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 stock-based compensation, (ii) amortization of deferred financing costs, net, (iii) straight-line rents, (iv) deferred income taxes, and (v) other AFFO adjustments which includes: (a) amortization of acquired market lease intangibles, net, (b) non-cash interest related to DFLs and lease incentive amortization (reduction of straight-line rents), (c) actuarial reserves for insurance claims that have been incurred but not reported, and (d) amortization of 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 is computed after deducting recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements, and includes adjustments to compute our share of AFFO from our unconsolidated joint ventures. 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) restructuring and severance-related charges, 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.
2
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.
3
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, other impairments (recoveries) and other losses (gains), restructuring and severance 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. Other impairments (recoveries) and other losses (gains) include interest income associated with early and partial repayments of loans receivable and other losses or gains associated with non-depreciable assets including goodwill, DFLs, undeveloped land parcels, and loans receivable. 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
4
Definitions
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.
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 (“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 Adjusted NOI Portfolio Adjusted NOI is Portfolio Cash Real Estate Revenues less Portfolio Cash Operating Expenses.
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 (Adjusted) NOI plus interest income plus our pro rata share of Cash (Adjusted) NOI from our unconsolidated JVs less noncontrolling interests' pro rata share of Cash (Adjusted) 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 Other The 3-month average Cash Real Estate Revenues per occupied unit for the most recent period available. REVPOR Other excludes newly completed assets under lease-up, assets sold, acquired or converted to a new operating structure 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 Other portfolio as units reflect 100% of the unit capacities for unconsolidated JVs and revenue is at the Company's pro rata share. REVPOR Other is a non-GAAP supplemental financial measure used to evaluate the revenue-generating capacity and profit
5
Definitions
potential of our other 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 other 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.
Same-Store ("SS") Same-Store NOI and Cash (Adjusted) 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 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. We do not report Same-Store metrics for our other non-reportable segments.
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 The Company’s diverse portfolio is comprised of investments in the following reportable healthcare segments: (i) life science; (ii) medical office; (iii) continuing care retirement community (“CCRC”), and (iv) other non-reportable segment. During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and Senior Housing Operating (“SHOP”) portfolios, which until the quarter ended December 31, 2020 had separately been disclosed as two segments.
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 ("JVs") 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.
Stabilized / Stabilization 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.
6
Reconciliations
In thousands, except per share data
Funds From Operations
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Net income (loss) applicable to common shares
$
275,993
$
51,131
$
419,336
$
328,786
Real estate related depreciation and amortization(1)
171,459
178,488
328,997
367,764
Healthpeak's share of real estate related depreciation and amortization from unconsolidated joint ventures
2,869
25,618
7,322
55,228
Noncontrolling interests' share of real estate related depreciation and amortization
(4,923)
(4,980)
(9,809)
(10,023)
Other real estate-related depreciation and amortization
—
891
—
2,128
Loss (gain) on sales of depreciable real estate, net(1)
(297,476)
(82,863)
(557,138)
(247,732)
Healthpeak's share of loss (gain) on sales of depreciable real estate, net, from unconsolidated joint ventures
(5,866)
(1,519)
(5,866)
(9,248)
Noncontrolling interests' share of gain (loss) on sales of depreciable real estate, net
2,179
(3)
2,179
(3)
Loss (gain) upon change of control, net(2)
—
(2,528)
(1,042)
(169,962)
Taxes associated with real estate dispositions
1,693
335
2,183
(11,540)
Impairments (recoveries) of depreciable real estate, net
3,743
17,797
3,743
48,519
Nareit FFO applicable to common shares
149,671
182,367
189,905
353,917
Distributions on dilutive convertible units and other
—
—
—
3,501
Diluted Nareit FFO applicable to common shares
$
149,671
$
182,367
$
189,905
$
357,418
Weighted average shares outstanding - diluted Nareit FFO
539,193
538,517
539,081
529,009
Impact of adjustments to Nareit FFO:
Transaction-related items(3)
$
1,265
$
685
$
5,379
$
93,064
Other impairments (recoveries) and other losses (gains), net(4)
1,845
6,291
5,087
(27,015)
Restructuring and severance related charges
—
—
2,463
—
Loss (gain) on debt extinguishments
60,865
25,824
225,157
24,991
Litigation costs (recoveries)
—
100
—
206
Casualty-related charges (recoveries), net
3,596
—
4,644
—
Foreign currency remeasurement losses (gains)
—
143
—
153
Tax rate legislation impact(5)
—
(697)
—
(3,589)
Total adjustments
67,571
32,346
242,730
87,810
FFO as Adjusted applicable to common shares
217,242
214,713
432,635
441,727
Distributions on dilutive convertible units and other
2,144
1,834
4,067
3,390
Diluted FFO as Adjusted applicable to common shares
$
219,386
$
216,547
$
436,702
$
445,117
Weighted average shares outstanding - diluted FFO as Adjusted
546,519
544,018
546,407
529,009
Diluted earnings per common share
$
0.51
$
0.09
$
0.78
$
0.63
Depreciation and amortization
0.32
0.37
0.60
0.79
Loss (gain) on sales of depreciable real estate, net
(0.56)
(0.15)
(1.04)
(0.49)
Loss (gain) upon change of control, net(2)
—
0.00
0.00
(0.32)
Taxes associated with real estate dispositions
0.00
0.00
0.00
(0.02)
Impairments (recoveries) of depreciable real estate, net
0.01
0.03
0.01
0.09
Diluted Nareit FFO per common share
$
0.28
$
0.34
$
0.35
$
0.68
Transaction-related items(3)
0.00
0.00
0.01
0.18
Other impairments (recoveries) and other losses (gains), net(4)
0.00
0.01
0.01
(0.06)
Restructuring and severance related charges
—
—
0.00
—
Loss (gain) on debt extinguishments
0.11
0.05
0.42
0.05
Litigation costs (recoveries)
—
0.00
—
0.00
Casualty-related charges (recoveries), net
0.01
—
0.01
—
Foreign currency remeasurement losses (gains)
—
0.00
—
0.00
Tax rate legislation impact(5)
—
0.00
—
(0.01)
Diluted FFO as Adjusted per common share
$
0.40
$
0.40
$
0.80
$
0.84
7
Reconciliations
In thousands, except per share data
Adjusted Funds From Operations
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
FFO as Adjusted applicable to common shares
$
217,242
$
214,713
$
432,635
$
441,727
Amortization of stock-based compensation
5,095
4,984
9,459
8,972
Amortization of deferred financing costs
2,121
2,534
4,334
5,116
Straight-line rents
(6,201)
(8,316)
(15,336)
(14,544)
AFFO capital expenditures
(22,422)
(18,781)
(43,132)
(40,572)
Deferred income taxes
(2,771)
(6,686)
(4,493)
(1,899)
Other AFFO adjustments
(4,026)
3,478
(9,628)
728
AFFO applicable to common shares
189,038
191,926
373,839
399,528
Distributions on dilutive convertible units and other
1,541
1,864
2,862
3,501
Diluted AFFO applicable to common shares
$
190,579
$
193,790
$
376,701
$
403,029
Weighted average shares outstanding - diluted AFFO
544,694
544,018
544,582
529,009
______________________________________
(1)This amount can be reconciled by combining the balances from the corresponding line of the Consolidated Statements of Operations and the detailed financial information in the Discontinued Operations Reconciliation section of the Supplemental Report.
(2)For the six months ended June 30, 2020, includes a $170 million gain upon consolidation of 13 continuing care retirement communities ("CCRCs") in which we acquired Brookdale's interest and began consolidating during the first quarter of 2020. Gains and losses upon change of control are included in other income (expense), net in the Consolidated Statements of Operations.
(3)For the six months ended June 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 Life Care Services, LLC, partially offset by the tax benefit recognized related to those expenses. The expenses related to terminating management agreements are included in operating expenses in the Consolidated Statements of Operations.
(4)For the three and six months ended June 30, 2021, includes a $7 million goodwill impairment charge in connection with our senior housing triple-net asset sales which is reported in income (loss) from discontinued operations in the Consolidated Statements of Operations and $6 million of accelerated recognition of a mark-to-market discount, less loan fees, resulting from prepayments on loans receivable which is included in interest income in the Consolidated Statements of Operations. For the six months ended June 30, 2020, includes a $42 million gain on sale of a hospital that was in a direct financing lease ("DFL") which is included in other income (expense), net in the Consolidated Statements of Operations. The remaining activity for the three and six months ended June 30, 2021 and 2020 includes reserves for loan losses and land impairments recognized in impairments and loan loss reserves (recoveries), net in the Consolidated Statements of Operations.
(5)For the three and six months ended June 30, 2020, represents the tax benefit from the CARES Act, which extended the net operating loss carryback period to five years.
8
Reconciliations
Per share data
Projected Future Operations(1)
Full Year 2021
Low
High
Diluted earnings per common share
$
0.95
$
1.01
Real estate related depreciation and amortization
1.26
1.26
Healthpeak's share of real estate related depreciation and amortization from unconsolidated joint ventures
0.03
0.03
Noncontrolling interests' share of real estate related depreciation and amortization
(0.04)
(0.04)
Loss (gain) on sales of depreciable real estate, net
(1.15)
(1.15)
Heathpeak's share of loss (gain) on sale of depreciable real estate, net, from unconsolidated joint ventures
(0.01)
(0.01)
Noncontrolling interests' share of gain (loss) on sale of depreciable real estate, net
0.01
0.01
Impairments (recoveries) of depreciable real estate, net
0.01
0.01
Diluted Nareit FFO per common share
$
1.06
$
1.12
Transaction-related items
0.01
0.01
Other impairments (recoveries) and other losses (gains), net(2)
0.05
0.05
Loss (gain) on extinguishment of debt
0.42
0.42
Casualty-related charges (recoveries), net
0.01
0.01
Diluted FFO as adjusted per common share
$
1.55
$
1.61
______________________________________
(1)The foregoing projections reflect management's view of current and future market conditions as of August 3, 2021 including assumptions with respect to rental rates, occupancy levels, development items, and the earnings impact of the events referenced in our earnings press release for the quarter ended June 30, 2021 that was issued on August 3, 2021. However, these projections do not reflect the impact of unannounced future transactions, except as described herein, other impairments or recoveries, the future bankruptcy or insolvency of our operators, lessees, borrowers or other obligors, the effect of any future restructuring of our contractual relationships with such entities, gains or losses on marketable securities, ineffectiveness related to our cash flow hedges, or larger than expected litigation settlements and expenses related to existing or future litigation matters. Our actual results may differ materially from the projections set forth above. The aforementioned ranges represent management's best estimates based upon the underlying assumptions as of August 3, 2021. Except as otherwise required by law, management assumes no, and hereby disclaims any, obligation to update any of the foregoing projections as a result of new information or new or future developments.
(2)The majority of the balance represents the anticipated write off of goodwill related to the disposition of NNN and SHOP portfolios.
9
Reconciliations
In millions
Projected SS Cash NOI(1)(2)
For the projected year 2021 (low)
Life Science
Medical Office
CCRC(3)
Other(4)
Corporate Adjustments and Discontinued Operations
Total
Portfolio Cash (Adjusted) NOI(5)
$
496
$
408
$
87
$
10
$
11
$
1,012
Interest income
—
—
—
23
—
23
Portfolio Income
496
408
87
33
11
1,035
Interest income
—
—
—
(23)
—
(23)
Non-cash adjustments to cash NOI(6)
41
12
11
—
(5)
59
NOI
538
420
97
10
6
1,071
Non-SS NOI
(181)
(87)
(80)
(10)
(6)
(364)
SS NOI
357
333
17
—
—
707
Non-cash adjustments to SS NOI(6)
(13)
(8)
—
—
—
(20)
SS Cash (Adjusted) NOI
$
344
$
326
$
17
$
—
$
—
$
686
Addback adjustments(7)
384
Other income and expenses(8)
664
Costs and expenses(9)
(1,162)
Other impairments (recoveries), net(10)
(37)
Net income (loss)
$
535
For the projected year 2021 (high)
Life Science
Medical Office
CCRC(3)
Other(4)
Corporate Adjustments and Discontinued Operations
Total
Portfolio Cash (Adjusted) NOI(5)
$
500
$
412
$
111
$
20
$
13
$
1,057
Interest income
—
—
—
33
—
33
Portfolio Income
500
412
111
53
13
1,090
Interest income
—
—
—
(33)
—
(33)
Non-cash adjustments to cash NOI(6)
42
12
(4)
—
(5)
44
NOI
542
424
107
20
8
1,101
Non-SS NOI
(182)
(87)
(86)
(20)
(8)
(384)
SS NOI
360
336
21
—
—
717
Non-cash adjustments to SS NOI(6)
(13)
(8)
—
—
—
(21)
SS Cash (Adjusted) NOI
$
347
$
329
$
21
$
—
$
—
$
696
Addback adjustments(7)
405
Other income and expenses(8)
670
Costs and expenses(9)
(1,165)
Other impairments (recoveries), net(10)
(37)
Net income (loss)
$
569
10
Reconciliations
In millions
For the year ended December 31, 2020
Life Science
Medical Office
CCRC(3)
Other(4)
Corporate Adjustments and Discontinued Operations
Total
Portfolio Cash (Adjusted) NOI(5)
$
411
$
390
$
113
$
21
$
204
$
1,140
Interest income
—
—
—
17
—
17
Portfolio Income
411
390
113
38
204
1,156
Interest income
—
—
—
(17)
—
(17)
Non-cash adjustments to cash NOI(6)
20
6
(97)
(1)
(16)
(88)
NOI
431
396
16
21
188
1,052
Non-SS NOI
(93)
(70)
8
(21)
(188)
(364)
SS NOI
338
325
25
—
—
688
Non-cash adjustments to SS NOI(6)
(12)
(6)
—
—
—
(18)
SS Cash (Adjusted) NOI
$
327
$
319
$
25
$
—
$
—
$
670
Addback adjustments(7)
382
Other income and expenses(8)
721
Costs and expenses(9)
(1,101)
Other impairments (recoveries), net
(244)
Net income (loss)
$
428
Projected SS Cash NOI Changed for the full year 2021
Life Science
Medical Office
CCRC
Total
Low
5.25
%
2.00
%
(30.00)
%
2.25
%
High
6.25
%
3.00
%
(15.00)
%
3.75
%
______________________________________
(1)The foregoing projections reflect management's view of current and future market conditions as of August 3, 2021 including assumptions with respect to rental rates, occupancy levels, development items, and the earnings impact of the events referenced in our earnings press release for the quarter ended June 30, 2021 that was issued on August 3, 2021. However, these projections do not reflect the impact of unannounced future transactions, except as described herein, other impairments or recoveries, the future bankruptcy or insolvency of our operators, lessees, borrowers or other obligors, the effect of any future restructuring of our contractual relationships with such entities, gains or losses on marketable securities, ineffectiveness related to our cash flow hedges, or larger than expected litigation settlements and expenses related to existing or future litigation matters. Our actual results may differ materially from the projections set forth above. The aforementioned ranges represent management's best estimates based upon the underlying assumptions as of August 3, 2021. Except as otherwise required by law, management assumes no, and hereby disclaims any, obligation to update any of the foregoing projections as a result of new information or new or future developments.
(2)May not foot, cross foot, or recalculate due to rounding and adjustments made to SS high and low ranges reported by segments.
(3)The 13 CCRCs operated by LCS are not included in the 2021 full year SS pools, however, are included in Portfolio Cash NOI with the low of $70 million and high of $90 million.
(4)Portfolio Cash NOI for Other represents the Company's share of its unconsolidated investment in SWF SH JV portfolio, with the low of $10 million and the high of $20 million.
(5)Represents rental and related revenues, tenant recoveries, resident fees and services, and other income from DFLs, less property level operating expenses, including our share of joint ventures.
(6)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, the deferral of community fees, net of amortization, management contract termination expense, actuarial reserves for insurance claims that have been incurred but not reported, and lease termination fees.
(7)Represents non-SS NOI and non-cash adjustments to SS NOI.
(8)Represents interest income, gain (loss) on sales of real estate, net, other income (expense), net, income taxes benefit (expense), and equity income (loss) from unconsolidated joint ventures, excluding NOI.
(9)Represents interest expense, depreciation and amortization, general and administrative, transaction costs, and loss on debt extinguishments.
(10)The majority of the balance represents the anticipated write off of goodwill related to the disposition of NNN and SHOP portfolios.
11
Reconciliations
In thousands
Enterprise Gross Assets and Portfolio Investment
June 30, 2021
Life Science
Medical Office
CCRC
Other
Senior Housing Triple-net(1)
SHOP(1)
Corporate Non-segment
Total
Consolidated total assets(2)
$
6,653,771
$
4,395,974
$
2,102,175
$
840,097
$
15,091
$
149,737
$
175,525
$
14,332,370
Investments in and advances to unconsolidated JVs
(24,505)
(9,501)
(2,041)
(352,368)
—
—
—
(388,415)
Accumulated depreciation and amortization(3)
1,108,727
1,571,991
249,671
—
5,282
39,227
—
2,974,898
Consolidated Gross Assets
$
7,737,993
$
5,958,464
$
2,349,805
$
487,729
$
20,373
$
188,964
$
175,525
$
16,918,853
Healthpeak's share of unconsolidated JV gross assets
52,572
18,651
4,451
468,311
—
529
—
544,514
Enterprise Gross Assets
$
7,790,565
$
5,977,115
$
2,354,256
$
956,040
$
20,373
$
189,493
$
175,525
$
17,463,367
Land held for development
(126,459)
(3,252)
—
—
—
—
—
(129,711)
Fully depreciated real estate and intangibles
397,512
508,707
15,721
—
747
7,384
—
930,071
Non-real estate related assets(4)
(250,526)
(426,333)
(166,226)
(9,143)
(9,940)
(49,855)
(175,525)
(1,087,548)
Real estate intangible liabilities
(172,633)
(108,180)
—
—
—
—
—
(280,813)
Noncontrolling interests' share of consolidated JVs real estate and related intangibles
(3,804)
(387,629)
—
—
—
—
—
(391,433)
Portfolio Investment
$
7,634,655
$
5,560,428
$
2,203,751
$
946,897
$
11,180
$
147,022
$
—
$
16,503,933
______________________________________
(1)During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift and therefore, as of June 30, 2021, the assets meeting the held for sale criteria on or before June 30, 2021 are classified as assets held for sale on the Consolidated Balance Sheet as disclosed within the Earnings Release and Supplemental Report for the quarter ended June 30, 2021.
(2)Consolidated total assets represents total assets on the Consolidated Balance Sheet as of June 30, 2021 presented on page 8 within the Earnings Release and Supplemental Report for the quarter ended June 30, 2021.
(3)Accumulated depreciation and amortization includes accumulated depreciation for real estate, accumulated amortization for real estate related intangible assets, and accumulated amortization for right-of-use assets.
(4)Balance includes Cash and cash equivalents, Restricted cash, Loans receivable, net of reserves, Accounts receivable, net of allowance, Right-of-use asset, net, and Other assets, net.
12
Reconciliations
In thousands
Capital Expenditures
Six Months Ended
June 30, 2021
June 30, 2020
Total capital expenditures at share(1)
$
352,546
$
435,797
Less: AFFO capital expenditures at share(1)
(44,506)
(42,964)
Non AFFO capital expenditures at share
308,040
392,833
Adjustment for Healthpeak's share of unconsolidated JV
(8,515)
(9,985)
Adjustment for noncontrolling interests' share of consolidated JVs
707
977
Consolidated non AFFO capital expenditures
300,232
383,825
Decrease (Increase) in construction payable
(17,928)
8,111
Other
(475)
(706)
Development, redevelopment, and other major improvements of real estate(2)
$
281,829
$
391,230
AFFO capital expenditures at share(1)
$
44,506
$
42,964
Adjustment for Healthpeak's share of unconsolidated JV
(1,932)
(2,634)
Adjustment for noncontrolling interests' share of consolidated JVs
$
558
$
242
Leasing costs, tenant improvements, and recurring capital expenditures(2)
$
43,132
$
40,572
______________________________________
(1)Total capital expenditures at share and AFFO capital expenditures at share are presented inclusive of unconsolidated JVs and exclusive of noncontrolling interest within the Supplemental Reports for the six months period ended June 30, 2021 and 2020 on page 24 of their respective Earnings Release and Supplemental Reports for the periods then ended.
(2)Represents the financial statement lines items of Development, redevelopment, and other major improvements of real estate and Leasing costs, tenant improvements, and recurring capital expenditures as presented within the Consolidated Statement of Cash Flows for the six months ended June 20, 2021 and 2020.
.
13
Reconciliations
In thousands
Revenues(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Life Science
$
138,496
$
148,702
$
153,215
$
169,934
$
177,527
Medical Office
151,844
155,381
158,532
160,201
165,295
CCRC
113,926
115,031
115,757
116,128
117,308
Other
4,293
4,452
4,193
9,013
16,108
Senior Housing Triple-net
24,589
24,558
16,807
5,228
1,613
SHOP
155,292
149,615
144,173
72,998
30,273
Total revenues
$
588,440
$
597,739
$
592,677
$
533,502
$
508,124
Life Science
—
—
—
—
—
Medical Office
—
—
—
—
—
CCRC
11,871
1,761
2,566
1,310
87
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
2,209
392
12,774
3,232
428
Government grant income
$
14,080
$
2,153
$
15,340
$
4,542
$
515
Life Science
—
—
—
—
—
Medical Office
—
—
—
—
—
CCRC
—
—
—
—
—
Other
(4,230)
(4,443)
(4,192)
(9,013)
(16,108)
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Less: Interest income
$
(4,230)
$
(4,443)
$
(4,192)
$
(9,013)
$
(16,108)
Life Science
—
—
448
1,337
1,412
Medical Office
691
699
687
715
710
CCRC
4,781
4,295
4,669
4,488
2,415
Other
18,682
17,853
17,294
16,753
16,740
Senior Housing Triple-net
—
—
—
—
—
SHOP
6,002
5,947
4,625
875
252
Healthpeak's share of unconsolidated JVs real estate revenues
$
30,156
$
28,794
$
27,723
$
24,168
$
21,529
Life Science
—
—
—
—
—
Medical Office
—
—
—
—
—
CCRC
534
246
140
199
—
Other
270
49
40
227
583
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
61
—
—
Healthpeak's share of unconsolidated JVs government grant income
$
804
$
295
$
241
$
426
$
583
Life Science
(57)
(66)
(64)
(65)
(75)
Medical Office
(8,347)
(8,788)
(8,822)
(8,926)
(8,825)
CCRC
—
—
—
—
—
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
(504)
(459)
(134)
(52)
(18)
Noncontrolling interests' share of consolidated JVs real estate revenues
$
(8,908)
$
(9,313)
$
(9,020)
$
(9,043)
$
(8,918)
Continued
14
Reconciliations
In thousands
Revenues(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Life Science
$
—
$
—
$
—
$
—
$
—
Medical Office
—
—
—
—
—
CCRC
—
—
—
—
—
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
(14)
—
—
Noncontrolling interests' share of consolidated JVs government grant income
$
—
$
—
$
(14)
$
—
$
—
Life Science
138,439
148,636
153,599
171,206
178,863
Medical Office
144,188
147,292
150,397
151,990
157,181
CCRC
131,112
121,333
123,132
122,125
119,810
Other
19,015
17,911
17,335
16,980
17,323
Senior Housing Triple-net
24,589
24,558
16,807
5,228
1,613
SHOP
162,999
155,495
161,485
77,053
30,935
Portfolio Real Estate Revenues
$
620,342
$
615,225
$
622,755
$
544,582
$
505,725
Life Science
(2,793)
(8,343)
(4,757)
(11,819)
(12,374)
Medical Office
(1,113)
(2,371)
(3,003)
(2,556)
(2,643)
CCRC
(4)
22
(1)
8
14
Other
38
44
4
88
6
Senior Housing Triple-net
(20)
79
4,962
146
43
SHOP
69
(244)
20
42
31
Non-cash adjustments to Portfolio Real Estate Revenues
$
(3,823)
$
(10,813)
$
(2,775)
$
(14,091)
$
(14,923)
Life Science
135,646
140,293
148,842
159,387
166,489
Medical Office
143,075
144,921
147,394
149,434
154,538
CCRC
131,108
121,355
123,131
122,133
119,824
Other
19,053
17,955
17,339
17,068
17,329
Senior Housing Triple-net
24,569
24,637
21,769
5,374
1,656
SHOP
163,068
155,251
161,505
77,095
30,966
Portfolio Cash Real Estate Revenues
$
616,519
$
604,412
$
619,980
$
530,491
$
490,802
Life Science
2,793
8,343
4,757
11,819
12,374
Medical Office
1,113
2,371
3,003
2,556
2,643
CCRC
4
(22)
1
(8)
(14)
Other
(38)
(44)
(4)
(88)
(6)
Senior Housing Triple-net
20
(79)
(4,962)
(146)
(43)
SHOP
(69)
244
(20)
(42)
(31)
Non-cash adjustments to Portfolio Real Estate Revenues
$
3,823
$
10,813
$
2,775
$
14,091
$
14,923
Life Science
(25,291)
(30,138)
(40,493)
(52,376)
(55,899)
Medical Office
(18,182)
(16,648)
(20,735)
(21,390)
(25,595)
CCRC
(5,314)
(4,542)
(4,809)
(4,687)
(2,415)
Other
(19,015)
(17,911)
(17,335)
(16,980)
(17,323)
Senior Housing Triple-net
(24,589)
(24,558)
(16,807)
(5,228)
(1,613)
SHOP
(162,999)
(155,495)
(161,485)
(77,053)
(30,935)
Non-SS Portfolio Real Estate Revenues
$
(255,390)
$
(249,292)
$
(261,664)
$
(177,714)
$
(133,780)
Continued
15
Reconciliations
In thousands
Revenues(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Life Science
$
113,148
$
118,498
$
113,106
$
118,830
$
122,964
Medical Office
126,007
130,644
129,662
130,600
131,586
CCRC
125,797
116,792
118,323
117,438
117,395
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Portfolio Real Estate Revenue - SS
$
364,952
$
365,934
$
361,091
$
366,868
$
371,945
Life Science
(2,163)
(4,979)
133
(4,204)
(4,855)
Medical Office
(1,599)
(2,677)
(2,194)
(2,291)
(1,801)
CCRC
—
—
—
—
—
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Non-cash adjustment to SS Portfolio Real Estate Revenues
$
(3,762)
$
(7,656)
$
(2,061)
$
(6,495)
$
(6,656)
Life Science
110,985
113,519
113,239
114,626
118,109
Medical Office
124,408
127,967
127,468
128,309
129,785
CCRC
125,797
116,792
118,323
117,438
117,395
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Portfolio Cash Real Estate Revenues - SS(2)
$
361,190
$
358,278
$
359,030
$
360,373
$
365,289
______________________________________
(1)In December 2020, as a result of a change in how operating results are reported to the Company's chief operating decision makers, the Company’s hospitals were reclassified from other non-reportable segments to the medical office segment and the Company’s one remaining unconsolidated investment in a senior housing joint venture was reclassified from the SHOP segment to other non-reportable segments. All prior period segment information has been recast to conform to the current period presentation.
(2)During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift that has and will have a major effect on the Company’s operations and financial results. Therefore, Senior Housing Triple-net and SHOP assets meeting the held for sale criteria on or before June 30, 2021 are classified as discontinued operations in all periods presented herein. Additional information regarding discontinued operations can be found at Note 5: Disposition of Real Estate and Discontinued Operations within the Quarterly Report on Form 10-Q and page 40, Discontinued Operations Reconciliation, of the Earnings Release and Supplemental Report for the quarter ended June 30, 2021.
16
Reconciliations
In thousands
Operating Expenses(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Life Science
$
34,205
$
36,714
$
36,885
$
39,461
$
40,724
Medical Office
49,355
51,436
52,523
51,121
54,648
CCRC
94,248
94,992
94,806
91,179
94,760
Other
—
—
—
—
—
Senior Housing Triple-net
526
421
453
294
288
SHOP
137,507
130,729
141,953
71,225
33,358
Operating expenses
$
315,841
$
314,292
$
326,620
$
253,280
$
223,778
Life Science
—
—
137
425
428
Medical Office
276
296
282
294
317
CCRC
4,826
4,797
4,465
4,745
2,208
Other
13,681
13,485
13,335
12,595
12,451
Senior Housing Triple-net
—
—
—
—
—
SHOP
5,005
4,795
3,830
1,026
368
Healthpeak's share of unconsolidated JVs operating expenses
$
23,788
$
23,373
$
22,049
$
19,085
$
15,772
Life Science
(18)
(18)
(19)
(20)
(21)
Medical Office
(2,507)
(2,630)
(2,545)
(2,504)
(2,552)
CCRC
—
—
—
—
—
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
(411)
(361)
(112)
(49)
(16)
Noncontrolling interests' share of consolidated JVs operating expenses
$
(2,936)
$
(3,009)
$
(2,676)
$
(2,573)
$
(2,589)
Life Science
34,187
36,696
37,003
39,866
41,131
Medical Office
47,124
49,102
50,260
48,911
52,413
CCRC
99,074
99,789
99,271
95,924
96,968
Other
13,681
13,485
13,335
12,595
12,451
Senior Housing Triple-net
526
421
453
294
288
SHOP
142,101
135,163
145,671
72,202
33,710
Portfolio Operating Expenses
$
336,693
$
334,656
$
345,993
$
269,792
$
236,961
Life Science
(14)
(13)
(13)
(9)
(9)
Medical Office
(648)
(642)
(647)
(633)
(639)
CCRC
(22)
(1,662)
(3,810)
(12)
(1,212)
Other
(61)
(19)
(313)
(24)
33
Senior Housing Triple-net
(61)
(14)
(14)
(4)
—
SHOP
50
1,047
(14,650)
(3,371)
(813)
Non-cash adjustments to Portfolio Operating Expenses
$
(756)
$
(1,303)
$
(19,447)
$
(4,053)
$
(2,640)
Life Science
34,173
36,683
36,990
39,857
41,122
Medical Office
46,476
48,460
49,613
48,278
51,774
CCRC
99,052
98,127
95,461
95,912
95,756
Other
13,620
13,466
13,022
12,571
12,484
Senior Housing Triple-net
465
407
439
290
288
SHOP
142,151
136,210
131,021
68,831
32,897
Portfolio Cash Operating Expenses
$
335,937
$
333,353
$
326,546
$
265,739
$
234,321
Continued
17
Reconciliations
In thousands
Operating Expenses(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Life Science
$
14
$
13
$
13
$
9
$
9
Medical Office
648
642
647
633
639
CCRC
22
1,662
3,810
12
1,212
Other
61
19
313
24
(33)
Senior Housing Triple-net
61
14
14
4
—
SHOP
(50)
(1,047)
14,650
3,371
813
Non-cash adjustments to Portfolio Operating Expenses
$
756
$
1,303
$
19,447
$
4,053
$
2,640
Life Science
(7,391)
(7,840)
(8,933)
(12,526)
(13,468)
Medical Office
(6,239)
(6,322)
(7,319)
(7,181)
(9,641)
CCRC
(4,826)
(4,798)
(4,463)
(5,495)
(2,602)
Other
(13,681)
(13,485)
(13,335)
(12,595)
(12,451)
Senior Housing Triple-net
(526)
(421)
(453)
(294)
(288)
SHOP
(142,101)
(135,163)
(145,671)
(72,202)
(33,710)
Non-SS Portfolio Operating Expenses
$
(174,764)
$
(168,029)
$
(180,174)
$
(110,293)
$
(72,160)
Life Science
26,795
28,856
28,070
27,340
27,663
Medical Office
40,885
42,780
42,941
41,730
42,772
CCRC
94,248
94,991
94,808
90,429
94,366
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Portfolio Operating Expenses - SS
$
161,928
$
166,627
$
165,819
$
159,499
$
164,801
Life Science
(13)
(13)
(13)
(9)
(9)
Medical Office
(624)
(621)
(616)
(609)
(610)
CCRC
—
(1,676)
(3,800)
—
(1,209)
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Non-cash adjustment to SS Portfolio Operating Expenses
$
(637)
$
(2,310)
$
(4,429)
$
(618)
$
(1,828)
Life Science
26,782
28,843
28,057
27,331
27,654
Medical Office
40,261
42,159
42,325
41,121
42,162
CCRC
94,248
93,315
91,008
90,429
93,157
Other
—
—
—
—
—
Senior Housing Triple-net
—
—
—
—
—
SHOP
—
—
—
—
—
Portfolio Cash Operating Expenses - SS
$
161,291
$
164,317
$
161,390
$
158,881
$
162,973
______________________________________
(1)In December 2020, as a result of a change in how operating results are reported to the Company's chief operating decision makers, the Company’s hospitals were reclassified from other non-reportable segments to the medical office segment and the Company’s one remaining unconsolidated investment in a senior housing joint venture was reclassified from the SHOP segment to other non-reportable segments. All prior period segment information has been recast to conform to the current period presentation.
(2)During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift that has and will have a major effect on the Company’s operations and financial results. Therefore, Senior Housing Triple-net and SHOP assets meeting the held for sale criteria on or before June 30, 2021 are classified as discontinued operations in all periods presented herein. Additional information regarding discontinued operations can be found at Note 5: Disposition of Real Estate and Discontinued Operations within the Quarterly Report on Form 10-Q and page 40, Discontinued Operations Reconciliation, of the Earnings Release and Supplemental Report for the quarter ended June 30, 2021.
18
Reconciliations
In thousands
Revenues(1)
Operating Expenses(1)
Six Months Ended June 30, 2021
Six Months Ended June 30, 2021
Life Science
$
347,461
Life Science
$
80,185
Medical Office
325,496
Medical Office
105,769
CCRC
233,436
CCRC
185,939
Other
25,121
Other
—
Senior Housing Triple-net
6,841
Senior Housing Triple-net
582
SHOP
103,270
SHOP
104,583
Total revenues
$
1,041,625
Operating expenses
$
477,058
Life Science
—
Life Science
853
Medical Office
—
Medical Office
611
CCRC
1,397
CCRC
6,953
Other
—
Other
25,046
Senior Housing Triple-net
—
Senior Housing Triple-net
—
SHOP
3,660
SHOP
1,394
Government grant income
$
5,057
Healthpeak's share of unconsolidated JVs operating expenses
$
34,857
Life Science
—
Life Science
(41)
Medical Office
—
Medical Office
(5,056)
CCRC
—
CCRC
—
Other
(25,121)
Other
—
Senior Housing Triple-net
—
Senior Housing Triple-net
—
SHOP
—
SHOP
(65)
Less: Interest income
$
(25,121)
Noncontrolling interests' share of consolidated JVs operating expenses
$
(5,162)
Life Science
2,749
Life Science
80,997
Medical Office
1,425
Medical Office
101,324
CCRC
6,903
CCRC
192,892
Other
33,493
Other
25,046
Senior Housing Triple-net
—
Senior Housing Triple-net
582
SHOP
1,127
SHOP
105,912
Healthpeak's share of unconsolidated JVs real estate revenues
$
45,697
Portfolio Operating Expenses
$
506,753
Life Science
—
Life Science
(18)
Medical Office
—
Medical Office
(1,273)
CCRC
199
CCRC
(1,224)
Other
810
Other
9
Senior Housing Triple-net
—
Senior Housing Triple-net
(4)
SHOP
—
SHOP
(4,184)
Healthpeak's share of unconsolidated JVs government grant income
$
1,009
Non-cash adjustments to Portfolio Operating Expenses
$
(6,694)
Life Science
(140)
Life Science
80,979
Medical Office
(17,751)
Medical Office
100,051
CCRC
—
CCRC
191,668
Other
—
Other
25,055
Senior Housing Triple-net
—
Senior Housing Triple-net
578
SHOP
(70)
SHOP
101,728
Noncontrolling interests' share of consolidated JVs real estate revenues
$
(17,961)
Portfolio Cash Operating Expenses
$
500,059
19
Reconciliations
In thousands
Six Months Ended June 30, 2021
Six Months Ended June 30, 2021
Life Science
350,070
Life Science
$
18
Medical Office
309,170
Medical Office
1,273
CCRC
241,935
CCRC
1,224
Other
34,303
Other
(9)
Senior Housing Triple-net
6,841
Senior Housing Triple-net
4
SHOP
107,987
SHOP
4,184
Portfolio Real Estate Revenues
$
1,050,306
Non-cash Portfolio Cash Operating Expenses
$
6,694
Life Science
(24,195)
Life Science
(27,029)
Medical Office
(5,198)
Medical Office
(16,822)
CCRC
22
CCRC
(166,484)
Other
95
Other
(25,046)
Senior Housing Triple-net
189
Senior Housing Triple-net
(582)
SHOP
74
SHOP
(105,912)
Non-cash adjustments to Portfolio Real Estate Revenues
$
(29,013)
Non-SS Portfolio Operating Expenses
$
(341,875)
Life Science
325,875
Life Science
53,968
Medical Office
303,972
Medical Office
84,502
CCRC
241,957
CCRC
26,408
Other
34,398
Other
—
Senior Housing Triple-net
7,030
Senior Housing Triple-net
—
SHOP
108,061
SHOP
—
Portfolio Cash Real Estate Revenues
$
1,021,293
Portfolio Operating Expenses - SS(2)
$
164,878
Life Science
24,195
Life Science
(19)
Medical Office
5,198
Medical Office
(1,219)
CCRC
(22)
CCRC
—
Other
(95)
Other
—
Senior Housing Triple-net
(189)
Senior Housing Triple-net
—
SHOP
(74)
SHOP
—
Non-cash adjustments to Portfolio Real Estate Revenues
$
29,013
Non-cash adjustment to SS Portfolio Operating Expenses
$
(1,238)
Life Science
(112,693)
Life Science
53,949
Medical Office
(46,984)
Medical Office
83,283
CCRC
(205,208)
CCRC
26,408
Other
(34,303)
Other
—
Senior Housing Triple-net
(6,841)
Senior Housing Triple-net
—
SHOP
(107,987)
SHOP
—
Non-SS Portfolio Real Estate Revenue
$
(514,016)
Portfolio Cash Operating Expenses - SS(2)
$
163,640
Life Science
$
237,377
Medical Office
262,186
CCRC
36,727
Other
—
Senior Housing Triple-net
—
SHOP
—
Portfolio Real Estate Revenue - SS(2)
$
536,290
20
Reconciliations
In thousands
Six Months Ended June 30, 2021
Life Science
(8,653)
Medical Office
(4,092)
CCRC
—
Other
—
Senior Housing Triple-net
—
SHOP
—
Non-cash adjustment to SS Portfolio Real Estate Revenues
$
(12,745)
Life Science
228,724
Medical Office
258,094
CCRC
36,727
Other
—
Senior Housing Triple-net
—
SHOP
—
Portfolio Cash Real Estate Revenues - SS(2)
$
523,545
______________________________________
(1)During 2020, the Company began the process of disposing of its senior housing triple-net and SHOP portfolios. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift and therefore, the assets are classified as discontinued operations in all periods presented within the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. Additional information regarding discontinued operations can be found at Note 5: Disposition of Real Estate and Discontinued Operations within the Quarterly Report for the quarter ended June 30, 2021, including total revenues and operating expenses. Those amounts combined with Consolidated Statement of Operations supply the totals needed for the reconciliation of Revenue and Operating Expenses for the quarter ended June 30, 2021.
(2)The property count used for Portfolio Real Estate Revenue - SS, Portfolio Cash Real Estate Revenues - SS, Portfolio Operating Expenses - SS, and Portfolio Cash Operating Expenses - SS differed for the three and six months ended June 30, 2021.
21
Reconciliations
In thousands
EBITDAre and Adjusted EBITDAre
Three Months Ended June 30, 2021
Net income (loss)
$
282,025
Interest expense(1)
39,858
Income tax expense (benefit)(1)
(1,065)
Depreciation and amortization(1)
171,459
Other depreciation and amortization
1,155
Loss (gain) on sales of real estate(1)
(297,476)
Impairments (recoveries) of depreciable real estate
3,743
Share of unconsolidated JV:
Interest expense
221
Income tax expense (benefit)
(481)
Depreciation and amortization
2,869
Gain on sale of real estate from unconsolidated JVs
(5,866)
EBITDAre
$
196,442
Transaction-related items, excluding taxes
1,080
Other impairments (recoveries) and losses (gains)(2)
(1)Amount can be reconciled by combining the balances from the corresponding line of the Consolidated Statements of Operations and Discontinued Operations Reconciliation provided on pages 9 and 40, respectively, in the Earnings Release and Supplemental Report for the quarter ended June 30, 2021.
(2)For the three months ended June 30, 2021, includes the following: (i) a $7 million goodwill impairment charge in connection with our senior housing triple-net asset sales reported in income (loss) from discontinued operations in the Consolidated Statements of Operations and (ii) $1 million of reserves for loan losses recorded in impairments and loan loss reserves (recoveries), net in the Consolidated Statements of Operations, offset by (iii) $6 million of accelerated recognition of a mark-to-market discount, less loan fees, resulting from prepayments on loans receivable which is included in interest income in the Consolidated Statements of Operations.
22
Reconciliations
In thousands
Enterprise Debt and Net Debt
June 30, 2021
Bank line of credit and commercial paper
$
720,000
Term loan
249,303
Senior unsecured notes
3,710,972
Mortgage debt(1)
395,170
Consolidated Debt
$
5,075,445
Share of unconsolidated JV mortgage debt
30,573
Enterprise Debt
$
5,106,018
Cash and cash equivalents(2)
(114,277)
Share of unconsolidated JV cash and cash equivalents
(15,479)
Net Debt
$
4,976,262
Financial Leverage
June 30, 2021
Enterprise Debt
$
5,106,018
Enterprise Gross Assets
17,463,367
Financial Leverage
29.2%
Secured Debt Ratio(1)
June 30, 2021
Mortgage debt(1)
$
395,170
Share of unconsolidated JV mortgage debt
30,573
Enterprise Secured Debt
$
425,743
Enterprise Gross Assets
17,463,367
Secured Debt Ratio
2.4%
Net Debt to Adjusted EBITDAre
Three Months Ended June 30, 2021
Net Debt
$
4,976,262
Annualized Adjusted EBITDAre
1,076,216
(3)
Net Debt to Adjusted EBITDAre
4.6x
(4)
______________________________________
(1)Includes mortgage debt of $37 million on an asset held for sale.
(2)Includes cash and cash equivalents of $17.4 million on assets held for sale.
(3)Represents the current quarter Adjusted EBIDTAre multiplied by a factor of four.
(4)Net Debt to Adjusted EBITDAre including $87 million of restricted cash held by a qualified intermediary in conjunction with an Internal Revenue Code Section 1031 exchange would be 4.5x.
23
Reconciliations
In thousands
Segment Portfolio NOI and Cash (Adjusted) NOI, Portfolio Income, and SS
Total Portfolio(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
55,049
$
(59,581)
$
150,246
$
149,423
$
282,025
Interest income
(4,230)
(4,443)
(4,192)
(9,013)
(16,108)
Interest expense
57,550
56,235
56,713
49,519
39,858
Depreciation and amortization
178,488
173,630
155,749
157,538
171,459
General and administrative
23,720
21,661
25,507
24,902
24,088
Transaction costs
627
2,586
20,708
874
619
Loss (gain) on sales of real estate, net
(82,863)
(149)
(302,613)
(259,662)
(297,476)
Impairments and loan loss reserves (recoveries), net
24,050
34,550
146,530
3,242
11,926
Other expense (income), net
(19,586)
(7,060)
(2,905)
(8,085)
(1,861)
Loss (gain) on debt extinguishments
25,824
17,921
—
164,292
60,865
Income tax expense (benefit)
(7,346)
24,174
(3,120)
(813)
(1,065)
Government grant income
14,080
2,153
15,340
4,542
515
Equity loss (income) from unconsolidated JVs
17,086
19,480
19,242
(1,008)
(6,092)
Healthpeak's share of unconsolidated JVs NOI
7,172
5,716
5,915
5,509
6,340
Noncontrolling interests' share of consolidated JVs NOI
(5,972)
(6,304)
(6,358)
(6,470)
(6,329)
Portfolio NOI
$
283,649
$
280,569
$
276,762
$
274,790
$
268,764
Adjustment to Portfolio NOI
(3,067)
(9,510)
16,672
(10,038)
(12,283)
Portfolio Cash (Adjusted) NOI
$
280,582
$
271,059
$
293,434
$
264,752
$
256,481
Interest income
4,230
4,443
4,192
9,013
16,108
Portfolio Income
$
284,812
$
275,502
$
297,626
$
273,765
$
272,589
Interest income
(4,230)
(4,443)
(4,192)
(9,013)
(16,108)
Adjustment to Portfolio NOI
3,067
9,510
(16,672)
10,038
12,283
Non-SS Portfolio NOI
(80,626)
(81,260)
(81,491)
(67,423)
(61,620)
SS Portfolio NOI
$
203,023
$
199,309
$
195,271
$
207,367
$
207,144
Non-cash adjustment to SS Portfolio NOI
(3,124)
(5,348)
2,369
(5,875)
(4,828)
SS Portfolio Cash (Adjusted) NOI
$
199,899
$
193,961
$
197,640
$
201,492
$
202,316
24
Reconciliations
In thousands
Life Science(1)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
51,874
$
54,682
$
43,225
$
61,816
$
59,960
Interest expense
60
57
55
102
48
Depreciation and amortization
52,356
57,170
58,184
68,434
76,955
Transaction costs
1
79
155
32
(21)
Impairments and loan loss (reserves) recoveries, net
—
—
14,671
—
—
Other expense (income), net
—
—
—
(4)
(28)
Equity loss (income) from unconsolidated JVs
—
—
40
93
(111)
Healthpeak's share of unconsolidated JVs NOI
—
—
311
912
984
Noncontrolling interests' share of consolidated JVs NOI
(39)
(48)
(45)
(45)
(54)
Portfolio NOI
$
104,252
$
111,940
$
116,596
$
131,340
$
137,733
Adjustment to Portfolio NOI
(2,779)
(8,330)
(4,744)
(11,810)
(12,366)
Portfolio Cash (Adjusted) NOI(3)
$
101,473
$
103,610
$
111,852
$
119,530
$
125,367
Adjustment to Portfolio NOI
2,779
8,330
4,744
11,810
12,366
Non-SS Portfolio NOI
(17,900)
(22,297)
(31,562)
(39,850)
(42,432)
SS Portfolio NOI
$
86,352
$
89,643
$
85,034
$
91,490
$
95,301
Non-cash adjustment to SS Portfolio NOI
(2,149)
(4,967)
148
(4,195)
(4,845)
SS Portfolio Cash (Adjusted) NOI
$
84,203
$
84,676
$
85,182
$
87,295
$
90,456
Medical Office(1)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
125,860
$
50,425
$
49,741
$
48,614
$
221,725
Interest expense
100
100
98
95
786
Depreciation and amortization
55,904
54,693
56,902
57,954
63,371
Transaction costs
—
—
—
330
(35)
Impairments and loan loss (reserves) recoveries, net
2,119
1,208
4,175
—
—
Loss (gain) on sales of real estate, net
(81,284)
(2,283)
(4,714)
—
(175,238)
Other expense (income), net
—
—
—
2,279
175
Equity loss (income) from unconsolidated JVs
(210)
(198)
(193)
(192)
(137)
Healthpeak's share of unconsolidated JVs NOI
415
403
405
421
393
Noncontrolling interests' share of consolidated JVs NOI
(5,840)
(6,158)
(6,277)
(6,422)
(6,273)
Portfolio NOI
$
97,064
$
98,190
$
100,137
$
103,079
$
104,767
Adjustment to Portfolio NOI
(465)
(1,729)
(2,356)
(1,923)
(2,003)
Portfolio Cash (Adjusted) NOI(3)
$
96,599
$
96,461
$
97,781
$
101,156
$
102,764
Adjustment to Portfolio NOI
465
1,729
2,356
1,923
2,003
Non-SS Portfolio NOI
(11,942)
(10,326)
(13,416)
(14,210)
(15,953)
SS Portfolio NOI
$
85,122
$
87,864
$
86,721
$
88,869
$
88,814
Non-cash adjustment to SS Portfolio NOI
(975)
(2,056)
(1,578)
(1,681)
(1,192)
SS Portfolio Cash (Adjusted) NOI
$
84,147
$
85,808
$
85,143
$
87,188
$
87,622
25
Reconciliations
In thousands
CCRC(1)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
458
$
(10,366)
$
(14,644)
$
(6,375)
$
(10,362)
Interest expense
1,969
1,983
1,971
1,918
1,924
Depreciation and amortization
31,426
30,106
32,089
31,150
31,133
Transaction costs
368
1,897
1,256
432
657
Other expense (income), net
(14,142)
(3,903)
533
(2,176)
(165)
Government grant income
11,871
1,761
2,566
1,310
87
Equity loss (income) from unconsolidated JVs
(401)
322
(254)
—
(639)
Healthpeak's share of unconsolidated JVs NOI
489
(256)
344
(58)
207
Portfolio NOI
$
32,038
$
21,544
$
23,861
$
26,201
$
22,842
Adjustment to Portfolio NOI
18
1,684
3,809
20
1,226
Portfolio Cash (Adjusted) NOI(3)
$
32,056
$
23,228
$
27,670
$
26,221
$
24,068
Adjustment to Portfolio NOI
(18)
(1,684)
(3,809)
(20)
(1,226)
Non-SS Portfolio NOI
(489)
258
(345)
807
187
SS Portfolio NOI
$
31,549
$
21,802
$
23,516
$
27,008
$
23,029
Non-cash adjustment to SS Portfolio NOI
—
1,675
3,799
1
1,209
SS Portfolio Cash (Adjusted) NOI
$
31,549
$
23,477
$
27,315
$
27,009
$
24,238
Other(1)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
(18,780)
$
(11,198)
$
(23,090)
$
7,473
$
15,139
Interest income
(4,230)
(4,443)
(4,192)
(9,013)
(16,108)
Depreciation and amortization
5
2
—
—
—
Transaction costs
4
8
11
4
18
Impairments and loan loss (reserves) recoveries, net
4,718
(2,985)
7,896
3,242
931
Other expense (income), net
—
—
—
(482)
—
Equity loss (income) from unconsolidated JVs
18,346
18,625
19,376
(1,224)
20
Healthpeak's share of unconsolidated JVs NOI
5,271
4,417
3,999
4,385
4,872
Portfolio NOI
$
5,334
$
4,426
$
4,000
$
4,385
$
4,872
Adjustment to Portfolio NOI
99
63
317
112
(27)
Portfolio Cash (Adjusted) NOI
$
5,433
$
4,489
$
4,317
$
4,497
$
4,845
Interest income
4,230
4,443
4,192
9,013
16,108
Portfolio Income
$
9,663
$
8,932
$
8,509
$
13,510
$
20,953
Interest income
(4,230)
(4,443)
(4,192)
(9,013)
(16,108)
Adjustment to Portfolio NOI
(99)
(63)
(317)
(112)
27
Non-SS Portfolio NOI
(5,334)
(4,426)
(4,000)
(4,385)
(4,872)
SS Portfolio NOI
$
—
$
—
$
—
$
—
$
—
SS Portfolio Cash (Adjusted) NOI
$
—
$
—
$
—
$
—
$
—
26
Reconciliations
In thousands
Senior Housing Triple-net(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
15,808
$
5,301
$
256,292
$
207,741
$
16,257
Interest expense
72
45
112
—
—
Depreciation and amortization
7,175
6,694
4,051
—
—
Transaction costs
1
—
—
4
—
Impairments and loan loss (reserves) recoveries, net
1,007
12,097
—
—
7,252
Loss (gain) on sales of real estate, net
—
—
(244,101)
(202,455)
(22,174)
Other expense (income), net
—
—
—
(356)
(10)
Portfolio NOI
$
24,063
$
24,137
$
16,354
$
4,934
$
1,325
Adjustment to Portfolio NOI
41
93
4,976
150
43
Portfolio Cash (Adjusted) NOI(3)
$
24,104
$
24,230
$
21,330
$
5,084
$
1,368
Adjustment to Portfolio NOI
(41)
(93)
(4,976)
(150)
(43)
Non-SS Portfolio NOI
(24,063)
(24,137)
(16,354)
(4,934)
(1,325)
SS Portfolio NOI
$
—
$
—
$
—
$
—
$
—
SS Portfolio Cash (Adjusted) NOI
$
—
$
—
$
—
$
—
$
—
SHOP(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
(28,552)
$
(35,915)
$
(87,333)
$
61,446
$
97,401
Interest expense
2,655
2,455
2,514
2,676
1,177
Depreciation and amortization
31,622
24,965
4,523
—
—
Transaction costs
253
602
19,286
72
—
Impairments and loan loss (reserves) recoveries, net
16,206
24,230
119,788
—
3,743
Loss (gain) on sales of real estate, net
(1,579)
2,134
(53,798)
(57,207)
(100,064)
Other expense (income), net
(2,171)
(316)
(3,033)
(5,529)
(117)
Government grant income
2,209
392
12,774
3,232
428
Equity loss (income) from unconsolidated JVs
(649)
731
273
315
(5,225)
Healthpeak's share of unconsolidated JVs NOI
997
1,152
856
(151)
(116)
Noncontrolling interests' share of consolidated JVs NOI
(93)
(98)
(36)
(3)
(2)
Portfolio NOI
$
20,898
$
20,332
$
15,814
$
4,851
$
(2,775)
Adjustment to Portfolio NOI
19
(1,291)
14,670
3,413
844
Portfolio Cash (Adjusted) NOI(3)
$
20,917
$
19,041
$
30,484
$
8,264
$
(1,931)
Adjustment to Portfolio NOI
(19)
1,291
(14,670)
(3,413)
(844)
Non-SS Portfolio NOI
(20,898)
(20,332)
(15,814)
(4,851)
2,775
SS Portfolio NOI
$
—
$
—
$
—
$
—
$
—
SS Portfolio Cash (Adjusted) NOI
$
—
$
—
$
—
$
—
$
—
27
Reconciliations
In thousands
Corporate Non-Segment(1)(2)
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Net Income (loss)
$
(91,619)
$
(112,510)
$
(73,945)
$
(231,292)
$
(118,095)
Interest expense
52,694
51,595
51,963
44,728
35,923
General and administrative
23,720
21,661
25,507
24,902
24,088
Loss (gain) on debt extinguishments
25,824
17,921
—
164,292
60,865
Other expense (income), net
(3,273)
(2,841)
(405)
(1,817)
(1,716)
Income tax expense (benefit)
(7,346)
24,174
(3,120)
(813)
(1,065)
Portfolio NOI
$
—
$
—
$
—
$
—
$
—
______________________________________
(1)In December 2020, as a result of a change in how operating results are reported to the Company's chief operating decision makers, the Company’s hospitals were reclassified from other non-reportable segments to the medical office segment and the Company’s one remaining unconsolidated investment in a senior housing joint venture was reclassified from the SHOP segment to other non-reportable segments. All prior period segment information has been recast to conform to the current period presentation.
(2)During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift that has and will have a major effect on the Company’s operations and financial results. Therefore, Senior Housing Triple-net and SHOP assets meeting the held for sale criteria on or before June 30, 2021 are classified as discontinued operations in all periods presented herein. Additional information regarding discontinued operations can be found at Note 5: Disposition of Real Estate and Discontinued Operations within the Quarterly Report on Form 10-Q and page 40, Discontinued Operations Reconciliation, of the Earnings Release and Supplemental Report for the quarter ended June 30, 2021. .
(3)Portfolio Income and Portfolio Cash (Adjusted) NOI are the same for Life Science, Medical Office, CCRC, Senior Housing Triple-net, and SHOP for all periods presented as there is no interest income for the segments.
28
Reconciliations
In thousands
Segment Portfolio NOI and Cash (Adjusted) NOI, Portfolio Income, and SS
For the six months ended June 30, 2021
Life Science
Medical Office
CCRC
Other
Senior Housing Triple-Net
SHOP
Corporate Non-segment
Total
Net Income (loss)
$
121,778
$
270,337
$
(16,738)
$
22,614
$
223,998
$
158,846
$
(349,387)
$
431,448
Interest income
—
—
—
(25,121)
—
—
—
(25,121)
Interest expense
150
881
3,842
—
—
3,853
80,651
89,377
Depreciation and amortization
145,388
121,326
62,283
—
—
—
—
328,997
General and administrative
—
—
—
—
—
—
48,990
48,990
Transaction costs
11
295
1,090
21
4
72
—
1,493
Impairments and loan loss (reserves) recoveries, net
—
—
—
4,173
7,252
3,743
—
15,168
Loss (gain) on sales of real estate, net
—
(175,238)
—
—
(224,629)
(157,271)
—
(557,138)
Loss on debt extinguishments
—
—
—
—
—
—
225,157
225,157
Other expense (income), net
(33)
2,454
(2,341)
(482)
(366)
(5,646)
(3,532)
(9,946)
Income tax expense (benefit)
—
—
—
—
—
—
(1,879)
(1,879)
Government grant income
—
—
1,397
—
—
3,660
—
5,057
Healthpeak's share of unconsolidated joint venture NOI
1,896
814
149
9,257
—
(268)
—
11,848
Noncontrolling interests' share of consolidated joint venture NOI
(99)
(12,695)
—
—
—
(5)
—
(12,799)
Equity loss (income) from unconsolidated JVs
(18)
(328)
(639)
(1,205)
—
(4,910)
—
(7,100)
Portfolio NOI
$
269,073
$
207,846
$
49,043
$
9,257
$
6,259
$
2,074
$
—
$
543,552
Adjustment to NOI
(24,176)
(3,926)
1,246
85
193
4,259
—
(22,319)
Portfolio Cash NOI
$
244,897
$
203,920
$
50,289
$
9,342
$
6,452
$
6,333
$
—
$
521,233
Interest Income
—
—
—
25,121
—
—
—
25,121
Portfolio Income
$
244,897
$
203,920
$
50,289
$
34,463
$
6,452
$
6,333
$
—
$
546,354
Interest income
—
—
—
(25,121)
—
—
(25,121)
Adjustment to NOI
24,176
3,926
(1,246)
(85)
(193)
(4,259)
—
22,319
Non-SS Portfolio NOI
(85,664)
(30,162)
(38,724)
(9,257)
(6,259)
(2,074)
—
(172,140)
SS Portfolio NOI
$
183,409
$
177,684
$
10,319
$
—
$
—
$
—
$
—
$
371,412
Non-cash adjustment to SS Portfolio NOI
(8,635)
(2,873)
—
—
—
—
—
(11,508)
SS Portfolio Cash NOI
$
174,774
$
174,811
$
10,319
$
—
$
—
$
—
$
—
$
359,904
29
Reconciliations
In thousands
For the six months ended June 30, 2020
Life Science
Medical Office
CCRC
Other
Senior Housing Triple-Net
SHOP
Corporate Non-segment
Total
Net Income (loss)
$
100,283
$
176,637
$
68,201
$
8,679
$
200,569
$
(81,081)
$
(135,699)
$
337,589
Interest income
—
—
—
(7,918)
—
—
—
(7,918)
Interest expense
122
203
3,273
—
154
5,258
106,916
115,926
Depreciation and amortization
102,567
110,571
51,655
10
14,335
88,626
—
367,764
General and administrative
—
—
—
—
—
—
46,069
46,069
Transaction costs
1
—
14,842
93
—
539
—
15,475
Impairments and loan loss (reserves) recoveries, net
—
4,825
—
13,119
5,677
39,552
—
63,173
Loss (gain) on sales of real estate, net
—
(83,393)
—
40
(164,043)
(336)
—
(247,732)
Loss on debt extinguishments
—
—
—
—
—
—
24,991
24,991
Other expense (income), net
—
—
(184,474)
(41,707)
—
(2,126)
(1,887)
(230,194)
Income tax expense (benefit)
—
—
—
—
—
—
(40,390)
(40,390)
Government grant income
—
—
11,871
—
—
2,209
—
14,080
Healthpeak's share of unconsolidated joint venture NOI
—
835
4,099
12,187
—
1,978
—
19,099
Noncontrolling interests' share of consolidated joint venture NOI
(74)
(11,880)
—
—
—
(254)
—
(12,208)
Equity loss (income) from unconsolidated JVs
—
(407)
1,479
27,809
—
184
—
29,065
Portfolio NOI
$
202,899
$
197,391
$
(29,054)
$
12,312
$
56,692
$
54,549
$
—
$
494,789
Adjustment to NOI
(7,059)
(1,459)
91,579
52
(3,334)
595
—
80,374
Portfolio Cash NOI
$
195,840
$
195,932
$
62,525
$
12,364
$
53,358
$
55,144
$
—
$
575,163
Interest Income
—
—
—
7,918
—
—
—
7,918
Portfolio Income
$
195,840
$
195,932
$
62,525
$
20,282
$
53,358
$
55,144
$
—
$
583,081
Interest income
—
—
—
(7,918)
—
—
(7,918)
Adjustment to NOI
7,059
1,459
(91,579)
(52)
3,334
(595)
—
(80,374)
Non-SS Portfolio NOI
(34,215)
(25,438)
41,781
(12,312)
(56,692)
(54,549)
—
(141,425)
SS Portfolio NOI
$
168,684
$
171,953
$
12,727
$
—
$
—
$
—
$
—
$
353,364
Non-cash adjustment to SS Portfolio NOI
(6,690)
(2,421)
—
—
—
—
—
(9,111)
SS Portfolio Cash NOI
$
161,994
$
169,532
$
12,727
$
—
$
—
$
—
$
—
$
344,253
____________________________________
(1)In December 2020, as a result of a change in how operating results are reported to the Company's chief operating decision makers, the Company’s hospitals were reclassified from other non-reportable segments to the medical office segment and the Company’s one remaining unconsolidated investment in a senior housing joint venture was reclassified from the SHOP segment to other non-reportable segments. All prior period segment information has been recast to conform to the current period presentation.
(2)During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift that has and will have a major effect on the Company’s operations and financial results. Therefore, Senior Housing Triple-net and SHOP assets meeting the held for sale criteria on or before June 30, 2021 are classified as discontinued operations in all periods presented herein. Additional information regarding discontinued operations can be found at Note 5: Disposition of Real Estate and Discontinued Operations within the Quarterly Report on Form 10-Q and page 40, Discontinued Operations Reconciliation, of the Earnings Release and Supplemental Report for the quarter ended June 30, 2021.
30
Reconciliations
In thousands
CCRC Pro Forma Portfolio Real Estate Revenues, Operating Expenses, and NOI(1)
Pro Forma Portfolio Real Estate Revenues
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Portfolio Real Estate Revenues - SS(2)
$
125,797
$
116,793
$
118,323
$
117,437
$
117,395
Pro forma adjustments to exclude government grant income
(11,871)
(1,761)
(2,566)
(1,310)
(87)
Pro forma Portfolio Real Estate Revenues - SS(3)
$
113,926
$
115,031
$
115,757
$
116,128
$
117,308
Operating Expenses
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Portfolio Operating Expenses - SS4)
$
94,248
$
94,991
$
94,808
$
90,429
$
94,366
Portfolio Cash Operating Expenses - SS(4)
$
94,248
$
93,315
$
91,007
$
90,429
$
93,157
Pro Forma SS Portfolio NOI
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
SS Portfolio NOI(5)
$
31,549
$
21,802
$
23,515
$
27,008
$
23,029
Pro forma adjustment to exclude government grants
(11,871)
(1,761)
(2,566)
(1,310)
(87)
Pro forma SS Portfolio NOI(3)
$
19,678
$
20,040
$
20,950
$
25,699
$
22,942
Pro Forma SS Portfolio Cash (Adjusted) NOI
Three Months Ended
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
SS Portfolio Cash (Adjusted) NOI(5)
$
31,549
$
23,477
$
27,315
$
27,009
$
24,238
Pro forma adjustment to exclude government grants
(11,871)
(1,761)
(2,566)
(1,310)
(87)
Pro forma SS Portfolio Cash (Adjusted) NOI(3)
$
19,678
$
21,716
$
24,750
$
25,699
$
24,151
______________________________________
(1)May not foot due to rounding.
(2)See page 14 of this document for a reconciliation of Portfolio Cash Real Estate Revenues - SS.
(3)Pro forma adjustments excludes government grants under the CARES Act for Portfolio Real Estate Revenues.
(4)See page 17 of this document for a reconciliation of Portfolio Operating Expenses - SS and Portfolio Cash Operating Expenses - SS.
(5)See page 24 of this document for a reconciliation of SS Portfolio NOI and SS Portfolio Cash (Adjusted) NOI.
31
Reconciliations
In thousands, except per month data
REVPOR CCRC(1)
Three Months Ended
CCRC
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Portfolio Cash Real Estate Revenues(2)
$
131,108
$
121,355
$
123,131
$
122,133
$
119,824
Other adjustments to REVPOR CCRC(3)
(5,311)
(4,563)
(4,808)
(4,696)
(2,429)
REVPOR CCRC revenues
$
125,797
$
116,793
$
118,323
$
117,437
$
117,395
Average occupied units/month
5,979
5,909
5,876
5,854
5,906
REVPOR CCRC per month(4)
$
7,014
$
6,589
$
6,712
$
6,687
$
6,626
Three Months Ended
SS REVPOR CCRC
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
SS REVPOR CCRC revenues(5)
$
125,797
$
116,793
$
118,323
$
117,437
$
117,395
SS average occupied units/month
5,979
5,909
5,876
5,854
5,906
SS REVPOR CCRC per month(4)
$
7,014
$
6,589
$
6,712
$
6,687
$
6,626
Three Months Ended
PRO FORMA SS REVPOR CCRC
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Pro Forma SS REVPOR CCRC revenues(6)
$
113,926
$
115,031
$
115,757
$
116,128
$
117,308
SS average occupied units/month
5,979
5,909
5,876
5,854
5,906
SS REVPOR CCRC per month(4)
$
6,352
$
6,490
$
6,567
$
6,612
$
6,621
______________________________________
(1)May not foot due to rounding.
(2)See page 14 of this document for a reconciliation of Portfolio Cash Real Estate Revenues.
(3)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.
(4)Represents the current quarter REVPOR CCRC divided by a factor of three.
(5)See page 14 of this document for a reconciliation of Portfolio Cash Real Estate Revenues - SS.
(6)See page 31 of this document for a reconciliation of Pro forma Portfolio Real Estate Revenues - SS which is the same as Pro Forma SS REVPOR CCRC revenues.
32
Reconciliations
In thousands, except per month data
REVPOR(1)
Three Months Ended
Other
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Portfolio Cash Real Estate Revenues(2)
$
19,053
$
17,955
$
17,339
$
17,068
$
17,330
Other adjustments to REVPOR Other(3)
(3,955)
(3,411)
(3,330)
(3,372)
(3,460)
REVPOR Other revenues
$
15,098
$
14,544
$
14,008
$
13,696
$
13,870
Average occupied units/month
1,260
1,213
1,172
1,109
1,104
REVPOR Other per month(4)
$
3,993
$
3,997
$
3,983
$
4,117
$
4,186
Three Months Ended
SHOP
June 30, 2021
Portfolio Cash Real Estate Revenues(2)
$
30,966
Other adjustments to REVPOR SHOP(5)
(24,960)
REVPOR SHOP revenues(6)
$
6,007
Average occupied units/month
316
REVPOR SHOP per month(4)
$
6,326
______________________________________
(1)May not foot due to rounding.
(2)See page 14 of this document for a reconciliation of Portfolio Cash Real Estate Revenues.
(3)Includes revenue for sold assets or assets in redevelopment.
(4)Represents the current quarter REVPOR Other, REVPOR SHOP, or REVPOR SHOP Stabilized - HFS divided by a factor of three.
(5)Includes revenue for facilities sold and assets in redevelopment.
(6)Includes revenue from properties that are held for sale for informational purposes.
