or underinsured losses; our reliance on information technology systems and the potential impact of
system failures, disruptions or breaches; the ability to maintain our qualification as a real estate investment trust; and other
risks and uncertainties described from time to time in our Securities and Exchange Commission filings. Except as required
by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of
the date on which they are made.
CONTACT
Andrew Johns
Vice President – Finance and Investor Relations
949-407-0400
HCP, Inc.
|
|
Consolidated Balance Sheets
|
|
In thousands, except share and per share data
|
|
(unaudited)
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
Assets
|
|
|
|
|
Real estate:
|
|
|
|
|
Buildings and improvements
|
$
|
10,956,474
|
|
|
$
|
11,239,732
|
|
|
Development costs and construction in progress
|
442,007
|
|
|
447,976
|
|
|
Land
|
1,663,069
|
|
|
1,785,865
|
|
|
Accumulated depreciation and amortization
|
(2,825,850)
|
|
|
(2,741,695)
|
|
|
Net real estate
|
10,235,700
|
|
|
10,731,878
|
|
|
Net investment in direct financing leases
|
714,709
|
|
|
714,352
|
|
|
Loans receivable, net
|
41,302
|
|
|
313,326
|
|
|
Investments in and advances to unconsolidated joint ventures
|
623,255
|
|
|
800,840
|
|
|
Accounts receivable, net of allowance of $4,552 and $4,425,
respectively
|
48,701
|
|
|
40,733
|
|
|
Cash and cash equivalents
|
78,864
|
|
|
55,306
|
|
|
Restricted cash
|
29,877
|
|
|
26,897
|
|
|
Intangible assets, net
|
305,805
|
|
|
410,082
|
|
|
Assets held for sale, net
|
423,063
|
|
|
417,014
|
|
|
Other assets, net
|
582,682
|
|
|
578,033
|
|
|
Total assets
|
$
|
13,083,958
|
|
|
$
|
14,088,461
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
Bank line of credit
|
$
|
636,709
|
|
|
$
|
1,017,076
|
|
|
Term loan
|
223,468
|
|
|
228,288
|
|
|
Senior unsecured notes
|
5,706,181
|
|
|
6,396,451
|
|
|
Mortgage debt
|
139,401
|
|
|
144,486
|
|
|
Other debt
|
92,494
|
|
|
94,165
|
|
|
Intangible liabilities, net
|
56,871
|
|
|
52,579
|
|
|
Liabilities of assets held for sale, net
|
3,146
|
|
|
14,031
|
|
|
Accounts payable and accrued liabilities
|
410,804
|
|
|
401,738
|
|
|
Deferred revenue
|
174,509
|
|
|
144,709
|
|
|
Total liabilities
|
7,443,583
|
|
|
8,493,523
|
|
|
Commitments and contingencies
|
|
|
|
|
Common stock, $1.00 par value: 750,000,000 shares authorized; 469,916,246
and 469,435,678 shares issued and outstanding, respectively
|
469,916
|
|
|
469,436
|
|
|
Additional paid-in capital
|
8,189,946
|
|
|
8,226,113
|
|
|
Cumulative dividends in excess of earnings
|
(3,584,397)
|
|
|
(3,370,520)
|
|
|
Accumulated other comprehensive income (loss)
|
(4,297)
|
|
|
(24,024)
|
|
|
Total stockholders' equity
|
5,071,168
|
|
|
5,301,005
|
|
|
Joint venture partners
|
392,319
|
|
|
117,045
|
|
|
Non-managing member unitholders
|
176,888
|
|
|
176,888
|
|
|
Total noncontrolling interests
|
569,207
|
|
|
293,933
|
|
|
Total equity
|
5,640,375
|
|
|
5,594,938
|
|
|
Total liabilities and equity
|
$
|
13,083,958
|
|
|
$
|
14,088,461
|
|
|
HCP, Inc.
|
|
Consolidated Statements of Operations
|
|
In thousands, except per share data
|
|
(unaudited)
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Rental and related revenues
|
$
|
262,828
|
|
|
$
|
266,109
|
|
|
$
|
821,462
|
|
|
$
|
816,147
|
|
|
Tenant recoveries
|
41,026
|
|
|
36,860
|
|
|
116,984
|
|
|
105,794
|
|
|
Resident fees and services
|
137,359
|
|
|
126,040
|
|
|
416,947
|
|
|
391,688
|
|
|
Income from direct financing leases
|
13,573
|
|
|
13,240
|
|
|
40,329
|
|
|
40,516
|
|
|
Interest income
|
1,236
|
|
|
11,774
|
|
|
9,048
|
|
|
50,974
|
|
|
Total revenues
|
456,022
|
|
|
454,023
|
|
|
1,404,770
|
|
|
1,405,119
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Interest expense
|
63,486
|
|
|
71,328
|
|
|
211,626
|
|
|
235,834
|
|
|
Depreciation and amortization
|
132,198
|
|
|
130,588
|
|
|
418,740
|
|
|
397,893
|
|
|
Operating
|
181,207
|
|
|
155,338
|
|
|
527,625
|
|
|
467,582
|
|
|
General and administrative
|
23,503
|
|
|
23,523
|
|
|
75,192
|
|
|
67,287
|
|
|
Transaction costs
|
4,489
|
|
|
580
|
|
|
9,088
|
|
|
2,504
|
|
|
Impairments (recoveries), net
|
5,268
|
|
|
25,328
|
|
|
19,180
|
|
|
82,010
|
|
|
Total costs and expenses
|
410,151
|
|
|
406,685
|
|
|
1,261,451
|
|
|
1,253,110
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Gain (loss) on sales of real estate, net
|
95,332
|
|
|
5,182
|
|
|
162,211
|
|
|
322,852
|
|
|
Loss on debt extinguishments
|
(43,899)
|
|
|
(54,227)
|
|
|
(43,899)
|
|
|
(54,227)
|
|
|
Other income (expense), net
|
1,604
|
|
|
(10,556)
|
|
|
(37,017)
|
|
|
40,723
|
|
|
Total other income (expense), net
|
53,037
|
|
|
(59,601)
|
|
|
81,295
|
|
|
309,348
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity income (loss) from
unconsolidated joint ventures
|
98,908
|
|
|
(12,263)
|
|
|
224,614
|
|
|
461,357
|
|
|
Income tax benefit (expense)
|
4,929
|
|
|
5,481
|
|
|
14,919
|
|
|
14,630
|
|
|
Equity income (loss) from unconsolidated joint ventures
|
(911)
|
|
|
1,062
|
|
|
(442)
|
|
|
4,571
|
|
|
Net income (loss)
|
102,926
|
|
|
(5,720)
|
|
|
239,091
|
|
|
480,558
|
|
|
Noncontrolling interests' share in earnings
|
(3,555)
|
|
|
(1,937)
|
|
|
(9,546)
|
|
|
(7,687)
|
|
|
Net income (loss) attributable to HCP, Inc.
|
99,371
|
|
|
(7,657)
|
|
|
229,545
|
|
|
472,871
|
|
|
Participating securities' share in earnings
|
(425)
|
|
|
(131)
|
|
|
(1,278)
|
|
|
(560)
|
|
|
Net income (loss) applicable to common shares
|
$
|
98,946
|
|
|
$
|
(7,788)
|
|
|
$
|
228,267
|
|
|
$
|
472,311
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.21
|
|
|
$
|
(0.02)
|
|
|
$
|
0.49
|
|
|
$
|
1.01
|
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.02)
|
|
|
$
|
0.49
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
469,867
|
|
|
468,975
|
|
|
469,732
|
|
|
468,642
|
|
|
Diluted
|
470,118
|
|
|
468,975
|
|
|
469,876
|
|
|
468,828
|
|
|
HCP, Inc.
|
|
Funds From Operations
|
|
In thousands, except per share data
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Net income (loss) applicable to common shares
|
|
$
|
98,946
|
|
|
$
|
(7,788)
|
|
|
$
|
228,267
|
|
|
$
|
472,311
|
|
|
Real estate related depreciation and amortization
|
|
132,198
|
|
|
130,588
|
|
|
418,740
|
|
|
397,893
|
|
|
Real estate related depreciation and amortization on unconsolidated joint
ventures
|
|
15,180
|
|
|
16,358
|
|
|
48,730
|
|
|
47,711
|
|
|
Real estate related depreciation and amortization on noncontrolling
interests and other
|
|
(2,971)
|
|
|
(3,678)
|
|
|
(7,136)
|
|
|
(11,711)
|
|
|
Other depreciation and amortization
|
|
2,343
|
|
|
2,360
|
|
|
4,906
|
|
|
7,718
|
|
|
Loss (gain) on sales of real estate, net
|
|
(95,332)
|
|
|
(5,182)
|
|
|
(162,211)
|
|
|
(322,852)
|
|
|
Loss (gain) upon consolidation of real estate, net(1)
|
|
—
|
|
|
—
|
|
|
41,017
|
|
|
—
|
|
|
Taxes associated with real estate dispositions(2)
|
|
—
|
|
|
—
|
|
|
1,147
|
|
|
(5,498)
|
|
|
Impairments (recoveries) of depreciable real estate, net
|
|
5,268
|
|
|
22,590
|
|
|
11,541
|
|
|
22,590
|
|
|
FFO applicable to common shares
|
|
155,632
|
|
|
155,248
|
|
|
585,001
|
|
|
608,162
|
|
|
Distributions on dilutive convertible units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,250
|
|
|
Diluted FFO applicable to common shares
|
|
$
|
155,632
|
|
|
$
|
155,248
|
|
|
$
|
585,001
|
|
|
$
|
613,412
|
|
|
Diluted FFO per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
1.25
|
|
|
$
|
1.30
|
|
|
Weighted average shares outstanding - diluted FFO
|
|
470,118
|
|
|
469,156
|
|
|
469,876
|
|
|
473,519
|
|
|
Impact of adjustments to FFO:
|
|
|
|
|
|
|
|
|
|
Transaction-related items
|
|
$
|
4,678
|
|
|
$
|
580
|
|
|
$
|
8,612
|
|
|
$
|
2,476
|
|
|
Other impairments (recoveries), net(3)
|
|
—
|
|
|
2,738
|
|
|
4,341
|
|
|
8,526
|
|
|
Severance and related charges(4)
|
|
4,573
|
|
|
3,889
|
|
|
13,311
|
|
|
3,889
|
|
|
Loss on debt extinguishments(5)
|
|
43,899
|
|
|
54,227
|
|
|
43,899
|
|
|
54,227
|
|
|
Litigation costs (recoveries)
|
|
(545)
|
|
|
2,303
|
|
|
41
|
|
|
7,507
|
|
|
Casualty-related charges (recoveries), net
|
|
—
|
|
|
8,925
|
|
|
—
|
|
|
8,925
|
|
|
Foreign currency remeasurement losses (gains)
|
|
(41)
|
|
|
(141)
|
|
|
(106)
|
|
|
(986)
|
|
|
Total adjustments
|
|
52,564
|
|
|
72,521
|
|
|
70,098
|
|
|
84,564
|
|
|
FFO as adjusted applicable to common shares
|
|
208,196
|
|
|
227,769
|
|
|
655,099
|
|
|
692,726
|
|
|
Distributions on dilutive convertible units and other
|
|
(90)
|
|
|
1,493
|
|
|
(180)
|
|
|
5,095
|
|
|
Diluted FFO as adjusted applicable to common shares
|
|
$
|
208,106
|
|
|
$
|
229,262
|
|
|
$
|
654,919
|
|
|
$
|
697,821
|
|
|
Diluted FFO as adjusted per common share
|
|
$
|
0.44
|
|
|
$
|
0.48
|
|
|
$
|
1.39
|
|
|
$
|
1.47
|
|
|
Weighted average shares outstanding - diluted FFO as adjusted
|
|
470,118
|
|
|
473,836
|
|
|
469,876
|
|
|
473,519
|
|
|
_______________________________________
|
(1)
|
For the nine months ended September 30, 2018, represents the loss on
consolidation of seven U.K. care homes.
|
(2)
|
Represents the income tax impact of our RIDEA II transactions in June 2018
and January 2017.
|
(3)
|
For the nine months ended September 30, 2018, represents the impairment of
an undeveloped life science land parcel classified as held for sale, partially offset by an impairment recovery upon the
sale of our Tandem Mezzanine Loan in March 2018. For the nine months ended September 30, 2017, represents the impairment
of our Tandem Mezzanine Loan, net of the impairment recovery upon the sale of our Four Seasons Notes in the first quarter
of 2017. For the three months ended September 30, 2017, represents the impairment of our Tandem Mezzanine Loan, which was
sold in the first quarter of 2018.
|
(4)
|
For the three months ended September 30, 2018, relates to corporate
restructuring activities. For the nine months ended September 30, 2018, primarily relates to the departure of our former
Executive Chairman, which consisted of $6 million of cash severance and $3 million of equity award vestings. For the
three and nine months ended September 30, 2017, primarily relates to the departure of our former Chief Accounting
Officer.
|
(5)
|
Represents the premium associated with the prepayment of senior unsecured
notes.
|
HCP, Inc.
|
|
Funds Available for Distribution
|
|
In thousands
|
|
(unaudited)
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
FFO as adjusted applicable to common shares
|
$
|
208,196
|
|
|
$
|
227,769
|
|
|
$
|
655,099
|
|
|
$
|
692,726
|
|
|
Amortization of deferred compensation(1)
|
3,530
|
|
|
3,237
|
|
|
11,249
|
|
|
10,329
|
|
|
Amortization of deferred financing costs
|
3,070
|
|
|
3,439
|
|
|
9,760
|
|
|
11,141
|
|
|
Straight-line rents
|
(4,409)
|
|
|
(5,774)
|
|
|
(20,888)
|
|
|
(18,052)
|
|
|
FAD capital expenditures
|
(24,646)
|
|
|
(26,272)
|
|
|
(70,237)
|
|
|
(73,825)
|
|
|
Lease restructure payments
|
300
|
|
|
311
|
|
|
901
|
|
|
1,165
|
|
|
CCRC entrance fees(2)
|
6,524
|
|
|
6,074
|
|
|
13,203
|
|
|
14,436
|
|
|
Deferred income taxes(3)
|
(4,880)
|
|
|
(3,807)
|
|
|
(12,751)
|
|
|
(10,523)
|
|
|
Other FAD adjustments(4)
|
(1,140)
|
|
|
(2,570)
|
|
|
(7,959)
|
|
|
(6,288)
|
|
|
FAD applicable to common shares
|
186,545
|
|
|
202,407
|
|
|
578,377
|
|
|
621,109
|
|
|
Distributions on dilutive convertible units
|
—
|
|
|
1,596
|
|
|
—
|
|
|
5,250
|
|
|
Diluted FAD applicable to common shares
|
$
|
186,545
|
|
|
$
|
204,003
|
|
|
$
|
578,377
|
|
|
$
|
626,359
|
|
|
Weighted average shares outstanding - diluted FAD
|
470,118
|
|
|
473,836
|
|
|
469,876
|
|
|
473,519
|
|
|
_______________________________________
|
(1)
|
Excludes amounts in severance and related charges related to the
acceleration of deferred compensation for restricted stock units that vested upon the departure of certain former
employees.
|
(2)
|
Represents our 49% share of non-refundable entrance fees, as the fees are
collected by our CCRC JV, net of reserves and CCRC JV entrance fee amortization.
|
(3)
|
For the three and nine months ended September 30, 2017, excludes $2 million
of deferred tax benefit from casualty-related charges, which is included in casualty-related charges (recoveries),
net.
|
(4)
|
Primarily includes our share of FAD capital expenditures from
unconsolidated joint ventures, partially offset by noncontrolling interests' share of FAD capital expenditures from
consolidated joint ventures.
|
View original content to download multimedia:http://www.prnewswire.com/news-releases/hcp-reports-third-quarter-2018-results-300740991.html
SOURCE HCP, Inc.