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Published: 2020-11-02 16:21:47 ET
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EX-99.3 4 ex99309302020.htm EX-99.3 Document


Exhibit 99.3
 
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Discussion and

Reconciliation of Non-

GAAP Financial Measures
 
September 30, 2020
 
 
 
 
 
(Unaudited)


Definitions
Adjusted Fixed Charge Coverage  Adjusted EBITDAre divided by Fixed Charges. Adjusted Fixed Charge Coverage is a supplemental measure of liquidity and our ability to meet interest payments on our outstanding debt and pay dividends to our preferred stockholders, if applicable. Our various debt agreements contain covenants that require us to maintain ratios similar to Adjusted Fixed Charge Coverage and credit rating agencies utilize similar ratios in evaluating and determining the credit rating on certain of our debt instruments. Adjusted Fixed Charge Coverage is subject to the same limitations and qualifications as Adjusted EBITDAre and Fixed Charges.
Adjusted Funds Available for Distribution (“AFFO”) AFFO is defined as FFO as Adjusted after excluding the impact of the following: (i) amortization of deferred compensation expense, (ii) amortization of deferred financing costs, net, (iii) straight-line rents, (iv) deferred income taxes, (v) amortization of acquired market lease intangibles, net, (vi) non-cash interest related to DFLs and lease incentive amortization (reduction of straight-line rents), (vii) actuarial reserves for insurance claims that have been incurred but not reported, and (viii) deferred revenues, excluding amounts amortized into rental income that are associated with tenant funded improvements owned/recognized by us and up-front cash payments made by tenants to reduce their contractual rents. Also, AFFO: (i) is computed after deducting recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements and (ii) includes lease restructure payments and adjustments to compute our share of AFFO from our unconsolidated joint ventures. Certain prior period amounts in the “Non-GAAP Financial Measures Reconciliation” below for AFFO have been reclassified to conform to the current period presentation. More specifically, recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements ("AFFO capital expenditures") excludes our share from unconsolidated joint ventures (reported in “other AFFO adjustments”). Adjustments for joint ventures are calculated to reflect our pro-rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of AFFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated joint ventures in which we do not own 100% of the equity by adjusting our AFFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods (reported in “other AFFO adjustments”). See FFO for further disclosure regarding our use of pro-rata share information and its limitations. Other REITs or real estate companies may use different methodologies for calculating AFFO, and accordingly, our AFFO may not be comparable to those reported by other REITs. Although our AFFO computation may not be comparable to that of other REITs, management believes AFFO provides a meaningful supplemental measure of our performance and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. We believe AFFO is an alternative run-rate earnings measure that improves the understanding of our operating results among investors and makes comparisons with: (i) expected results, (ii) results of previous periods, and (iii) results among REITs more meaningful. AFFO does not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as it excludes the following items which generally flow through our cash flows from operating activities: (i) adjustments for changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, (ii) transaction-related costs, (iii) litigation settlement expenses, (iv) severance-related expenses, and (v) actual cash receipts from interest income recognized on loans receivable (in contrast to our AFFO adjustment to exclude non-cash interest and depreciation related to our investments in direct financing leases). Furthermore, AFFO is adjusted for recurring capital expenditures, which are generally not considered when determining cash flows from operations or liquidity. AFFO is a non-GAAP supplemental financial measure and should not be considered as an alternative to net income (loss) determined in accordance with GAAP.
Consolidated Debt The carrying amount of bank line of credit, commercial paper, term loans, senior unsecured notes, and mortgage debt, as reported in our consolidated financial statements.
Consolidated Gross Assets The carrying amount of total assets, excluding investments in and advances to our unconsolidated JVs, after adding back accumulated depreciation and amortization, as reported in our consolidated financial statements. Consolidated Gross Assets is a supplemental measure of our financial position, which, when used in conjunction with debt-related measures, enables both management and investors to analyze our leverage and to compare our leverage to that of other companies.
Consolidated Secured Debt Mortgage and other debt secured by real estate, as reported in our consolidated financial statements.
Continuing Care Retirement Community (“CCRC”) A senior housing facility which provides at least three levels of care (i.e., independent living, assisted living and skilled nursing).
Debt Investments Loans secured by a direct interest in real estate and mezzanine loans.
Direct Financing Lease ("DFL") Lease for which future minimum lease payments are recorded as a receivable and the difference between the future minimum lease payments and the estimated residual values less the cost of the properties is recorded as unearned income. Unearned income is deferred and amortized to income over the lease terms to provide a constant yield.
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Definitions
EBITDAre and Adjusted EBITDAre EBITDAre, or EBITDA for Real Estate, is a supplemental performance measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and intended for real estate companies. It represents earnings before interest expense, income taxes, depreciation and amortization, gains or losses from sales of depreciable property (including gains or losses on change in control), and impairment charges (recoveries) related to depreciable property. Adjusted EBITDAre is defined as EBITDAre excluding impairments (recoveries) related to non-depreciable assets, transaction-related items, prepayment costs (benefits) associated with early retirement or payment of debt, severance and related charges, litigation costs (recoveries), casualty-related charges (recoveries), stock compensation expense, and foreign currency remeasurement losses (gains). EBITDAre and Adjusted EBITDAre include our pro rata share of our unconsolidated JVs presented on the same basis. We consider EBITDAre and Adjusted EBITDAre important supplemental measures to net income (loss) because they provide an additional manner in which to evaluate our operating performance and serve as additional indicators of our ability service our debt obligations. Net income (loss) is the most directly comparable U.S. generally accepted accounting principles (“GAAP”) measure to EBITDAre and Adjusted EBITDAre.
Enterprise Debt Consolidated Debt plus our pro rata share of total debt from our unconsolidated JVs. Enterprise Debt is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share of total debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Enterprise Gross Assets Consolidated Gross Assets plus our pro rata share of total gross assets from our unconsolidated JVs, after adding back accumulated depreciation and amortization. Enterprise Gross Assets is a supplemental measure of our financial position, which, when used in conjunction with debt-related measures, enables both management and investors to analyze our leverage and to compare our leverage to that of other companies.
Enterprise Secured Debt Consolidated Secured Debt plus our pro rata share of mortgage debt from our unconsolidated JVs. Enterprise Secured Debt is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share of Enterprise Secured Debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Entrance Fee Certain of our communities have residency agreements which require the resident to pay an upfront entrance fee prior to taking occupancy at the community. For net income, NOI, Adjusted NOI, NAREIT FFO, FFO as Adjusted, and AFFO, the non-refundable portion of the entrance fee is recorded as deferred entrance fee revenue and amortized over the estimated stay of the resident based on an actuarial valuation. The refundable portion of a resident’s entrance fee is generally refundable within a certain number of months or days following contract termination or upon the sale of the unit. All refundable amounts due to residents at any time in the future are classified as liabilities.
Financial Leverage Enterprise Debt divided by Enterprise Gross Assets. Financial Leverage is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share information is calculated by applying our actual ownership percentage for the period and excludes debt funded by us to our JVs. Our pro rata share of total debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Fixed Charges Total interest expense plus capitalized interest plus preferred stock dividends (if applicable). Fixed Charges also includes our pro rata share of the interest expense plus capitalized interest plus preferred stock dividends (if applicable) of our unconsolidated JVs. Fixed Charges is a supplemental measure of our interest payments on outstanding debt and dividends to preferred stockholders for purposes of presenting Fixed Charge Coverage and Adjusted Fixed Charge Coverage. Fixed Charges is subject to limitations and qualifications, as, among other things, it does not include all contractual obligations.
Funds From Operations (“NAREIT FFO”) and FFO as Adjusted FFO encompasses NAREIT FFO and FFO as Adjusted, each of which is described in detail below. We believe FFO applicable to common shares, diluted FFO applicable to common shares, and diluted FFO per common share are important supplemental non-GAAP measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets utilizes straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the REIT industry to address this issue.
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Definitions
NAREIT FFO. FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is net income (loss) applicable to common shares (computed in accordance with GAAP), excluding gains or losses from sales of depreciable property, including any current and deferred taxes directly associated with sales of depreciable property, impairments of, or related to, depreciable real estate, plus real estate and other real estate-related depreciation and amortization, and adjustments to compute our share of NAREIT FFO and FFO as Adjusted (see below) from joint ventures. Adjustments for joint ventures are calculated to reflect our pro-rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of NAREIT FFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. For consolidated joint ventures in which we do not own 100%, we reflect our share of the equity by adjusting our NAREIT FFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods. Our pro-rata share information is prepared on a basis consistent with the comparable consolidated amounts, is intended to reflect our proportionate economic interest in the operating results of properties in our portfolio and is calculated by applying our actual ownership percentage for the period. We do not control the unconsolidated joint ventures, and the pro-rata presentations of reconciling items included in NAREIT FFO do not represent our legal claim to such items. The joint venture members or partners are entitled to profit or loss allocations and distributions of cash flows according to the joint venture agreements, which provide for such allocations generally according to their invested capital.
The presentation of pro-rata information has limitations, which include, but are not limited to, the following: (i) the amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses and (ii) other companies in our industry may calculate their pro-rata interest differently, limiting the usefulness as a comparative measure. Because of these limitations, the pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the pro-rata financial information as a supplement.
NAREIT FFO does not represent cash generated from operating activities in accordance with GAAP, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income (loss). We compute NAREIT FFO in accordance with the current NAREIT definition; however, other REITs may report NAREIT FFO differently or have a different interpretation of the current NAREIT definition from ours.
FFO as Adjusted. In addition, we present NAREIT FFO on an adjusted basis before the impact of non-comparable items including, but not limited to, transaction-related items, impairments (recoveries) of non-depreciable assets, losses (gains) from the sale of non-depreciable assets, severance and related charges, prepayment costs (benefits) associated with early retirement or payment of debt, litigation costs (recoveries), casualty-related charges (recoveries), foreign currency remeasurement losses (gains), deferred tax asset valuation allowances, and changes in tax legislation (“FFO as Adjusted”). Transaction-related items include transaction expenses and gains/charges incurred as a result of mergers and acquisitions and lease amendment or termination activities. Prepayment costs (benefits) associated with early retirement of debt include the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of debt. Management believes that FFO as Adjusted provides a meaningful supplemental measurement of our FFO run-rate and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. At the same time that NAREIT created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors, and financial analysts who review our operating performance are best served by an FFO run-rate earnings measure that includes certain other adjustments to net income (loss), in addition to adjustments made to arrive at the NAREIT defined measure of FFO. FFO as Adjusted is used by management in analyzing our business and the performance of our properties and we believe it is important that stockholders, potential investors, and financial analysts understand this measure used by management. We use FFO as Adjusted to: (i) evaluate our performance in comparison with expected results and results of previous periods, relative to resource allocation decisions, (ii) evaluate the performance of our management, (iii) budget and forecast future results to assist in the allocation of resources, (iv) assess our performance as compared with similar real estate companies and the industry in general, and (v) evaluate how a specific potential investment will impact our future results. Other REITs or real estate companies may use different methodologies for calculating an adjusted FFO measure, and accordingly, our FFO as Adjusted may not be comparable to those reported by other REITs.
Investment and Portfolio Investment Represents: (i) the carrying amount of real estate assets and intangibles, after adding back accumulated depreciation and amortization and (ii) the carrying amount of DFLs and Debt Investments. Portfolio Investment also includes our pro rata share of the real estate assets and intangibles held in our unconsolidated JVs, presented on the same basis as Investment, and excludes noncontrolling interests' pro rata share of the real estate assets and intangibles held in our consolidated JVs, presented on the same basis. Investment and Portfolio Investment exclude land held for development.
Net Debt Enterprise Debt less the carrying amount of cash and cash equivalents as reported in our consolidated financial statements and our pro rata share of cash and cash equivalents from our unconsolidated JVs. Consolidated Debt is the most directly comparable GAAP measure to Net Debt. Net Debt is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies.
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Definitions
Net Debt to Adjusted EBITDAre Net Debt divided by Adjusted EBITDAre is a supplemental measure of our ability to decrease our debt. Because we may not be able to use our cash to reduce our debt on a dollar-for-dollar basis, this measure may have material limitations.
Net Operating Income from Continuing Operations (“NOI”) and Cash (Adjusted) NOI NOI and Adjusted NOI are non-U.S. generally accepted accounting principles (“GAAP”) supplemental financial measures used to evaluate the operating performance of real estate. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, income from direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses (which exclude transition costs); NOI excludes all other financial statement amounts included in net income (loss). Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense. NOI and Adjusted NOI include our share of income (loss) generated by unconsolidated joint ventures and exclude noncontrolling interests’ share of income (loss) generated by consolidated joint ventures. Adjusted NOI is oftentimes referred to as “Cash NOI.” Management believes NOI and Adjusted NOI are important supplemental measures because they provide relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and present them on an unlevered basis. We use NOI and Adjusted NOI to make decisions about resource allocations, to assess and compare property level performance, and to evaluate our Same-Store (“SS”) performance, as described below. We believe that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as alternative measures of operating performance to net income (loss) as defined by GAAP since they do not reflect various excluded items. Further, our definitions of NOI and Adjusted NOI may not be comparable to the definitions used by other REITs or real estate companies, as they may use different methodologies for calculating NOI and Adjusted NOI.
Operating expenses generally relate to leased medical office and life science properties, as well as SHOP and CCRC facilities. We generally recover all or a portion of our leased medical office and life science property expenses through tenant recoveries. We present expenses as operating or general and administrative based on the underlying nature of the expense.
Portfolio Cash Operating Expenses Consolidated cash operating expenses plus the Company's pro rata share of cash operating expenses from its unconsolidated JVs less noncontrolling interests' pro rata share of cash operating expenses from consolidated JVs. Portfolio Cash Operating Expenses represent property level operating expenses (which exclude transition costs) after eliminating the effects of straight-line rents, lease termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee expense.
Portfolio Income Cash NOI plus interest income plus our pro rata share of Cash NOI from our unconsolidated JVs less noncontrolling interests' pro rata share of Cash NOI from consolidated JVs.
Portfolio Real Estate Revenues and Portfolio Cash Real Estate Revenues Portfolio Real Estate Revenues include rental related revenues, resident fees and services, income from DFLs, and government grant income which is included in Other income (expense), net in our Consolidated Statement of Operations. Portfolio Real Estate Revenues include the Company's pro rata share from unconsolidated JVs presented on the same basis and exclude noncontrolling interests' pro rata share from consolidated JVs presented on the same basis. Portfolio Cash Real Estate Revenues include Portfolio Real Estate Revenues after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, lease termination fees, and the impact of deferred community fee income.
Revenue Per Occupied Room ("REVPOR") CCRC The 3-month average Cash Real Estate Revenues per occupied unit excluding Cash NREFs for the most recent period available. REVPOR CCRC excludes newly completed assets under lease-up, assets sold, acquired or converted to a new operating structure (such as triple-net to SHOP) during the relevant period, assets in redevelopment, assets that are held for sale, and assets that experienced a casualty event that significantly impacted operations. REVPOR cannot be derived from the information presented for the CCRC portfolio as units reflect 100% of the unit capacities for unconsolidated JVs and revenue is at the Company's pro rata share. REVPOR CCRC is a non-GAAP supplemental financial measure used to evaluate the revenue-generating capacity and profit potential of our CCRC assets independent of fluctuating occupancy rates. It is also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our CCRC assets.
REVPOR SHOP The 3-month average Cash Real Estate Revenues per occupied unit for the most recent period available. REVPOR SHOP excludes newly completed assets under lease-up, assets sold, acquired or converted to a new operating structure (such as triple-net to SHOP) during the relevant period, assets in redevelopment, assets that are held for sale, and assets that experienced a casualty event that significantly impacted operations. REVPOR cannot be derived from the information presented for the SHOP portfolio as units reflect 100% of the unit capacities for unconsolidated JVs and revenue is at the Company's pro rata share. REVPOR SHOP is a non-GAAP supplemental financial measure used to evaluate the revenue-generating capacity and profit potential of our SHOP assets independent of fluctuating occupancy rates. It is also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our SHOP assets.
RIDEA A structure whereby a taxable REIT subsidiary is permitted to rent a healthcare facility from its parent REIT and hire an independent contractor to operate the facility.
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Definitions
Same-Store ("SS") Same-Store NOI and Adjusted (Cash) NOI information allows us to evaluate the performance of our property portfolio under a consistent population by eliminating changes in the composition of our consolidated portfolio of properties. Same-Store Adjusted NOI excludes amortization of deferred revenue from tenant-funded improvements and certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis.
Properties are included in Same-Store once they are stabilized for the full period in both comparison periods. Newly acquired operating assets are generally considered stabilized at the earlier of lease-up (typically when the tenant(s) control(s) the physical use of at least 80% of the space) or 12 months from the acquisition date. Newly completed developments and redevelopments are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service. Properties that experience a change in reporting structure, such as a conversion from a triple-net lease to a RIDEA reporting structure, are considered stabilized after 12 months in operations under a consistent reporting structure. A property is removed from Same-Store when it is classified as held for sale, sold, placed into redevelopment, experiences a casualty event that significantly impacts operations, a change in reporting structure (such as triple-net to SHOP) or operator transition has been agreed to, or a significant tenant relocates from a Same-Store property to a non Same-Store property and that change results in a corresponding increase in revenue.
Secured Debt Ratio Enterprise Secured Debt divided by Enterprise Gross Assets. Secured Debt Ratio is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share information is calculated by applying our actual ownership percentage for the period and excludes debt funded by us to our JVs. Our pro rata share of Total Secured Debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Segments Our portfolio is comprised of investments in the following healthcare segments: (i) senior housing triple-net, (ii) senior housing operating portfolio (“SHOP”), (iii) CCRC, (iv) life science, (v) medical office, and (vi) other non-reportable segments (“Other”).
Share of Consolidated Joint Ventures ("JVs") Noncontrolling interests' pro rata share information is prepared by applying noncontrolling interests' actual ownership percentage for the period and is intended to reflect noncontrolling interests' proportionate economic interest in the financial position and operating results of properties in our portfolio.
Share of Unconsolidated Joint Ventures Our pro rata share information is prepared by applying our actual ownership percentage for the period and is intended to reflect our proportionate economic interest in the financial position and operating results of properties in our portfolio.

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Reconciliations
In thousands

Funds From Operations
Three Months Ended September 30,Nine Months Ended
September 30,
 2020201920202019
Net income (loss) applicable to common shares $(63,768)$(46,249)$265,018 $787 
Real estate related depreciation and amortization173,630 171,944 541,394 469,191 
Healthpeak's share of real estate related depreciation and amortization from unconsolidated joint ventures 24,822 14,952 80,050 45,153 
Noncontrolling interests' share of real estate related depreciation and amortization(5,020)(4,999)(15,043)(14,927)
Other real estate-related depreciation and amortization319 1,357 2,447 4,798 
Loss (gain) on sales of depreciable real estate, net(149)784 (247,881)(18,708)
Healthpeak's share of loss (gain) on sales of real estate, net, from unconsolidated joint ventures — — (9,248)— 
Noncontrolling interests' share of gain (loss) on sales of real estate, net— (2)(3)206 
Loss (gain) upon change of control, net(1)
(3,259)20 (173,222)(11,481)
Taxes associated with real estate dispositions551 — (10,989)— 
Impairments (recoveries) of depreciable real estate, net(2)
37,477 43,784 85,996 111,033 
NAREIT FFO applicable to common shares164,603 181,591 518,519 586,052 
Distributions on dilutive convertible units and other— 1,675 5,380 4,954 
Diluted NAREIT FFO applicable to common shares$164,603 $183,266 $523,899 $591,006 
Weighted average shares outstanding - diluted NAREIT FFO538,645 499,450 533,963 489,609 
Impact of adjustments to NAREIT FFO:
Transaction-related items(3)
$2,276 $1,335 $95,342 $13,659 
Other impairments (recoveries) and other losses (gains), net(4)
(2,927)— (29,943)10,147 
Severance and related charges— 1,334 — 5,063 
Loss on debt extinguishments17,921 35,017 42,912 36,152 
Litigation costs (recoveries)26 (150)232 (549)
Casualty-related charges (recoveries), net469 1,607 469 (4,636)
Foreign currency remeasurement losses (gains)— (162)153 (350)
Valuation allowance on deferred tax assets(5)
31,161 — 31,161 — 
Tax rate legislation impact(6)
— — (3,590)— 
Total adjustments48,926 38,981 136,736 59,486 
FFO as Adjusted applicable to common shares213,529 220,572 655,255 645,538 
Distributions on dilutive convertible units and other1,852 1,588 5,244 4,809 
Diluted FFO as Adjusted applicable to common shares$215,381 $222,160 $660,499 $650,347 
Weighted average shares outstanding - diluted FFO as Adjusted544,146 499,450 533,963 489,609 
Diluted earnings per common share$(0.12)$(0.09)$0.50 $0.00 
Depreciation and amortization0.37 0.37 1.14 1.03 
Loss (gain) on sales of depreciable real estate, net— — (0.48)(0.03)
Loss (gain) upon change of control, net(1)
(0.01)— (0.32)(0.02)
Taxes associated with real estate dispositions— — (0.02)— 
Impairments (recoveries) of depreciable real estate, net(2)
0.07 0.09 0.16 0.23 
Diluted NAREIT FFO per common share$0.31 $0.37 $0.98 $1.21 
Transaction-related items(3)
0.01 — 0.18 0.03 
Other impairments (recoveries) and other losses (gains), net(4)
(0.01)— (0.06)0.02 
Severance and related charges— — — 0.01 
Loss on debt extinguishments0.03 0.07 0.09 0.07 
Casualty-related charges (recoveries), net— — — (0.01)
Valuation allowance on deferred tax assets(5)
0.06 — 0.06 — 
Tax rate legislation impact(6)
— — (0.01)— 
Diluted FFO as Adjusted per common share$0.40 $0.44 $1.24 $1.33 
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Reconciliations
In thousands

Adjusted Funds From Operations
Three Months Ended September 30,Nine Months Ended
September 30,
 2020201920202019
FFO as Adjusted applicable to common shares$213,529 $220,572 $655,255 $645,538 
Amortization of deferred compensation4,420 3,715 13,392 11,613 
Amortization of deferred financing costs2,554 2,735 7,670 8,174 
Straight-line rents(9,542)(10,252)(24,086)(22,192)
AFFO capital expenditures(20,756)(24,107)(61,329)(62,840)
Lease restructure payments347 289 966 870 
CCRC entrance fees(7)
— 5,731 — 14,071 
Deferred income taxes(7,300)(6,434)(9,200)(14,063)
Other AFFO adjustments(8)
539 (2,002)675 (4,387)
AFFO applicable to common shares183,791 190,247 583,343 576,784 
Distributions on dilutive convertible units and other— 1,675 5,380 4,953 
Diluted AFFO applicable to common shares$183,791 $191,922 $588,723 $581,737 
Weighted average shares outstanding - diluted AFFO538,645 499,450 533,963 489,609 
______________________________________
(1)For the nine months ended September 30, 2020, relates to the gain on consolidation of 13 continuing care retirement communities ("CCRCs") in which we acquired Brookdale's interest and began consolidating during the first quarter of 2020. For the nine months ended September 30, 2019, represents the gain related to the acquisition of the outstanding equity interests in a previously unconsolidated senior housing joint venture. Gains upon change of control are included in other income (expense), net in the consolidated statements of operations.
(2)For the three and nine months ended September 30, 2019, includes a $6 million impairment charge related to depreciable real estate held by the CCRC JV, which is recognized in equity income (loss) from unconsolidated joint ventures in the consolidated statement of operations.
(3)For the nine months ended September 30, 2020, includes the termination fee and transition fee expenses related to terminating the management agreements with Brookdale for 13 CCRCs and transitioning those communities to LCS, partially offset by the tax benefit recognized related to those expenses. The expense related to terminating the CCRC management agreements with Brookdale is included in operating expenses in the consolidated statement of operations for the nine months ended September 30, 2020.
(4)For the three and nine months ended September 30, 2020, includes reserves for loan losses under the current expected credit losses accounting standard in accordance with Accounting Standards Codification 326, Financial Instruments – Credit Losses ("ASC 326"). The nine months ended September 30, 2020 also includes a gain on sale of a hospital that was in a direct financing lease ("DFL"), and the impairment of an undeveloped MOB land parcel, which was sold during the third quarter. For the nine months ended September 30, 2019, represents the impairment of 13 senior housing triple-net facilities under DFLs recognized as a result of entering into sales agreements.
(5)For the three and nine months ended September 30, 2020, represents the valuation allowance and corresponding income tax expense related to deferred tax assets that are no longer expected to be realized as a result of our plan to dispose of a significant portion of our SHOP portfolio. We determined we were unlikely to hold the assets long enough to realize the future value of certain deferred tax assets generated by the net operating losses of its taxable REIT subsidiaries.
(6)For the nine months ended September 30, 2020, represents the tax benefit from the CARES Act, which extended the net operating loss carryback period to five years.
(7)In connection with the acquisition of the remaining 51% interest in the CCRC JV in January 2020, we consolidated the 13 communities in the CCRC JV and recorded the assets and liabilities at their acquisition date relative fair values, including the CCRC contract liabilities associated with previously collected non-refundable entrance fees. In conjunction with increasing those CCRC contract liabilities to their fair value, we concluded that we will no longer adjust for the timing difference between non-refundable entrance fees collected and amortized as we believe the amortization of these fees is a meaningful representation of how we satisfy the performance obligations of the fees. As such, upon consolidation of the CCRC assets, we no longer exclude the difference between CCRC entrance fees collected and amortized from the calculation of AFFO. For comparative periods presented, the adjustment continues to represent our 49% share of non-refundable entrance fees collected by the CCRC JV, net of reserves and net of CCRC JV entrance fee amortization.
(8)Primarily includes our share of AFFO capital expenditures from unconsolidated joint ventures, partially offset by noncontrolling interests' share of AFFO capital expenditures from consolidated joint ventures.



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8
Reconciliations
In thousands

Projected SS Cash NOI(1)
For the projected year 2020 (low)
Life ScienceMedical OfficeOther
SS cash NOI (from withdrawn guidance)(2)
$254 $302 $43 
Outlook adjustment3 — — 
SS cash NOI outlook$257 $302 $43 

For the projected year 2020 (high)
Life ScienceMedical OfficeOther
SS cash NOI (from withdrawn guidance)(2)
$256 $305 $43 
Outlook adjustment2 (1)— 
SS cash NOI outlook$258 $304 $43 

For the year ended December 31, 2019
Life ScienceMedical OfficeOther
SS cash NOI$244 $297 $42 

Potential SS cash NOI outlook for the full year 2020
Life ScienceMedical OfficeOther
Low5.25 %1.75 %1.75 %
High5.75 %2.25 %2.50 %
______________________________________
(1)Please note that the figures provided on this page do not represent guidance, but a framework to help quantify potential outcomes and impacts from COVID-19.
(2)In March 2020, we withdrew our 2020 guidance issued on February 11, 2020, as it did not include any adverse impact form COVID-19. A reconciliation of 2020 projected SS cash NOI to the most directly comparable financial measure calculated and presented in accordance with GAAP was prepared as part of our fourth quarter 2019 Discussion and Reconciliation of Non-GAAP Financial Measures, which is available on our website. As such, we have adjusted such amounts for the potential impacts from COVID-19 to provide a year-over year SS cash NOI outlook.
Projected Future Operations
In March 2020, we withdrew our 2020 guidance issued on February 11, 2020, as it did not include any adverse impact form COVID-19 outbreak. When the extent and timing of the outbreak becomes more clear, and we are then in a position to estimate the varying impacts across our diversified portfolio, including an updated sources and uses, we will make additional disclosures and update our guidance as appropriate.
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9
Reconciliations
In thousands

Enterprise Gross Assets and Portfolio Investment(1)
September 30, 2020
Senior Housing Triple-netSHOPCCRCLife ScienceMedical OfficeOtherCorporate Non-segmentTotal
Consolidated total assets$752,508 $2,791,741 $2,237,948 $5,747,332 $3,620,831 $426,507 $174,954 $15,751,821 
Investments in and advances to unconsolidated JVs— (425,992)(347)— (9,720)(212)— (436,271)
Accumulated depreciation and amortization315,785 500,002 159,618 934,031 1,405,583 100,425 — 3,415,444 
Consolidated Gross Assets$1,068,293 $2,865,751 $2,397,219 $6,681,363 $5,016,694 $526,720 $174,954 $18,730,994 
Healthpeak's share of unconsolidated JV gross assets— 609,834 69,897 — 18,599 — — 698,330 
Enterprise Gross Assets$1,068,293 $3,475,585 $2,467,116 $6,681,363 $5,035,293 $526,720 $174,954 $19,429,324 
Land held for development— (2,362)(3,494)(86,352)(3,252)— — (95,460)
Fully depreciated real estate and intangibles48,720 223,639 11,427 378,549 468,312 9,181 — 1,139,828 
Non-real estate related assets(2)
(94,770)(175,428)(245,834)(241,588)(333,422)18,010 (174,954)(1,247,986)
Real estate intangible liabilities(7,991)(8,599)— (138,198)(90,786)(4,871)— (250,445)
Noncontrolling interests' share of consolidated JVs real estate and related intangibles— (11,643)— (3,278)(386,008)— — (400,929)
Portfolio Investment $1,014,252 $3,501,192 $2,229,215 $6,590,496 $4,690,137 $549,040 $— $18,574,332 
______________________________________
(1)During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures.
(2)Includes straight-line rent payables and receivables, net of reserves; lease commissions - 2nd generation, net of amortization; cash and restricted cash; operating lease right-of-use assets, net; and other assets, net.


 




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10
Reconciliations
In thousands

Revenues(1)
Three Months Ended
September 30, 2019December 31, 2019March 31, 2020   June 30, 2020September 30, 2020
Senior housing triple-net$47,956 $42,603 $33,135 $24,589 $24,558 
SHOP212,275 206,704 170,961 155,293 149,615 
CCRC— 3,010 91,780 113,926 115,031 
Life science118,561 120,155 128,883 138,496 148,702 
Medical office143,639 143,769 145,146 141,636 145,153 
Other15,540 15,450 15,245 14,500 14,680 
Total revenues$537,971 $531,691 $585,150 $588,440 $597,739 
Senior housing triple-net— — — — — 
SHOP— — — 2,209 392 
CCRC— — — 11,871 1,761 
Life science— — — — — 
Medical office— — — — — 
Other— — — — — 
Government grant income$— $— $— $14,080 $2,153 
Senior housing triple-net— — — — — 
SHOP— — — — — 
CCRC— — — — — 
Life science— — — — — 
Medical office— — — — — 
Other(2,741)(2,976)(3,688)(4,230)(4,443)
Less: Interest income$(2,741)$(2,976)$(3,688)$(4,230)$(4,443)
Senior housing triple-net— — — — — 
SHOP4,943 8,131 25,765 24,684 23,800 
CCRC52,671 53,632 21,647 4,781 4,295 
Life science— — — — — 
Medical office701 695 695 691 699 
Other5,227 4,636 86 — — 
Healthpeak's share of unconsolidated JVs real estate revenues$63,542 $67,094 $48,193 $30,156 $28,794 
Senior housing triple-net— — — — — 
SHOP— — — 270 49 
CCRC— — — 534 246 
Life science— — — — — 
Medical office— — — — — 
Other— — — — — 
Healthpeak's share of unconsolidated JVs government grant income$— $— $— $804 $295 
Senior housing triple-net— — — — — 
SHOP(515)(521)(538)(504)(459)
CCRC— — — — — 
Life science(52)(54)(52)(57)(66)
Medical office(8,605)(8,709)(8,640)(8,347)(8,788)
Other— — — — — 
Noncontrolling interests' share of consolidated JVs real estate revenues$(9,172)$(9,284)$(9,230)$(8,908)$(9,313)




Continued
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11
Reconciliations
In thousands

Revenues(1)
Three Months Ended
September 30, 2019December 31, 2019March 31, 2020   June 30, 2020September 30, 2020
Senior housing triple-net$47,956 $42,603 $33,135 $24,589 $24,558 
SHOP216,703 214,314 196,188 181,952 173,397 
CCRC52,671 56,642 113,427 131,112 121,333 
Life science118,509 120,101 128,831 138,439 148,636 
Medical office135,735 135,755 137,201 133,980 137,064 
Other18,026 17,110 11,643 10,270 10,237 
Portfolio Real Estate Revenues$589,600 $586,525 $620,425 $620,342 $615,225 
Senior housing triple-net(1,551)(2,201)(3,388)(20)79 
SHOP957 742 549 107 (200)
CCRC5,748 3,245 (177)(4)22 
Life science(7,075)(4,969)(4,293)(2,793)(8,343)
Medical office(2,270)(2,031)(2,104)(1,599)(2,929)
Other79 138 461 485 558 
Non-cash adjustments to Portfolio Real Estate Revenues$(4,112)$(5,076)$(8,952)$(3,824)$(10,813)
Senior housing triple-net46,405 40,402 29,747 24,569 24,637 
SHOP217,660 215,056 196,737 182,059 173,197 
CCRC58,419 59,887 113,250 131,108 121,355 
Life science111,434 115,132 124,538 135,646 140,293 
Medical office133,465 133,724 135,097 132,381 134,135 
Other18,105 17,248 12,104 10,755 10,795 
Portfolio Cash Real Estate Revenues$585,488 $581,449 $611,473 $616,518 $604,412 
Senior housing triple-net(35,388)(29,312)(18,619)(13,083)(13,135)
SHOP(183,402)(180,892)(162,497)(149,056)(140,661)
CCRC(58,419)(59,887)(113,250)(131,108)(121,355)
Life science(21,345)(25,794)(35,531)(42,910)(45,686)
Medical office(13,639)(13,239)(14,190)(13,674)(11,919)
Other(11,284)(10,376)(5,127)(3,921)(3,923)
Non-SS Portfolio Cash Real Estate Revenues$(323,477)$(319,500)$(349,214)$(353,752)$(336,679)
Senior housing triple-net11,017 11,090 11,128 11,486 11,502 
SHOP34,258 34,164 34,240 33,003 32,536 
CCRC— — — — — 
Life science90,089 89,338 89,007 92,736 94,607 
Medical office119,826 120,485 120,907 118,707 122,216 
Other6,821 6,872 6,977 6,834 6,872 
Portfolio Cash Real Estate Revenues - SS$262,011 $261,949 $262,259 $262,766 $267,733 
______________________________________
(1)During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.


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12
Reconciliations
In thousands

Operating Expenses(1)
Three Months Ended
September 30, 2019December 31, 2019March 31, 2020   June 30, 2020September 30, 2020
Senior housing triple-net$865 $1,842 $506 $526 $421 
SHOP166,201 162,893 138,130 137,507 130,729 
CCRC— 2,211 156,482 94,248 94,992 
Life science29,520 30,480 30,201 34,205 36,714 
Medical office51,472 50,903 50,687 49,350 51,430 
Other11 53 7 5 6 
Operating expenses$248,069 $248,382 $376,013 $315,841 $314,292 
Senior housing triple-net— — — — — 
SHOP3,816 5,983 17,956 18,686 18,280 
CCRC43,193 43,452 18,037 4,826 4,797 
Life science— — — — — 
Medical office279 270 275 275 296 
Other23 20 (2)1 — 
Healthpeak's share of unconsolidated JVs operating expenses$47,311 $49,725 $36,266 $23,788 $23,373 
Senior housing triple-net— — — — — 
SHOP(388)(350)(377)(411)(361)
CCRC— — — — — 
Life science(16)(17)(17)(18)(18)
Medical office(2,593)(2,596)(2,600)(2,507)(2,630)
Other— — — — — 
Noncontrolling interests' share of consolidated JVs operating expenses$(2,997)$(2,963)$(2,994)$(2,936)$(3,009)
Senior housing triple-net865 1,842 506 526 421 
SHOP169,629 168,526 155,709 155,782 148,648 
CCRC43,193 45,663 174,519 99,074 99,789 
Life science29,504 30,463 30,184 34,187 36,696 
Medical office49,158 48,577 48,362 47,118 49,096 
Other34 73 5 6 6 
Portfolio Operating Expenses$292,383 $295,144 $409,285 $336,693 $334,656 
Senior housing triple-net(14)(1,093)(14)(61)(14)
SHOP218 125 18 (11)1,028 
CCRC113 91 (91,738)(22)(1,662)
Life science(13)(13)(13)(14)(13)
Medical office(661)(654)(647)(648)(642)
Other— 1 — — — 
Non-cash adjustments to Portfolio Operating Expenses$(357)$(1,543)$(92,394)$(756)$(1,303)
Senior housing triple-net851 749 492 465 407 
SHOP169,847 168,651 155,727 155,771 149,676 
CCRC43,306 45,754 82,781 99,052 98,127 
Life science29,491 30,450 30,171 34,173 36,683 
Medical office48,497 47,923 47,715 46,470 48,454 
Other34 74 5 6 6 
Portfolio Cash Operating Expenses$292,026 $293,601 $316,891 $335,937 $333,353 


Continued
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13
Reconciliations
In thousands

Operating Expenses(1)
Three Months Ended
September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Senior housing triple-net$(827)$(731)$(464)$(438)$(381)
SHOP(147,784)(146,682)(134,115)(133,324)(127,403)
CCRC(43,306)(45,754)(82,781)(99,052)(98,127)
Life science(6,166)(7,117)(8,182)(11,307)(12,524)
Medical office(5,873)(5,546)(6,045)(5,857)(5,951)
Other(29)1 — (2)(2)
Non-SS Portfolio Cash Operating Expenses$(203,985)$(205,829)$(231,587)$(249,980)$(244,388)
Senior housing triple-net24 18 28 27 26 
SHOP22,063 21,969 21,612 22,447 22,273 
CCRC— — — — — 
Life science23,325 23,333 21,989 22,866 24,159 
Medical office42,624 42,377 41,670 40,613 42,503 
Other5 75 5 4 4 
Portfolio Cash Operating Expenses - SS$88,041 $87,772 $85,304 $85,957 $88,965 
______________________________________
(1)During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.





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14
Reconciliations
In thousands

RevenuesOperating Expenses
Nine Months Ended
September 30, 2020		Nine Months Ended
September 30, 2020
Senior housing triple-net$82,282 Senior housing triple-net$1,453 
SHOP475,869 SHOP406,366 
CCRC320,737 CCRC345,722 
Life science416,081 Life science101,120 
Medical office431,935 Medical office151,467 
Other44,425 Other18 
Total revenues$1,771,329 Operating expenses$1,006,146 
Senior housing triple-net— Senior housing triple-net— 
SHOP2,601 SHOP54,922 
CCRC13,632 CCRC27,660 
Life science— Life science— 
Medical office— Medical office846 
Other— Other(1)
Government grant income$16,233 Healthpeak's share of unconsolidated JVs operating expenses$83,427 
Senior housing triple-net— Senior housing triple-net— 
SHOP— SHOP(1,149)
CCRC— CCRC— 
Life science— Life science(53)
Medical office— Medical office(7,737)
Other(12,361)Other— 
Less: Interest income$(12,361)Noncontrolling interests' share of consolidated JVs operating expenses$(8,939)
Senior housing triple-net— Senior housing triple-net1,453 
SHOP74,249 SHOP460,139 
CCRC30,723 CCRC373,382 
Life science— Life science101,067 
Medical office2,085 Medical office144,576 
Other86 Other17 
Healthpeak's share of unconsolidated JVs real estate revenues$107,143 Portfolio Operating Expenses$1,080,634 
Senior housing triple-net— Senior housing triple-net(89)
SHOP319 SHOP1,035 
CCRC780 CCRC(93,422)
Life science— Life science(40)
Medical office— Medical office(1,937)
Other— Other— 
Healthpeak's share of unconsolidated JVs government grant income$1,099 Non-cash adjustments to Portfolio Operating Expenses$(94,453)
Senior housing triple-net— Senior housing triple-net1,364 
SHOP(1,501)SHOP461,174 
CCRC— CCRC279,960 
Life science(175)Life science101,027 
Medical office(25,775)Medical office142,639 
Other— Other17 
Noncontrolling interests' share of consolidated JVs real estate revenues$(27,451)Portfolio Cash Operating Expenses$986,181 


Continued
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15
Reconciliations
In thousands

RevenuesOperating Expenses
Nine Months Ended
September 30, 2020		Nine Months Ended
September 30, 2020
Senior housing triple-net$82,282 Senior housing triple-net$(1,283)
SHOP551,537 SHOP(422,155)
CCRC365,872 CCRC(279,960)
Life science415,906 Life science(40,257)
Medical office408,245 Medical office(19,847)
Other32,150 Other(4)
Portfolio Real Estate Revenues$1,855,992 
Non-SS Portfolio Cash Operating Expenses(2)
$(763,506)
Senior housing triple-net(3,329)Senior housing triple-net81 
SHOP456 SHOP39,019 
CCRC(159)CCRC— 
Life science(15,429)Life science60,770 
Medical office(6,632)Medical office122,792 
Other1,504 Other13 
Non-cash adjustments to Portfolio Real Estate Revenues$(23,589)
Portfolio Cash Operating Expenses - SS(2)
$222,675 
Senior housing triple-net78,953 
SHOP551,993 
CCRC365,713 
Life science400,477 
Medical office401,613 
Other33,654 
Portfolio Cash Real Estate Revenues$1,832,403 
Senior housing triple-net(44,837)
SHOP(494,357)
CCRC(365,713)
Life science(146,718)
Medical office(44,443)
Other(12,970)
Non-SS Portfolio Cash Real Estate Revenues(1)
$(1,109,038)
Senior housing triple-net34,116 
SHOP57,636 
CCRC— 
Life science253,759 
Medical office357,170 
Other20,684 
Portfolio Cash Real Estate Revenues - SS(1)
$723,365 
______________________________________
(1)The property count used for Non-SS Portfolio Cash Real Estate Revenues and Portfolio Cash Real Estate Revenues - SS differed from the three and nine months ended September 30, 2020.
(2)The property count used for Non-SS Portfolio Cash Operating Expenses and Portfolio Cash Operating Expenses - SS differed for the three and nine months ended September 30, 2020.


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16
Reconciliations
In thousands

EBITDAre and Adjusted EBITDAre
Three Months Ended September 30, 2020
Net income (loss)$(59,581)
Interest expense56,235 
Income tax expense (benefit)24,174 
Depreciation and amortization173,630 
Other depreciation and amortization1,291 
Loss (gain) on sales of real estate(149)
Loss (gain) upon change of control(3,259)
Impairments (recoveries) of depreciable real estate37,477 
Share of unconsolidated JV:
Interest expense874 
Income tax expense (benefit)(509)
Depreciation and amortization24,822 
EBITDAre$255,005 
Transaction-related items2,586 
Other impairments (recoveries) and losses (gains)(2,927)
Loss on debt extinguishments17,921 
Litigation costs (recoveries)26 
Casualty-related charges (recoveries)469 
Amortization of deferred compensation4,420 
Adjusted EBITDAre$277,500 


Adjusted Fixed Charge Coverage
Three Months Ended September 30, 2020
Interest expense$56,235 
Share of unconsolidated JV interest expense874 
Capitalized interest6,860 
Fixed Charges$63,969 
Adjusted Fixed Charge Coverage  4.3x
  

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17
Reconciliations
In thousands

Enterprise Debt and Net Debt
September 30, 2020
Bank line of credit and commercial paper$— 
Term loan249,122 
Senior unsecured notes5,695,567 
Mortgage debt(1)
512,428 
Consolidated Debt$6,457,117 
Share of unconsolidated JV mortgage debt89,200 
Enterprise Debt$6,546,317 
Cash and cash equivalents(197,119)
Share of unconsolidated JV cash and cash equivalents(23,023)
Net Debt$6,326,175 
Financial Leverage
September 30, 2020
Enterprise Debt$6,546,317 
Enterprise Gross Assets19,429,324 
Financial Leverage33.7%
Secured Debt Ratio
September 30, 2020
Mortgage debt(1)
$512,428 
Share of unconsolidated JV mortgage debt89,200 
Enterprise Secured Debt$601,628 
Enterprise Gross Assets19,429,324 
Secured Debt Ratio3.1%
Net Debt to Adjusted EBITDAre
Three Months Ended
September 30, 2020
Net Debt$6,326,175 
Annualized Adjusted EBITDAre(2)
1,110,000 
Net Debt to Adjusted EBITDAre  5.7x
  ______________________________________
(1)Includes mortgage debt of $77.2 million on assets held for sale that matures in 2027 and 2044.
(2)Represents the current quarter Adjusted EBIDTAre multiplied by a factor of four.



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18
Reconciliations
In thousands

Segment Cash NOI, Portfolio Income, and SS
Total Portfolio(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$(42,308)$47,359 $282,540 $55,049 $(59,581)
Interest income(2,741)(2,976)(3,688)(4,230)(4,443)
Interest expense61,230 58,120 58,376 57,550 56,235 
Depreciation and amortization171,944 190,798 189,276 178,488 173,630 
General and administrative22,970 21,521 22,349 23,720 21,661 
Transaction costs 1,319 1,569 14,848 627 2,586 
Loss (gain) on sales of real estate, net784 (4,193)(164,869)(82,863)(149)
Impairments and loan loss (reserves) recoveries, net38,257 110,284 39,123 24,050 34,550 
Other expense (income), net(693)(157,296)(210,608)(19,586)(7,060)
Loss on debt extinguishments35,017 22,213 (833)25,824 17,921 
Income tax expense (benefit)(6,261)(5,679)(33,044)(7,346)24,174 
Government grant income— — — 14,080 2,153 
Equity loss (income) from unconsolidated JVs7,643 (1,387)11,979 17,086 19,480 
Healthpeak's share of unconsolidated JVs NOI16,231 17,369 11,927 7,172 5,716 
Noncontrolling interests' share of consolidated JVs NOI(6,175)(6,321)(6,236)(5,972)(6,304)
Portfolio NOI$297,217 $291,381 $211,140 $283,649 $280,569 
Adjustment to Portfolio NOI(3,755)(3,533)83,442 (3,068)(9,510)
Portfolio Cash NOI$293,462 $287,848 $294,582 $280,581 $271,059 
Interest income2,741 2,976 3,688 4,230 4,443 
Healthpeak's share of unconsolidated JVs interest income87 80 — — — 
Portfolio Income$296,290 $290,904 $298,270 $284,811 $275,502 
Interest income(2,741)(2,976)(3,688)(4,230)(4,443)
Healthpeak's share of unconsolidated JVs interest income(87)(80)— — — 
Adjustment to Portfolio NOI3,755 3,533 (83,442)3,068 9,510 
Non-SS NOI(118,458)(114,208)(30,954)(105,633)(96,910)
SS NOI$178,759 $177,173 $180,186 $178,016 $183,659 
Non-cash adjustment to SS NOI(4,789)(2,996)(3,231)(1,207)(4,891)
SS Cash NOI$173,970 $174,177 $176,955 $176,809 $178,768 


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19
Reconciliations
In thousands

Senior Housing Triple-Net(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$26,782 $9,513 $184,760 $15,809 $5,301 
Interest expense106 102 82 72 45 
Depreciation and amortization12,773 10,202 7,160 7,175 6,694 
Impairments and loan loss (reserves) recoveries, net7,430 20,944 4,670 1,007 12,097 
Loss (gain) on sales of real estate, net— — (164,043)— — 
Portfolio NOI$47,091 $40,761 $32,629 $24,063 $24,137 
Adjustment to Portfolio NOI(1,537)(1,108)(3,374)41 93 
Portfolio Cash NOI$45,554 $39,653 $29,255 $24,104 $24,230 
Adjustment to Portfolio NOI1,537 1,108 3,374 (41)(93)
Non-SS NOI(36,055)(29,719)(22,013)(13,401)(13,616)
SS NOI$11,036 $11,042 $10,616 $10,662 $10,521 
Non-cash adjustment to SS NOI(43)30 484 797 955 
SS Cash NOI$10,993 $11,072 $11,100 $11,459 $11,476 


SHOP(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$(40,562)$46,024 $(69,705)$(46,821)$(54,132)
Interest expense2,637 2,893 2,855 2,837 2,649 
Depreciation and amortization58,152 80,106 57,003 31,621 24,966 
Impairments and loan loss (reserves) recoveries, net24,721 86,684 23,285 16,158 24,229 
Loss (gain) on sales of real estate, net734 (10,541)1,243 (1,579)2,134 
Other expense (income), net— (160,886)— (2,209)(392)
Government grant income— — — 2,209 392 
Equity loss (income) from unconsolidated JVs392 (469)18,150 17,779 19,432 
Healthpeak's share of unconsolidated JVs NOI1,127 2,148 7,809 6,268 5,569 
Noncontrolling interests' share of consolidated JVs NOI(127)(171)(161)(93)(98)
Portfolio NOI$47,074 $45,788 $40,479 $26,170 $24,749 
Adjustment to Portfolio NOI739 617 531 118 (1,228)
Portfolio Cash NOI$47,813 $46,405 $41,010 $26,288 $23,521 
Adjustment to Portfolio NOI(739)(617)(531)(118)1,228 
Non-SS NOI(34,798)(33,513)(27,814)(15,708)(14,527)
SS NOI$12,276 $12,275 $12,665 $10,462 $10,222 
Non-cash adjustment to SS NOI(81)(80)(37)94 41 
SS Cash NOI$12,195 $12,195 $12,628 $10,556 $10,263 








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20
Reconciliations
In thousands

CCRC(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$(9,194)$(7,321)$82,217 $826 $(8,469)
Interest expense— — 1,304 1,969 1,983 
Depreciation and amortization— — 20,229 31,426 30,106 
Other expense (income), net— 5,665 (170,332)(14,142)(3,903)
Government grant income— — — 11,871 1,761 
Equity loss (income) from unconsolidated JVs9,194 2,455 1,880 (401)322 
Healthpeak's share of unconsolidated JVs NOI9,478 10,180 3,610 489 (256)
Portfolio NOI$9,478 $10,979 $(61,092)$32,038 $21,544 
Adjustment to Portfolio NOI5,635 3,154 91,561 18 1,684 
Portfolio Cash NOI$15,113 $14,133 $30,469 $32,056 $23,228 
Adjustment to Portfolio NOI(5,635)(3,154)(91,561)(18)(1,684)
Non-SS NOI(9,478)(10,979)61,092 (32,038)(21,544)
SS NOI$— $— $— $— $— 
Non-cash adjustment to SS NOI— — — — — 
SS Cash NOI$— $— $— $— $— 

Life Science(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$43,858 $43,975 $48,408 $51,875 $54,761 
Interest expense68 66 63 60 57 
Depreciation and amortization45,028 45,634 50,211 52,356 57,170 
Loss (gain) on sales of real estate, net87 — — — — 
Noncontrolling interests' share of consolidated JVs NOI(36)(37)(35)(39)(48)
Portfolio NOI$89,005 $89,638 $98,647 $104,252 $111,940 
Adjustment to Portfolio NOI(7,062)(4,956)(4,280)(2,779)(8,330)
Portfolio Cash NOI$81,943 $84,682 $94,367 $101,473 $103,610 
Adjustment to Portfolio NOI7,062 4,956 4,280 2,779 8,330 
Non-SS NOI(19,265)(22,157)(29,317)(33,216)(37,628)
SS NOI$69,740 $67,481 $69,330 $71,036 $74,312 
Non-cash adjustment to SS NOI(2,976)(1,476)(2,312)(1,166)(3,864)
SS Cash NOI$66,764 $66,005 $67,018 $69,870 $70,448 











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21
Reconciliations
In thousands

Medical Office(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$32,387 $37,259 $40,808 $116,989 $41,208 
Interest expense108 105 102 100 100 
Depreciation and amortization54,152 53,323 53,148 54,572 53,688 
Impairments and loan loss (reserves) recoveries, net5,729 2,656 2,706 2,119 1,208 
Loss (gain) on sales of real estate, net7 (263)(2,109)(81,284)(2,283)
Equity loss (income) from unconsolidated JVs(216)(214)(196)(210)(198)
Healthpeak's share of unconsolidated JVs NOI422 425 420 416 403 
Noncontrolling interests' share of consolidated JVs NOI(6,012)(6,113)(6,040)(5,840)(6,158)
Portfolio NOI$86,577 $87,178 $88,839 $86,862 $87,968 
Adjustment to Portfolio NOI(1,609)(1,377)(1,457)(951)(2,287)
Portfolio Cash NOI$84,968 $85,801 $87,382 $85,911 $85,681 
Adjustment to Portfolio NOI1,609 1,377 1,457 951 2,287 
Non-SS NOI(7,587)(7,510)(8,146)(7,746)(6,117)
SS NOI$78,990 $79,668 $80,693 $79,116 $81,851 
Non-cash adjustment to SS NOI(1,788)(1,560)(1,456)(1,022)(2,138)
SS Cash NOI$77,202 $78,108 $79,237 $78,094 $79,713 

Other(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$16,064 $10,412 $54,773 $8,473 $16,728 
Interest income(2,741)(2,976)(3,688)(4,230)(4,443)
Depreciation and amortization1,839 1,533 1,525 1,338 1,006 
Impairments and loan loss (reserves) recoveries, net377 — 8,462 4,766 (2,984)
Loss (gain) on sales of real estate, net(44)6,611 40 — — 
Other expense (income), net(980)— (41,707)— — 
Equity loss (income) from unconsolidated JVs(1,727)(3,159)(7,855)(82)(76)
Healthpeak's share of unconsolidated JVs NOI5,204 4,616 88 (1)— 
Portfolio NOI$17,992 $17,037 $11,638 $10,264 $10,231 
Adjustment to Portfolio NOI79 137 461 485 558 
Portfolio Cash NOI$18,071 $17,174 $12,099 $10,749 $10,789 
Interest income2,741 2,976 3,688 4,230 4,443 
Healthpeak's share of unconsolidated JVs interest income87 80 — — — 
Portfolio Income$20,899 $20,230 $15,787 $14,979 $15,232 
Interest income(2,741)(2,976)(3,688)(4,230)(4,443)
Healthpeak's share of unconsolidated JVs interest income(87)(80)— — — 
Adjustment to Portfolio NOI(79)(137)(461)(485)(558)
Non-SS NOI(11,275)(10,330)(4,756)(3,524)(3,478)
SS NOI$6,717 $6,707 $6,882 $6,740 $6,753 
Non-cash adjustment to SS NOI99 90 90 90 115 
SS Cash NOI$6,816 $6,797 $6,972 $6,830 $6,868 
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22
Reconciliations
In thousands

Corporate Non-Segment(1)
Three Months Ended
 September 30, 2019December 31, 2019March 31, 2020June 30, 2020September 30, 2020
Net Income (loss)$(111,643)$(92,503)$(58,721)$(92,102)$(114,978)
Interest expense58,311 54,954 53,970 52,512 51,401 
General and administrative22,970 21,521 22,349 23,720 21,661 
Transaction costs 1,319 1,569 14,848 627 2,586 
Other expense (income), net287 (2,075)1,431 (3,235)(2,765)
Loss on debt extinguishments35,017 22,213 (833)25,824 17,921 
Income tax expense (benefit)(6,261)(5,679)(33,044)(7,346)24,174 
Portfolio NOI$— $— $— $— $— 
______________________________________
(1)During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.
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23
Reconciliations
In thousands

Segment Cash NOI, Portfolio Income, and SS
For the nine months ended September 30, 2020(1)
Senior Housing Triple-NetSHOPCCRCLife ScienceMedical OfficeOtherCorporate Non-segmentTotal
Net Income (loss)$205,868 $(170,658)$74,575 $155,044 $199,005 $79,975 $(265,801)$278,008 
Interest income— — — — — (12,361)— (12,361)
Interest expense199 8,341 5,256 180 302 — 157,883 172,161 
Depreciation and amortization21,031 113,591 81,760 159,737 161,408 3,867 — 541,394 
General and administrative— — — — — — 67,730 67,730 
Transaction costs— — — — — — 18,061 18,061 
Impairments and loan loss (reserves) recoveries, net17,774 63,672 — — 6,033 10,244 — 97,723 
Loss (gain) on sales of real estate, net(164,043)1,798 — — (85,676)40 — (247,881)
Loss on debt extinguishments— — — — — — 42,912 42,912 
Other expense (income), net— (2,601)(188,377)— — (41,707)(4,569)(237,254)
Income tax expense (benefit)— — — — — — (16,216)(16,216)
Government grant income— 2,601 13,632 — — — — 16,233 
Healthpeak's share of unconsolidated joint venture NOI— 19,646 3,843 — 1,239 87 — 24,815 
Noncontrolling interests' share of consolidated joint venture NOI— (352)— (122)(18,038)— — (18,512)
Equity loss (income) from unconsolidated JVs— 55,360 1,801 — (604)(8,012)— 48,545 
NOI$80,829 $91,398 $(7,510)$314,839 $263,669 $32,133 $— $775,358 
Adjustment to NOI(3,240)(579)93,263 (15,389)(4,695)1,504 — 70,864 
Cash NOI$77,589 $90,819 $85,753 $299,450 $258,974 $33,637 $— $846,222 
Interest Income— — — — — 12,361 12,361 
Portfolio Income $77,589 $90,819 $85,753 $299,450 $258,974 $45,998 $— $858,583 
Interest income— — — — — (12,361)— (12,361)
Adjustment to NOI3,240 579 (93,263)15,389 4,695 (1,504)— (70,864)
Non-SS NOI(49,030)(72,881)7,510 (117,307)(24,702)(11,758)— (268,168)
SS NOI$31,799 $18,517 $— $197,532 $238,967 $20,375 $— $507,190 
Non-cash adjustment to SS NOI2,236 100 — (4,543)(4,589)296 — (6,500)
SS cash NOI$34,035 $18,617 $— $192,989 $234,378 $20,671 $— $500,690 
______________________________________
(1)During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.

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24
Reconciliations
In thousands

For the nine months ended September 30, 2019
Senior Housing Triple-NetSHOPCCRCLife ScienceMedical OfficeOtherCorporate Non-segmentTotal
Net Income (loss)$88,471 $(81,755)$(13,858)$124,373 $104,290 $44,765 $(253,584)$12,702 
Interest income— — — — — (6,868)— (6,868)
Interest expense901 4,626 — 211 328 — 161,433 167,499 
Depreciation and amortization45,138 134,481 — 122,705 161,350 5,517 — 469,191 
General and administrative— — — — — — 71,445 71,445 
Transaction costs— — — — — — 7,174 7,174 
Impairments and loan loss (reserves) recoveries, net22,914 77,685 — — 14,677 377 — 115,653 
Loss (gain) on sales of real estate, net(3,557)(8,844)— (3,651)(2,876)220 — (18,708)
Loss on debt extinguishments— — — — — — 36,152 36,152 
Other expense (income), net— (12,817)— — — (980)(11,037)(24,834)
Income tax expense (benefit)— — — — — — (11,583)(11,583)
Healthpeak's share of unconsolidated joint venture NOI— 4,107 30,718 — 1,278 16,190 — 52,293 
Noncontrolling interests' share of consolidated joint venture NOI(1)(452)— (92)(17,776)— — (18,321)
Equity loss (income) from unconsolidated JVs— 1,473 13,858 — (643)(4,676)— 10,012 
NOI$153,866 $118,504 $30,718 $243,546 $260,628 $54,545 $— $861,807 
Adjustment to NOI3,834 2,819 13,832 (17,146)(4,569)(413)— (1,643)
Cash NOI$157,700 $121,323 $44,550 $226,400 $256,059 $54,132 $— $860,164 
Interest Income— — — — — 6,868 — 6,868 
Healthpeak's share of unconsolidated joint venture interest income— — — — — 270 — 270 
Portfolio Income $157,700 $121,323 $44,550 $226,400 $256,059 $61,270 $— $867,302 
Interest income— — — — — (6,868)— (6,868)
Healthpeak's share of unconsolidated joint venture interest income— — — — — (270)— (270)
Adjustment to NOI(3,834)(2,819)(13,832)17,146 4,569 413 — 1,643 
Non-SS NOI(120,778)(95,619)(30,718)(55,536)(26,421)(34,361)— (363,433)
SS NOI$33,088 $22,885 $— $188,010 $234,207 $20,184 $— $498,374 
Non-cash adjustment to SS NOI(175)90 — (5,396)(5,090)(115)— (10,686)
SS cash NOI$32,913 $22,975 $— $182,614 $229,117 $20,069 $— $487,688 

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25
Reconciliations
In thousands

Pro forma Portfolio Income(1)
Three Months Ended September 30, 2020
Senior Housing Triple-netSHOPCCRCLife ScienceMedical OfficeOtherTotal
Portfolio Income(2)(3)
$24,230 $23,521 $23,228 $103,610 $85,681 $15,232 $275,503 
Pro forma Adjustments:
Senior housing asset sales and transitions(13,120)(10,626)249 — — — (23,497)
Other pro forma adjustments— — — — (367)(4,300)(4,667)
Pro forma Portfolio Income$11,110 $12,895 $23,477 $103,610 $85,314 $10,932 $247,338 
 ______________________________________
(1)May not add due to rounding.
(2)See pages 19 to 25 of this document for a reconciliation of Portfolio Income to net income.
(3)Pro forma to exclude assets held for sale and to reflect acquisitions, dispositions, and operator transitions that occurred within the quarter as if they occurred on the first day of the quarter. Does not contemplate future acquisitions.






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26
Reconciliations
In thousands, except per month data
REVPOR(1)
SHOP
Three Months Ended
September 30,
2019		December 31,
2019		March 31,
2020		June 30,
2020		September 30,
2020
REVPOR SHOP
Portfolio Real Estate Revenues$216,703 $214,314 $196,188 $181,952 $173,397 
Adjustments to Portfolio Real Estate Revenues957 742 549 107 (200)
Portfolio Cash Real Estate Revenues$217,660 $215,056 $196,737 $182,059 $173,197 
Other adjustments to REVPOR SHOP(2)
(28,945)(50,116)(49,938)(47,386)(132,073)
REVPOR SHOP revenues$188,714 $164,939 $146,798 $134,673 $41,124 
Average occupied units/month11,838 9,927 8,422 7,823 2,400 
REVPOR SHOP per month(3)
$5,314 $5,538 $5,810 $5,738 $5,712 
SS REVPOR SHOP
REVPOR SHOP revenues$188,714 $164,939 $146,798 $134,673 $41,124 
Change in reporting structure(4)
— — — — — 
Other non-SS cash real estate revenues(154,457)(130,775)(112,558)(101,670)(8,589)
SS REVPOR SHOP revenues$34,258 $34,164 $34,240 $33,003 $32,536 
SS average occupied units/month2,279 2,279 2,249 2,162 2,101 
SS REVPOR SHOP per month(3)
$5,010 $4,996 $5,075 $5,087 $5,163 

CCRC
Three Months Ended
September 30,
2019		December 31,
2019		March 31,
2020		June 30,
2020		September 30,
2020
REVPOR CCRC
Portfolio Real Estate Revenues$52,671 $56,642 $113,427 $131,112 $121,334 
Adjustments to Portfolio Real Estate Revenues5,748 3,245 (177)(4)21 
Portfolio Cash Real Estate Revenues$58,419 $59,887 $113,250 $131,108 $121,355 
Other adjustments to REVPOR CCRC(5)
(10,723)(11,391)(6,414)(5,311)(4,563)
REVPOR CCRC revenues$47,696 $48,496 $106,836 $125,797 $116,793 
Average occupied units/month3,032 3,056 5,473 5,979 5,909 
REVPOR CCRC per month(3)
$5,243 $5,290 $6,507 $7,014 $6,589 
______________________________________
(1)May not add due to rounding.
(2)Includes revenue for newly completed facilities under lease-up, facilities sold or held for sale, facilities acquired or transitioned to new operators during the relevant period, and assets in redevelopment.
(3)Represents the current quarter REVPOR SHOP or REVPOR CCRC divided by a factor of three.
(4)Represents revenues for assets that converted from senior housing triple-net to SHOP during the year-over-year comparison period.
(5)Includes revenue from non-refundable entrance fees, facilities converted to a new operating structure during the relevant period, and facilities that are held for sale.

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27