[October 28, 2016] |
|
Ventas Reports 2016 Third Quarter Results
Ventas, Inc. (NYSE: VTR) ("Ventas" or the "Company") today announced
strong earnings for the third quarter ended September 30, 2016, driven
by the Company's high-quality healthcare and senior living properties
and accretive investments:
-
Income from continuing operations per diluted common share for the
third quarter 2016 grew 223 percent to $0.42 compared to the same
period in 2015. The increase from the third quarter 2015 is
principally due to accretive investments, improved property
performance, and lower transaction costs.
-
Normalized Funds From Operations ("FFO") for the third quarter 2016
grew 5 percent to $1.03 per diluted common share on a comparable basis
("Comparable"), which adjusts all prior periods for the effects of the
successful spin off (the "Spin-Off") of Care Capital Properties, Inc.
("CCP") (NYSE: CCP) completed in August 2015.
-
Reported FFO per diluted common share, as defined by the National
Association of Real Estate Investment Trusts ("NAREIT FFO"), for the
third quarter 2016 grew 28 percent to $1.00 compared to the same
period in 2015.
Strong Quarter Demonstrates the Ventas Advantage
"We are delighted to report strong financial performance in the third
quarter, delivered by our excellent people, platforms and properties,"
said Chairman and Chief Executive Officer Debra A. Cafaro. "With
superior earnings growth, outstanding liquidity, financial strength,
terrific capital markets execution and disciplined capital allocation,
the Ventas team continues to deliver on our promise of producing
reliable growth and income from a high-quality diversified portfolio.
The completion of our acquisition of life science and innovation centers
leased by leading universities and our commitment to finance Ardent's
expansion and build an excellent hospital business further solidify our
position as the premier provider of capital at the intersection of
health care and real estate. We remain confident in our ability to
continue to drive shareholder value."
Third Quarter Portfolio Performance
Constant currency cash net operating income ("NOI") growth for the
Company's quarterly same-store total portfolio (1,184 assets) was 2.4
percent on a reported basis for the third quarter 2016. Reported
quarterly same-store results by segment follow:
-
The seniors housing operating portfolio ("SHOP") same-store cash NOI
grew 2.0 percent, fueled by growth in key markets.
-
The triple net leased portfolio same-store cash NOI grew 4.2 percent,
benefiting from lease escalations.
-
Medical office building ("MOB") portfolio same-store cash NOI grew 0.2
percent, in line with expectations.
Third Quarter & Other Highlights
-
In October 2016, the Company announced that it issued a commitment to
provide secured debt financing in the amount of $700 million to a
subsidiary of Ardent Health Services ("Ardent") in connection with
Ardent's agreement to acquire LHP Hospital Group. The transaction is
expected to be accretive and close in the first quarter of 2017,
pending customary regulatory reviews and approvals.
-
In September 2016, the Company completed its accretive acquisition of
institutional-quality life science and innovation centers managed by
Wexford Science & Technology, LLC ("Wexford") for total consideration
of $1.5 billion. The acquisition marks Ventas's entry into the
attractive life science sector with high-quality real estate leased by
top universities, academic medical centers and research companies and
includes a pipeline of attractive near-term development opportunities.
-
During and immediately following the quarter, to fund the Wexford
acquisition, Ventas raised over $900 million in aggregate gross
proceeds from the sale of common stock at an average gross price
exceeding $73 per share through a block equity offering and "at the
market" equity issuances. Year-to-date, total equity issuances have
totaled 18.9 million shares and $1.3 billion in aggregate gross
proceeds.
-
The Company issued $450 million of 3.25 percent 10-year senior notes
in September, which represented the most attractive 10-year bond
issuance in the Company's history.
-
During and immediately following the quarter, the Company sold real
estate assets and received final repayment on loans receivable for
aggregate proceeds of $197 million. Year-to-date, the Company has sold
14 properties and received final repayment on loans receivable for
aggregate proceeds of $272 million.
-
The Company's credit profile was excellent at quarter-end, including:
-
5.8x net debt to adjusted EBITDA ratio, consistent with the prior
quarter and a 0.3x improvement year-over-year;
-
39 percent total indebtedness to gross asset value, an improvement
of one percentage point from the prior quarter and three
percentage points year-over-year; and
-
4.7x fixed charge coverage, an improvement of 0.1x from the prior
quarter and 0.3x year-over-year.
-
The Company currently has an outstanding liquidity position, with $1.8
billion available under its revolving credit facility and $134 million
of cash or cash equivalents.
Collaborative Agreements with Sunrise
-
In September 2016, Ventas and Sunrise Senior Living ("Sunrise")
reached mutually beneficial agreements that strengthen the decade-long
relationship of the companies. These new arrangements provide Sunrise
and its onsite employees with long-term stability, reinforcing their
focus on caring for seniors, and align the companies behind profitable
growth. The agreements reduce management fees paid by Ventas to
Sunrise under existing management contracts, maintain the existing
term of the contracts and provide Sunrise with incentives for future
outperformance. Ventas and Sunrise have also entered into a new
multi-year development pipeline agreement that gives Ventas the option
to fund certain future Sunrise developments.
Continued Leadership Excellence
-
Ventas Chairman and Chief Executive Officer Debra A. Cafaro was
recognized by the Harvard Business Review as one of "The
Best-Performing CEOs in the World." She is one of 30 CEOs named to the Harvard
Business Review list for three consecutive years and one of only
two women on this year's list. Ventas's financial performance ranked
in the top 30 of 886 companies globally for Ms. Cafaro's tenure, which
exceeds 17 years.
-
Ventas Chairman and Chief Executive Officer Debra A. Cafaro was
recognized by Modern Healthcare as one of the "100 Most
Influential People in Healthcare" for 2016. This is the third time Ms.
Cafaro has received this recognition, demonstrating her commitment to
and stature in the healthcare industry.
Updated 2016 Guidance
The Company updated and improved its expectations for full year 2016
constant currency cash NOI growth for the 1,044 assets in the full year
same-store pool to now range from 2.5 to 3 percent in 2016, compared to
its previously disclosed guidance of 2 to 3 percent.
Ventas also increased its outlook for 2016 income from continuing
operations per diluted share to now range between $1.51 and $1.63. The
Company expects reported normalized FFO per diluted share to now range
between $4.10 and $4.13, an increase of nearly 3 cents at the midpoint
and now representing 4 to 5 percent per share growth over 2015 on a
Comparable basis. The Company also increased its NAREIT FFO per diluted
share expectations to range between $4.09 and $4.13.
The Company continues to expect to complete approximately $500 million
in total 2016 dispositions; it has already closed $272 million
year-to-date. Consistent with its practice, the Company's guidance does
not include any further material investments, dispositions or capital
activity. A reconciliation of the Company's guidance to the Company's
projected GAAP earnings is included in this press release.
The Company's guidance is based on a number of other assumptions that
are subject to change and many of which are outside the control of the
Company. If actual results vary from these assumptions, the Company's
expectations may change. There can be no assurance that the Company will
achieve these results.
Third Quarter Conference Call
Ventas will hold a conference call to discuss this earnings release
today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The dial-in
number for the conference call is (844) 776-7841 (or (661) 378-9542 for
international callers). The participant passcode is "Ventas." The
conference call is being webcast live by NASDAQ OMX and can be accessed
at the Company's website at www.ventasreit.com.
A replay of the webcast will be available following the call online, or
by calling (855) 859-2056 (or (404) 537-3406 for international callers),
passcode 96801614, beginning at approximately 2:00 p.m. Eastern Time and
will remain for 36 days.
Ventas, Inc., an S&P 500 company, is a leading real estate investment
trust. Its diverse portfolio of approximately 1,300 assets in the United
States, Canada and the United Kingdom consists of seniors housing
communities, medical office buildings, life science and innovation
centers, skilled nursing facilities, specialty hospitals and general
acute care hospitals. Through its Lillibridge subsidiary, Ventas
provides management, leasing, marketing, facility development and
advisory services to highly rated hospitals and health systems
throughout the United States. More information about Ventas and
Lillibridge can be found at www.ventasreit.com
and www.lillibridge.com.
Supplemental information regarding the Company can be found on the
Company's website under the "Investor Relations" section or at www.ventasreit.com/investor-relations/annual-reports---supplemental-information.
A comprehensive listing of the Company's properties is available at www.ventasreit.com/our-portfolio/properties-by-stateprovince.
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements regarding the Company's or its tenants', operators',
borrowers' or managers' expected future financial condition, results of
operations, cash flows, funds from operations, dividends and dividend
plans, financing opportunities and plans, capital markets transactions,
business strategy, budgets, projected costs, operating metrics, capital
expenditures, competitive positions, acquisitions, investment
opportunities, dispositions, merger or acquisition integration, growth
opportunities, expected lease income, continued qualification as a real
estate investment trust ("REIT"), plans and objectives of management for
future operations and statements that include words such as
"anticipate," "if," "believe," "plan," "estimate," "expect," "intend,"
"may," "could," "should," "will" and other similar expressions are
forward-looking statements. These forward-looking statements are
inherently uncertain, and actual results may differ from the Company's
expectations. The Company does not undertake a duty to update
these forward-looking statements, which speak only as of the date on
which they are made.
The Company's actual future results and trends may differ materially
from expectations depending on a variety of factors discussed in the
Company's filings with the Securities and Exchange Commission. These
factors include without limitation: (a) the ability and willingness of
the Company's tenants, operators, borrowers, managers and other third
parties to satisfy their obligations under their respective contractual
arrangements with the Company, including, in some cases, their
obligations to indemnify, defend and hold harmless the Company from and
against various claims, litigation and liabilities; (b) the ability of
the Company's tenants, operators, borrowers and managers to maintain the
financial strength and liquidity necessary to satisfy their respective
obligations and liabilities to third parties, including without
limitation obligations under their existing credit facilities and other
indebtedness; (c) the Company's success in implementing its business
strategy and the Company's ability to identify, underwrite, finance,
consummate and integrate diversifying acquisitions and investments; (d)
macroeconomic conditions such as a disruption of or lack of access to
the capital markets, changes in the debt rating on U.S. government
securities, default or delay in payment by the United States of its
obligations, and changes in the federal or state budgets resulting in
the reduction or nonpayment of Medicare or Medicaid reimbursement rates;
(e) the nature and extent of future competition, including new
construction in the markets in which the Company's seniors housing
communities and medical office buildings ("MOBs") are located;
(f) the extent of future or pending healthcare reform and regulation,
including cost containment measures and changes in reimbursement
policies, procedures and rates; (g) increases in the Company's borrowing
costs as a result of changes in interest rates and other factors; (h)
the ability of the Company's tenants, operators and managers, as
applicable, to comply with laws, rules and regulations in the operation
of the Company's properties, to deliver high-quality services, to
attract and retain qualified personnel and to attract residents and
patients; (i) changes in general economic conditions or economic
conditions in the markets in which the Company may, from time to time,
compete, and the effect of those changes on the Company's revenues,
earnings and funding sources; (j) the Company's ability to pay down,
refinance, restructure or extend its indebtedness as it becomes due; (k)
the Company's ability and willingness to maintain its qualification as a
REIT in light of economic, market, legal, tax and other considerations;
(l) final determination of the Company's taxable net income for the year
ending December 31, 2016; (m) the ability and willingness of the
Company's tenants to renew their leases with the Company upon expiration
of the leases, the Company's ability to reposition its properties on the
same or better terms in the event of nonrenewal or in the event the
Company exercises its right to replace an existing tenant, and
obligations, including indemnification obligations, the Company may
incur in connection with the replacement of an existing tenant; (n)
risks associated with the Company's senior living operating portfolio,
such as factors that can cause volatility in the Company's operating
income and earnings generated by those properties, including without
limitation national and regional economic conditions, costs of food,
materials, energy, labor and services, employee benefit costs, insurance
costs and professional and general liability claims, and the timely
delivery of accurate property-level financial results for those
properties; (o) changes in exchange rates for any foreign currency in
which the Company may, from time to time, conduct business; (p)
year-over-year changes in the Consumer Price Index or the UK Retail
Price Index and the effect of those changes on the rent escalators
contained in the Company's leases and the Company's earnings; (q) the
Company's ability and the ability of its tenants, operators, borrowers
and managers to obtain and maintain adequate property, liability and
other insurance from reputable, financially stable providers; (r) the
impact of increased operating costs and uninsured professional liability
claims on the Company's liquidity, financial condition and results of
operations or that of the Company's tenants, operators, borrowers and
managers, and the ability of the Company and the Company's tenants,
operators, borrowers and managers to accurately estimate the magnitude
of those claims; (s) risks associated with the Company's MOB portfolio
and operations, including the Company's ability to successfully design,
develop and manage MOBs and to retain key personnel; (t) the ability of
the hospitals on or near whose campuses the Company's MOBs are located
and their affiliated health systems to remain competitive and
financially viable and to attract physicians and physician groups; (u)
risks associated with the Company's investments in joint ventures and
unconsolidated entities, including its lack of sole decision-making
authority and its reliance on its joint venture partners' financial
condition; (v) the Company's ability to obtain the financial results
expected from its development and redevelopment projects; (w) the impact
of market or issuer events on the liquidity or value of the Company's
investments in marketable securities; (x) consolidation activity in the
seniors housing and healthcare industries resulting in a change of
control of, or a competitor's investment in, one or more of the
Company's tenants, operators, borrowers or managers or significant
changes in the senior management of the Company's tenants, operators,
borrowers or managers; (y) the impact of litigation or any financial,
accounting, legal or regulatory issues that may affect the Company or
its tenants, operators, borrowers or managers; and (z) changes in
accounting principles, or their application or interpretation, and the
Company's ability to make estimates and the assumptions underlying the
estimates, which could have an effect on the Company's earnings.
|
|
CONSOLIDATED BALANCE SHEETS
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
2016
|
|
2016
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Real estate investments:
|
|
|
|
|
|
|
|
|
|
|
|
Land and improvements
|
|
|
$
|
2,089,329
|
|
|
$
|
2,041,880
|
|
|
$
|
2,060,247
|
|
|
$
|
2,056,428
|
|
|
$
|
2,068,467
|
|
Buildings and improvements
|
|
|
21,551,049
|
|
|
20,272,554
|
|
|
20,395,386
|
|
|
20,309,599
|
|
|
20,220,624
|
|
Construction in progress
|
|
|
192,848
|
|
|
127,647
|
|
|
119,215
|
|
|
92,005
|
|
|
124,381
|
|
Acquired lease intangibles
|
|
|
1,522,708
|
|
|
1,332,173
|
|
|
1,343,187
|
|
|
1,344,422
|
|
|
1,347,493
|
|
|
|
|
25,355,934
|
|
|
23,774,254
|
|
|
23,918,035
|
|
|
23,802,454
|
|
|
23,760,965
|
|
Accumulated depreciation and amortization
|
|
|
(4,754,532
|
)
|
|
(4,560,504
|
)
|
|
(4,409,554
|
)
|
|
(4,177,234
|
)
|
|
(3,972,544
|
)
|
Net real estate property
|
|
|
20,601,402
|
|
|
19,213,750
|
|
|
19,508,481
|
|
|
19,625,220
|
|
|
19,788,421
|
|
Secured loans receivable and investments, net
|
|
|
821,663
|
|
|
1,003,561
|
|
|
1,002,598
|
|
|
857,112
|
|
|
766,707
|
|
Investments in unconsolidated real estate entities
|
|
|
97,814
|
|
|
96,952
|
|
|
98,120
|
|
|
95,707
|
|
|
96,208
|
|
Net real estate investments
|
|
|
21,520,879
|
|
|
20,314,263
|
|
|
20,609,199
|
|
|
20,578,039
|
|
|
20,651,336
|
|
Cash and cash equivalents
|
|
|
89,279
|
|
|
57,322
|
|
|
51,701
|
|
|
53,023
|
|
|
65,231
|
|
Escrow deposits and restricted cash
|
|
|
89,521
|
|
|
65,626
|
|
|
76,710
|
|
|
77,896
|
|
|
74,491
|
|
Goodwill
|
|
|
1,043,075
|
|
|
1,043,479
|
|
|
1,044,983
|
|
|
1,047,497
|
|
|
1,052,321
|
|
Assets held for sale
|
|
|
195,252
|
|
|
195,271
|
|
|
54,263
|
|
|
93,060
|
|
|
152,014
|
|
Other assets
|
|
|
488,258
|
|
|
417,511
|
|
|
424,436
|
|
|
412,403
|
|
|
418,584
|
|
Total assets
|
|
|
$
|
23,426,264
|
|
|
$
|
22,093,472
|
|
|
$
|
22,261,292
|
|
|
$
|
22,261,918
|
|
|
$
|
22,413,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Senior notes payable and other debt
|
|
|
$
|
11,252,327
|
|
|
$
|
10,901,131
|
|
|
$
|
11,247,730
|
|
|
$
|
11,206,996
|
|
|
$
|
11,284,957
|
|
Accrued interest
|
|
|
70,790
|
|
|
80,157
|
|
|
66,988
|
|
|
80,864
|
|
|
67,440
|
|
Accounts payable and other liabilities
|
|
|
930,103
|
|
|
735,287
|
|
|
738,327
|
|
|
779,380
|
|
|
791,556
|
|
Liabilities related to assets held for sale
|
|
|
77,608
|
|
|
88,967
|
|
|
12,625
|
|
|
34,340
|
|
|
48,860
|
|
Deferred income taxes
|
|
|
315,713
|
|
|
320,468
|
|
|
333,354
|
|
|
338,382
|
|
|
352,658
|
|
Total liabilities
|
|
|
12,646,541
|
|
|
12,126,010
|
|
|
12,399,024
|
|
|
12,439,962
|
|
|
12,545,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable OP unitholder and noncontrolling interests
|
|
|
209,278
|
|
|
217,686
|
|
|
191,739
|
|
|
196,529
|
|
|
198,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Ventas stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Common stock, $0.25 par value; 353,793; 341,055; 337,486; 334,386
and 333,027 shares issued at September 30, 2016, June 30, 2016,
March 31, 2016, December 31, 2015 and September 30, 2015,
respectively
|
|
|
88,431
|
|
|
85,246
|
|
|
84,354
|
|
|
83,579
|
|
|
83,238
|
|
Capital in excess of par value
|
|
|
12,870,566
|
|
|
11,961,951
|
|
|
11,758,306
|
|
|
11,602,838
|
|
|
11,523,312
|
|
Accumulated other comprehensive loss
|
|
|
(49,614
|
)
|
|
(44,195
|
)
|
|
(19,932
|
)
|
|
(7,565
|
)
|
|
(592
|
)
|
Retained earnings (deficit)
|
|
|
(2,420,766
|
)
|
|
(2,313,287
|
)
|
|
(2,208,474
|
)
|
|
(2,111,958
|
)
|
|
(1,992,848
|
)
|
Treasury stock, 1; 0; 1; 44 and 61 shares at September 30, 2016,
June 30, 2016, March 31, 2016, December 31, 2015 and September 30,
2015, respectively
|
|
|
(78
|
)
|
|
-
|
|
|
(59
|
)
|
|
(2,567
|
)
|
|
(3,675
|
)
|
Total Ventas stockholders' equity
|
|
|
10,488,539
|
|
|
9,689,715
|
|
|
9,614,195
|
|
|
9,564,327
|
|
|
9,609,435
|
|
Noncontrolling interest
|
|
|
81,906
|
|
|
60,061
|
|
|
56,334
|
|
|
61,100
|
|
|
60,239
|
|
Total equity
|
|
|
10,570,445
|
|
|
9,749,776
|
|
|
9,670,529
|
|
|
9,625,427
|
|
|
9,669,674
|
|
Total liabilities and equity
|
|
|
$
|
23,426,264
|
|
|
$
|
22,093,472
|
|
|
$
|
22,261,292
|
|
|
$
|
22,261,918
|
|
|
$
|
22,413,977
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Rental income:
|
|
|
|
|
|
|
|
|
|
Triple-net leased
|
|
|
$
|
210,424
|
|
|
$
|
201,028
|
|
|
$
|
635,030
|
|
|
$
|
571,591
|
|
Office
|
|
|
158,273
|
|
|
142,755
|
|
|
446,496
|
|
|
420,287
|
|
|
|
|
368,697
|
|
|
343,783
|
|
|
1,081,526
|
|
|
991,878
|
|
Resident fees and services
|
|
|
461,974
|
|
|
454,825
|
|
|
1,390,387
|
|
|
1,356,384
|
|
Office building and other services revenue
|
|
|
4,317
|
|
|
10,000
|
|
|
17,006
|
|
|
29,951
|
|
Income from loans and investments
|
|
|
31,566
|
|
|
18,924
|
|
|
78,098
|
|
|
66,192
|
|
Interest and other income
|
|
|
562
|
|
|
74
|
|
|
792
|
|
|
719
|
|
Total revenues
|
|
|
867,116
|
|
|
827,606
|
|
|
2,567,809
|
|
|
2,445,124
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
105,063
|
|
|
97,135
|
|
|
312,001
|
|
|
263,422
|
|
Depreciation and amortization
|
|
|
208,387
|
|
|
226,332
|
|
|
666,735
|
|
|
657,262
|
|
Property-level operating expenses:
|
|
|
|
|
|
|
|
|
|
Senior living
|
|
|
312,145
|
|
|
304,540
|
|
|
932,675
|
|
|
902,154
|
|
Office
|
|
|
48,972
|
|
|
43,305
|
|
|
136,619
|
|
|
129,152
|
|
|
|
|
361,117
|
|
|
347,845
|
|
|
1,069,294
|
|
|
1,031,306
|
|
Office building services costs
|
|
|
974
|
|
|
6,416
|
|
|
6,277
|
|
|
19,098
|
|
General, administrative and professional fees
|
|
|
31,567
|
|
|
32,114
|
|
|
95,387
|
|
|
100,399
|
|
Loss on extinguishment of debt, net
|
|
|
383
|
|
|
15,331
|
|
|
3,165
|
|
|
14,897
|
|
Merger-related expenses and deal costs
|
|
|
16,217
|
|
|
62,145
|
|
|
25,073
|
|
|
105,023
|
|
Other
|
|
|
2,430
|
|
|
4,795
|
|
|
8,901
|
|
|
13,948
|
|
Total expenses
|
|
|
726,138
|
|
|
792,113
|
|
|
2,186,833
|
|
|
2,205,355
|
|
Income before unconsolidated entities, income taxes, discontinued
operations, real estate dispositions and noncontrolling interest
|
|
|
140,978
|
|
|
35,493
|
|
|
380,976
|
|
|
239,769
|
|
Income (loss) from unconsolidated entities
|
|
|
931
|
|
|
(955
|
)
|
|
2,151
|
|
|
(1,197
|
)
|
Income tax benefit
|
|
|
8,537
|
|
|
10,697
|
|
|
28,507
|
|
|
27,736
|
|
Income from continuing operations
|
|
|
150,446
|
|
|
45,235
|
|
|
411,634
|
|
|
266,308
|
|
Discontinued operations
|
|
|
(118
|
)
|
|
(22,383
|
)
|
|
(755
|
)
|
|
13,434
|
|
(Loss) gain on real estate dispositions
|
|
|
(144
|
)
|
|
265
|
|
|
31,779
|
|
|
14,420
|
|
Net income
|
|
|
150,184
|
|
|
23,117
|
|
|
442,658
|
|
|
294,162
|
|
Net income attributable to noncontrolling interest
|
|
|
732
|
|
|
265
|
|
|
1,064
|
|
|
1,047
|
|
Net income attributable to common stockholders
|
|
|
$
|
149,452
|
|
|
$
|
22,852
|
|
|
$
|
441,594
|
|
|
$
|
293,115
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to common
stockholders, including real estate dispositions
|
|
|
$
|
0.43
|
|
|
$
|
0.14
|
|
|
$
|
1.29
|
|
|
$
|
0.85
|
|
Discontinued operations
|
|
|
(0.00
|
)
|
|
(0.07
|
)
|
|
(0.00
|
)
|
|
0.04
|
|
Net income attributable to common stockholders
|
|
|
$
|
0.43
|
|
|
$
|
0.07
|
|
|
$
|
1.29
|
|
|
$
|
0.89
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to common
stockholders, including real estate dispositions
|
|
|
$
|
0.42
|
|
|
$
|
0.14
|
|
|
$
|
1.28
|
|
|
$
|
0.84
|
|
Discontinued operations
|
|
|
(0.00
|
)
|
|
(0.07
|
)
|
|
(0.00
|
)
|
|
0.04
|
|
Net income attributable to common stockholders
|
|
|
$
|
0.42
|
|
|
$
|
0.07
|
|
|
$
|
1.28
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
350,274
|
|
|
332,491
|
|
|
341,610
|
|
|
329,440
|
|
Diluted
|
|
|
354,186
|
|
|
336,338
|
|
|
345,352
|
|
|
333,210
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
$
|
0.73
|
|
|
$
|
0.73
|
|
|
$
|
2.19
|
|
|
$
|
2.31
|
|
|
|
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Quarters
|
|
2015 Quarters
|
|
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Rental income:
|
|
|
|
|
|
|
|
|
|
|
|
Triple-net leased
|
|
|
$
|
210,424
|
|
|
$
|
210,119
|
|
|
$
|
214,487
|
|
|
$
|
208,210
|
|
|
$
|
201,028
|
|
Office
|
|
|
158,273
|
|
|
144,087
|
|
|
144,136
|
|
|
145,958
|
|
|
142,755
|
|
|
|
|
368,697
|
|
|
354,206
|
|
|
358,623
|
|
|
354,168
|
|
|
343,783
|
|
Resident fees and services
|
|
|
461,974
|
|
|
464,437
|
|
|
463,976
|
|
|
454,871
|
|
|
454,825
|
|
Office building and other services revenue
|
|
|
4,317
|
|
|
5,504
|
|
|
7,185
|
|
|
11,541
|
|
|
10,000
|
|
Income from loans and investments
|
|
|
31,566
|
|
|
24,146
|
|
|
22,386
|
|
|
20,361
|
|
|
18,924
|
|
Interest and other income
|
|
|
562
|
|
|
111
|
|
|
119
|
|
|
333
|
|
|
74
|
|
Total revenues
|
|
|
867,116
|
|
|
848,404
|
|
|
852,289
|
|
|
841,274
|
|
|
827,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
105,063
|
|
|
103,665
|
|
|
103,273
|
|
|
103,692
|
|
|
97,135
|
|
Depreciation and amortization
|
|
|
208,387
|
|
|
221,961
|
|
|
236,387
|
|
|
236,795
|
|
|
226,332
|
|
Property-level operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Senior living
|
|
|
312,145
|
|
|
307,989
|
|
|
312,541
|
|
|
307,261
|
|
|
304,540
|
|
Office
|
|
|
48,972
|
|
|
43,966
|
|
|
43,681
|
|
|
45,073
|
|
|
43,305
|
|
|
|
|
361,117
|
|
|
351,955
|
|
|
356,222
|
|
|
352,334
|
|
|
347,845
|
|
Office building services costs
|
|
|
974
|
|
|
1,852
|
|
|
3,451
|
|
|
7,467
|
|
|
6,416
|
|
General, administrative and professional fees
|
|
|
31,567
|
|
|
32,094
|
|
|
31,726
|
|
|
27,636
|
|
|
32,114
|
|
Loss (gain) on extinguishment of debt, net
|
|
|
383
|
|
|
2,468
|
|
|
314
|
|
|
(486
|
)
|
|
15,331
|
|
Merger-related expenses and deal costs
|
|
|
16,217
|
|
|
7,224
|
|
|
1,632
|
|
|
(2,079
|
)
|
|
62,145
|
|
Other
|
|
|
2,430
|
|
|
2,303
|
|
|
4,168
|
|
|
4,009
|
|
|
4,795
|
|
Total expenses
|
|
|
726,138
|
|
|
723,522
|
|
|
737,173
|
|
|
729,368
|
|
|
792,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before unconsolidated entities, income taxes, discontinued
operations, real estate dispositions and noncontrolling interest
|
|
|
140,978
|
|
|
124,882
|
|
|
115,116
|
|
|
111,906
|
|
|
35,493
|
|
Income (loss) from unconsolidated entities
|
|
|
931
|
|
|
1,418
|
|
|
(198
|
)
|
|
(223
|
)
|
|
(955
|
)
|
Income tax benefit
|
|
|
8,537
|
|
|
11,549
|
|
|
8,421
|
|
|
11,548
|
|
|
10,697
|
|
Income from continuing operations
|
|
|
150,446
|
|
|
137,849
|
|
|
123,339
|
|
|
123,231
|
|
|
45,235
|
|
Discontinued operations
|
|
|
(118
|
)
|
|
(148
|
)
|
|
(489
|
)
|
|
(2,331
|
)
|
|
(22,383
|
)
|
(Loss) gain on real estate dispositions
|
|
|
(144
|
)
|
|
5,739
|
|
|
26,184
|
|
|
4,160
|
|
|
265
|
|
Net income
|
|
|
150,184
|
|
|
143,440
|
|
|
149,034
|
|
|
125,060
|
|
|
23,117
|
|
Net income attributable to noncontrolling interest
|
|
|
732
|
|
|
278
|
|
|
54
|
|
|
332
|
|
|
265
|
|
Net income attributable to common stockholders
|
|
|
$
|
149,452
|
|
|
$
|
143,162
|
|
|
$
|
148,980
|
|
|
$
|
124,728
|
|
|
$
|
22,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to common
stockholders, including real estate dispositions
|
|
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
0.44
|
|
|
$
|
0.38
|
|
|
$
|
0.14
|
|
Discontinued operations
|
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.01
|
)
|
|
(0.07
|
)
|
Net income attributable to common stockholders
|
|
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
0.44
|
|
|
$
|
0.37
|
|
|
$
|
0.07
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to common
stockholders, including real estate dispositions
|
|
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
$
|
0.44
|
|
|
$
|
0.38
|
|
|
$
|
0.14
|
|
Discontinued operations
|
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.01
|
)
|
|
(0.07
|
)
|
Net income attributable to common stockholders
|
|
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
$
|
0.44
|
|
|
$
|
0.37
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
350,274
|
|
|
338,901
|
|
|
335,559
|
|
|
332,914
|
|
|
332,491
|
|
Diluted
|
|
|
354,186
|
|
|
342,571
|
|
|
339,202
|
|
|
336,406
|
|
|
336,338
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
2016
|
|
2015
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
|
$
|
442,658
|
|
|
$
|
294,162
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization (including amounts in discontinued
operations)
|
|
|
666,735
|
|
|
736,870
|
|
Amortization of deferred revenue and lease intangibles, net
|
|
|
(15,307
|
)
|
|
(19,312
|
)
|
Other non-cash amortization
|
|
|
7,174
|
|
|
3,051
|
|
Stock-based compensation
|
|
|
15,885
|
|
|
16,061
|
|
Straight-lining of rental income, net
|
|
|
(21,386
|
)
|
|
(25,118
|
)
|
Loss on extinguishment of debt, net
|
|
|
3,165
|
|
|
14,897
|
|
Gain on real estate dispositions (including amounts in discontinued
operations)
|
|
|
(31,779
|
)
|
|
(14,649
|
)
|
Gain on real estate loan investments
|
|
|
(2,271
|
)
|
|
-
|
|
Gain on sale of marketable debt securities
|
|
|
-
|
|
|
(5,800
|
)
|
Income tax benefit
|
|
|
(30,832
|
)
|
|
(30,717
|
)
|
(Income) loss from unconsolidated entities
|
|
|
(2,151
|
)
|
|
1,197
|
|
Distributions from unconsolidated entities
|
|
|
5,574
|
|
|
20,550
|
|
Other
|
|
|
(1,075
|
)
|
|
3,276
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Decrease in other assets
|
|
|
1,753
|
|
|
11,164
|
|
(Decrease) increase in accrued interest
|
|
|
(10,053
|
)
|
|
6,338
|
|
(Decrease) increase in accounts payable and other liabilities
|
|
|
(26,820
|
)
|
|
10,075
|
|
Net cash provided by operating activities
|
|
|
1,001,270
|
|
|
1,022,045
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Net investment in real estate property
|
|
|
(1,421,592
|
)
|
|
(2,556,988
|
)
|
Investment in loans receivable and other
|
|
|
(154,949
|
)
|
|
(74,386
|
)
|
Proceeds from real estate disposals
|
|
|
63,561
|
|
|
409,633
|
|
Proceeds from loans receivable
|
|
|
194,063
|
|
|
106,909
|
|
Proceeds from sale or maturity of marketable securities
|
|
|
-
|
|
|
76,800
|
|
Funds held in escrow for future development expenditures
|
|
|
-
|
|
|
4,003
|
|
Development project expenditures
|
|
|
(94,398
|
)
|
|
(90,458
|
)
|
Capital expenditures
|
|
|
(75,296
|
)
|
|
(75,812
|
)
|
Investment in unconsolidated operating entity
|
|
|
-
|
|
|
(26,282
|
)
|
Other
|
|
|
(6,175
|
)
|
|
(27,984
|
)
|
Net cash used in investing activities
|
|
|
(1,494,786
|
)
|
|
(2,254,565
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
Net change in borrowings under credit facility
|
|
|
46,728
|
|
|
(790,406
|
)
|
Net cash impact of CCP Spin-Off
|
|
|
-
|
|
|
(128,749
|
)
|
Proceeds from debt
|
|
|
876,617
|
|
|
2,511,061
|
|
Proceeds from debt related to CCP Spin-Off
|
|
|
-
|
|
|
1,400,000
|
|
Repayment of debt
|
|
|
(916,505
|
)
|
|
(1,329,070
|
)
|
Purchase of noncontrolling interest
|
|
|
(1,604
|
)
|
|
(3,819
|
)
|
Payment of deferred financing costs
|
|
|
(6,147
|
)
|
|
(23,893
|
)
|
Issuance of common stock, net
|
|
|
1,265,702
|
|
|
417,818
|
|
Cash distribution to common stockholders
|
|
|
(750,402
|
)
|
|
(759,575
|
)
|
Cash distribution to redeemable OP unitholders
|
|
|
(6,486
|
)
|
|
(12,776
|
)
|
Purchases of redeemable OP units
|
|
|
-
|
|
|
(33,188
|
)
|
Contributions from noncontrolling interest
|
|
|
5,926
|
|
|
-
|
|
Distributions to noncontrolling interest
|
|
|
(5,121
|
)
|
|
(11,250
|
)
|
Other
|
|
|
21,507
|
|
|
6,489
|
|
Net cash provided by financing activities
|
|
|
530,215
|
|
|
1,242,642
|
|
Net increase in cash and cash equivalents
|
|
|
36,699
|
|
|
10,122
|
|
Effect of foreign currency translation on cash and cash equivalents
|
|
|
(443
|
)
|
|
(239
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
53,023
|
|
|
55,348
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
89,279
|
|
|
$
|
65,231
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
Assets and liabilities assumed from acquisitions:
|
|
|
|
|
|
Real estate investments
|
|
|
$
|
59,666
|
|
|
$
|
2,567,150
|
|
Utilization of funds held for an Internal Revenue Code Section 1031
exchange
|
|
|
(6,954
|
)
|
|
(8,911
|
)
|
Other assets acquired
|
|
|
79,879
|
|
|
20,221
|
|
Debt assumed
|
|
|
47,641
|
|
|
177,857
|
|
Other liabilities
|
|
|
60,446
|
|
|
57,937
|
|
Deferred income tax liability
|
|
|
2,279
|
|
|
50,836
|
|
Redeemable OP unitholder interests assumed
|
|
|
-
|
|
|
87,245
|
|
Noncontrolling interest
|
|
|
22,225
|
|
|
-
|
|
Equity issued
|
|
|
-
|
|
|
2,204,585
|
|
Non-cash impact of CCP Spin-Off
|
|
|
-
|
|
|
1,256,404
|
|
Equity issued for purchase of OP and Class C units
|
|
|
22,970
|
|
|
-
|
|
|
|
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Quarters
|
|
2015 Quarters
|
|
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
150,184
|
|
|
$
|
143,440
|
|
|
$
|
149,034
|
|
|
$
|
125,060
|
|
|
$
|
23,117
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (including amounts in discontinued
operations)
|
|
|
208,387
|
|
|
221,961
|
|
|
236,387
|
|
|
236,793
|
|
|
240,210
|
|
Amortization of deferred revenue and lease intangibles, net
|
|
|
(5,217
|
)
|
|
(5,053
|
)
|
|
(5,037
|
)
|
|
(4,817
|
)
|
|
(5,682
|
)
|
Other non-cash amortization
|
|
|
2,487
|
|
|
2,241
|
|
|
2,446
|
|
|
2,397
|
|
|
2,142
|
|
Stock-based compensation
|
|
|
5,848
|
|
|
5,008
|
|
|
5,029
|
|
|
3,476
|
|
|
4,869
|
|
Straight-lining of rental income, net
|
|
|
(5,960
|
)
|
|
(5,581
|
)
|
|
(9,845
|
)
|
|
(8,674
|
)
|
|
(8,357
|
)
|
Loss (gain) on extinguishment of debt, net
|
|
|
383
|
|
|
2,468
|
|
|
314
|
|
|
(486
|
)
|
|
15,331
|
|
Loss (gain) on real estate dispositions (including amounts in
discontinued operations)
|
|
|
144
|
|
|
(5,739
|
)
|
|
(26,184
|
)
|
|
(4,162
|
)
|
|
(217
|
)
|
Gain on real estate loan investments
|
|
|
(2,238
|
)
|
|
(33
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
Income tax benefit
|
|
|
(9,389
|
)
|
|
(12,287
|
)
|
|
(9,156
|
)
|
|
(11,667
|
)
|
|
(12,477
|
)
|
(Income) loss from unconsolidated entities
|
|
|
(931
|
)
|
|
(1,418
|
)
|
|
198
|
|
|
47
|
|
|
955
|
|
Loss on re-measurement of equity interest upon acquisition, net
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
176
|
|
|
-
|
|
Distributions from unconsolidated entities
|
|
|
1,701
|
|
|
1,884
|
|
|
1,989
|
|
|
2,912
|
|
|
5,577
|
|
Other
|
|
|
(1,799
|
)
|
|
(375
|
)
|
|
1,099
|
|
|
3,241
|
|
|
170
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in other assets
|
|
|
(8,856
|
)
|
|
15,444
|
|
|
(4,835
|
)
|
|
31,152
|
|
|
20,875
|
|
(Decrease) increase in accrued interest
|
|
|
(9,284
|
)
|
|
13,542
|
|
|
(14,311
|
)
|
|
13,657
|
|
|
(9,770
|
)
|
Increase (decrease) in accounts payable and other liabilities
|
|
|
19,335
|
|
|
8,082
|
|
|
(54,237
|
)
|
|
(19,383
|
)
|
|
27,578
|
|
Net cash provided by operating activities
|
|
|
344,795
|
|
|
383,584
|
|
|
272,891
|
|
|
369,722
|
|
|
304,321
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate property
|
|
|
(1,387,139
|
)
|
|
(20,833
|
)
|
|
(13,620
|
)
|
|
(93,800
|
)
|
|
(1,303,078
|
)
|
Investment in loans receivable and other
|
|
|
(2,499
|
)
|
|
(6,236
|
)
|
|
(146,214
|
)
|
|
(96,758
|
)
|
|
(18,727
|
)
|
Proceeds from real estate disposals
|
|
|
-
|
|
|
9,350
|
|
|
54,211
|
|
|
82,775
|
|
|
136,442
|
|
Proceeds from loans receivable
|
|
|
186,419
|
|
|
6,019
|
|
|
1,625
|
|
|
2,267
|
|
|
13,634
|
|
Proceeds from sale or maturity of marketable securities
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
19,575
|
|
Development project expenditures
|
|
|
(24,719
|
)
|
|
(34,912
|
)
|
|
(34,767
|
)
|
|
(29,216
|
)
|
|
(27,828
|
)
|
Capital expenditures
|
|
|
(28,371
|
)
|
|
(23,204
|
)
|
|
(23,721
|
)
|
|
(31,675
|
)
|
|
(32,383
|
)
|
Investment in unconsolidated operating entity
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(26,282
|
)
|
Other
|
|
|
(1,910
|
)
|
|
-
|
|
|
(4,265
|
)
|
|
(2,720
|
)
|
|
(19,171
|
)
|
Net cash used in investing activities
|
|
|
(1,258,219
|
)
|
|
(69,816
|
)
|
|
(166,751
|
)
|
|
(169,127
|
)
|
|
(1,257,818
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net change in borrowings under credit facility
|
|
|
22,424
|
|
|
(113,136
|
)
|
|
137,440
|
|
|
66,949
|
|
|
(469,072
|
)
|
Net cash impact of CCP Spin-Off
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(128,749
|
)
|
Proceeds from debt
|
|
|
460,400
|
|
|
416,072
|
|
|
145
|
|
|
1,686
|
|
|
1,403,090
|
|
Proceeds from debt related to CCP Spin-Off
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,400,000
|
|
Repayment of debt
|
|
|
(176,168
|
)
|
|
(589,028
|
)
|
|
(151,309
|
)
|
|
(106,526
|
)
|
|
(1,050,628
|
)
|
Purchase of noncontrolling interest
|
|
|
-
|
|
|
(1,604
|
)
|
|
-
|
|
|
-
|
|
|
(3
|
)
|
Payment of deferred financing costs
|
|
|
(2,303
|
)
|
|
(3,768
|
)
|
|
(76
|
)
|
|
(772
|
)
|
|
(9,285
|
)
|
Issuance of common stock, net
|
|
|
887,963
|
|
|
228,108
|
|
|
149,631
|
|
|
73,205
|
|
|
65,651
|
|
Cash distribution to common stockholders
|
|
|
(256,931
|
)
|
|
(247,975
|
)
|
|
(245,496
|
)
|
|
(243,838
|
)
|
|
(243,171
|
)
|
Cash distribution to redeemable OP unitholders
|
|
|
(2,049
|
)
|
|
(2,114
|
)
|
|
(2,323
|
)
|
|
(2,319
|
)
|
|
(8,079
|
)
|
Contributions from noncontrolling interest
|
|
|
246
|
|
|
5,680
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Distributions to noncontrolling interest
|
|
|
(1,539
|
)
|
|
(1,839
|
)
|
|
(1,743
|
)
|
|
(1,399
|
)
|
|
(1,783
|
)
|
Other
|
|
|
13,624
|
|
|
1,732
|
|
|
6,151
|
|
|
494
|
|
|
561
|
|
Net cash provided by (used in) financing activities
|
|
|
945,667
|
|
|
(307,872
|
)
|
|
(107,580
|
)
|
|
(212,520
|
)
|
|
958,532
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
32,243
|
|
|
5,896
|
|
|
(1,440
|
)
|
|
(11,925
|
)
|
|
5,035
|
|
Effect of foreign currency translation on cash and cash equivalents
|
|
|
(286
|
)
|
|
(275
|
)
|
|
118
|
|
|
(283
|
)
|
|
(336
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
57,322
|
|
|
51,701
|
|
|
53,023
|
|
|
65,231
|
|
|
60,532
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
89,279
|
|
|
$
|
57,322
|
|
|
$
|
51,701
|
|
|
$
|
53,023
|
|
|
$
|
65,231
|
|
|
|
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Quarters
|
|
|
2015 Quarters
|
|
|
|
Third
|
|
|
Second
|
|
|
First
|
|
|
Fourth
|
|
|
Third
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets and liabilities assumed from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate investments
|
|
|
$
|
51,001
|
|
|
|
$
|
6,107
|
|
|
|
$
|
2,558
|
|
|
|
$
|
(1,190
|
)
|
|
|
$
|
3,649
|
|
Utilization of funds held for an Internal Revenue Code Section 1031
exchange
|
|
|
-
|
|
|
|
(6,954
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other assets acquired
|
|
|
79,018
|
|
|
|
927
|
|
|
|
(66
|
)
|
|
|
(131
|
)
|
|
|
3,716
|
|
Debt assumed
|
|
|
47,641
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other liabilities
|
|
|
57,808
|
|
|
|
80
|
|
|
|
2,558
|
|
|
|
(3,478
|
)
|
|
|
8,149
|
|
Deferred income tax liability
|
|
|
2,345
|
|
|
|
-
|
|
|
|
(66
|
)
|
|
|
1,317
|
|
|
|
(784
|
)
|
Noncontrolling interest
|
|
|
22,225
|
|
|
|
-
|
|
|
|
-
|
|
|
|
840
|
|
|
|
-
|
|
Non-cash impact of CCP Spin-Off
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,256,404
|
|
Equity issued for purchase of OP and Class C units
|
|
|
2,200
|
|
|
|
1,422
|
|
|
|
19,348
|
|
|
|
-
|
|
|
|
-
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Funds From Operations (FFO) and Funds Available for
Distribution (FAD) Including Comparable Earnings1
(Dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 YOY
|
|
|
|
2015
|
|
2016
|
|
Growth
|
|
|
|
Q3
|
|
Q4
|
|
YTD
|
|
Q1
|
|
Q2
|
|
Q3
|
|
YTD
|
|
'15-'16
|
Income from continuing operations
|
|
|
$
|
45,235
|
|
|
$
|
123,231
|
|
|
$
|
389,539
|
|
|
$
|
123,339
|
|
|
$
|
137,849
|
|
|
$
|
150,446
|
|
|
$
|
411,634
|
|
|
233
|
%
|
Income from continuing operations per share
|
|
|
$
|
0.13
|
|
|
$
|
0.37
|
|
|
$
|
1.17
|
|
|
$
|
0.36
|
|
|
$
|
0.40
|
|
|
$
|
0.42
|
|
|
$
|
1.19
|
|
|
223
|
%
|
Discontinued operations
|
|
|
(22,383
|
)
|
|
(2,331
|
)
|
|
11,103
|
|
|
(489
|
)
|
|
(148
|
)
|
|
(118
|
)
|
|
(755
|
)
|
|
|
Gain (loss) on real estate dispositions
|
|
|
265
|
|
|
4,160
|
|
|
18,580
|
|
|
26,184
|
|
|
5,739
|
|
|
(144
|
)
|
|
31,779
|
|
|
|
Net income
|
|
|
23,117
|
|
|
125,060
|
|
|
419,222
|
|
|
149,034
|
|
|
143,440
|
|
|
150,184
|
|
|
442,658
|
|
|
|
Net income attributable to noncontrolling interest
|
|
|
265
|
|
|
332
|
|
|
1,379
|
|
|
54
|
|
|
278
|
|
|
732
|
|
|
1,064
|
|
|
|
Net income attributable to common stockholders 2
|
|
|
$
|
22,852
|
|
|
$
|
124,728
|
|
|
$
|
417,843
|
|
|
$
|
148,980
|
|
|
$
|
143,162
|
|
|
$
|
149,452
|
|
|
$
|
441,594
|
|
|
554
|
%
|
Net income attributable to common stockholders per share 2
|
|
|
$
|
0.07
|
|
|
$
|
0.37
|
|
|
$
|
1.25
|
|
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
$
|
1.28
|
|
|
500
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization on real estate assets
|
|
|
224,688
|
|
|
235,101
|
|
|
887,126
|
|
|
234,726
|
|
|
220,346
|
|
|
206,560
|
|
|
661,632
|
|
|
|
Depreciation on real estate assets related to noncontrolling
interest
|
|
|
(1,964
|
)
|
|
(1,926
|
)
|
|
(7,906
|
)
|
|
(2,075
|
)
|
|
(1,814
|
)
|
|
(1,865
|
)
|
|
(5,754
|
)
|
|
|
Depreciation on real estate assets related to unconsolidated
entities
|
|
|
1,445
|
|
|
2,982
|
|
|
7,353
|
|
|
1,989
|
|
|
1,220
|
|
|
1,113
|
|
|
4,322
|
|
|
|
Loss on re-measurement of equity interest upon acquisition, net
|
|
|
-
|
|
|
176
|
|
|
176
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(Gain) loss on real estate dispositions
|
|
|
(265
|
)
|
|
(4,160
|
)
|
|
(18,580
|
)
|
|
(26,184
|
)
|
|
(5,739
|
)
|
|
144
|
|
|
(31,779
|
)
|
|
|
Loss (gain) on real estate dispositions related to unconsolidated
entities
|
|
|
-
|
|
|
19
|
|
|
19
|
|
|
(536
|
)
|
|
41
|
|
-
|
|
|
(495
|
)
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (gain) on real estate dispositions
|
|
|
48
|
|
|
(2
|
)
|
|
(231
|
)
|
|
-
|
|
|
1
|
|
|
-
|
|
|
1
|
|
|
|
Depreciation and amortization on real estate assets
|
|
|
13,878
|
|
|
-
|
|
|
79,608
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
Subtotal: FFO add-backs
|
|
|
237,830
|
|
|
232,190
|
|
|
947,565
|
|
|
207,920
|
|
|
214,055
|
|
|
205,952
|
|
|
627,927
|
|
|
|
Subtotal: FFO add-backs per share
|
|
|
$
|
0.71
|
|
|
$
|
0.69
|
|
|
$
|
2.84
|
|
|
$
|
0.61
|
|
|
$
|
0.62
|
|
|
$
|
0.58
|
|
|
$
|
1.82
|
|
|
|
FFO (NAREIT) attributable to common stockholders
|
|
|
$
|
260,682
|
|
|
$
|
356,918
|
|
|
$
|
1,365,408
|
|
|
$
|
356,900
|
|
|
$
|
357,217
|
|
|
$
|
355,404
|
|
|
$
|
1,069,521
|
|
|
36
|
%
|
FFO (NAREIT) attributable to common stockholders per share
|
|
|
$
|
0.78
|
|
|
$
|
1.06
|
|
|
$
|
4.09
|
|
|
$
|
1.05
|
|
|
$
|
1.04
|
|
|
$
|
1.00
|
|
|
$
|
3.10
|
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of financial instruments
|
|
|
(18
|
)
|
|
454
|
|
|
460
|
|
|
(79
|
)
|
|
(7
|
)
|
|
14
|
|
|
(72
|
)
|
|
|
Non-cash income tax benefit
|
|
|
(12,477
|
)
|
|
(11,668
|
)
|
|
(42,384
|
)
|
|
(9,157
|
)
|
|
(12,286
|
)
|
|
(9,389
|
)
|
|
(30,832
|
)
|
|
|
Loss (gain) on extinguishment of debt, net
|
|
|
16,301
|
|
|
(486
|
)
|
|
15,797
|
|
|
314
|
|
|
2,468
|
|
|
383
|
|
|
3,165
|
|
|
|
(Gain) loss on non-real estate dispositions related to
unconsolidated entities
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(585
|
)
|
|
28
|
|
|
(557
|
)
|
|
|
Merger-related expenses, deal costs and re-audit costs
|
|
|
100,548
|
|
|
659
|
|
|
152,344
|
|
|
3,254
|
|
|
8,550
|
|
|
16,965
|
|
|
28,769
|
|
|
|
Amortization of other intangibles
|
|
|
438
|
|
|
438
|
|
|
2,058
|
|
|
438
|
|
|
438
|
|
|
438
|
|
|
1,314
|
|
|
|
Subtotal: normalized FFO add-backs
|
|
|
104,792
|
|
|
(10,603
|
)
|
|
128,275
|
|
|
(5,230
|
)
|
|
(1,422
|
)
|
|
8,439
|
|
|
1,787
|
|
|
|
Subtotal: normalized FFO add-backs per share
|
|
|
$
|
0.31
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.38
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
|
Normalized FFO attributable to common stockholders
|
|
|
$
|
365,474
|
|
|
$
|
346,315
|
|
|
$
|
1,493,683
|
|
|
$
|
351,670
|
|
|
$
|
355,795
|
|
|
$
|
363,843
|
|
|
$
|
1,071,308
|
|
|
(0
|
%)
|
Normalized FFO attributable to common stockholders per share
|
|
|
$
|
1.09
|
|
|
$
|
1.03
|
|
|
$
|
4.47
|
|
|
$
|
1.04
|
|
|
$
|
1.04
|
|
|
$
|
1.03
|
|
|
$
|
3.10
|
|
|
(6
|
%)
|
Adjusted: Normalized FFO from CCP Spin-Off
|
|
|
$
|
(35,393
|
)
|
|
$
|
-
|
|
|
$
|
(173,400
|
)
|
|
-
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
Adjusted Normalized FFO per share from CCP Spin-Off
|
|
|
$
|
(0.11
|
)
|
|
$
|
-
|
|
|
$
|
(0.52
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
Comparable Normalized FFO attributable to common stockholders
|
|
|
$
|
330,081
|
|
|
$
|
346,315
|
|
|
$
|
1,320,283
|
|
|
$
|
351,670
|
|
|
$
|
355,795
|
|
|
$
|
363,843
|
|
|
$
|
1,071,308
|
|
|
10
|
%
|
Comparable Normalized FFO attributable to common stockholders
per share
|
|
|
$
|
0.98
|
|
|
$
|
1.03
|
|
|
$
|
3.95
|
|
|
$
|
1.04
|
|
|
$
|
1.04
|
|
|
$
|
1.03
|
|
|
$
|
3.10
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash items included in normalized FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred revenue and lease intangibles, net
|
|
|
(5,682
|
)
|
|
(4,817
|
)
|
|
(24,129
|
)
|
|
(5,037
|
)
|
|
(5,053
|
)
|
|
(5,217
|
)
|
|
(15,307
|
)
|
|
|
Other non-cash amortization, including fair market value of debt
|
|
|
2,142
|
|
|
2,397
|
|
|
5,448
|
|
|
2,446
|
|
|
2,241
|
|
|
2,487
|
|
|
7,174
|
|
|
|
Stock-based compensation
|
|
|
4,869
|
|
|
3,476
|
|
|
19,537
|
|
|
5,029
|
|
|
5,008
|
|
|
5,848
|
|
|
15,885
|
|
|
|
Straight-lining of rental income, net
|
|
|
(8,357
|
)
|
|
(8,674
|
)
|
|
(33,792
|
)
|
|
(9,845
|
)
|
|
(5,581
|
)
|
|
(5,960
|
)
|
|
(21,386
|
)
|
|
|
Subtotal: non-cash items included in normalized FFO
|
|
|
(7,028
|
)
|
|
(7,618
|
)
|
|
(32,936
|
)
|
|
(7,407
|
)
|
|
(3,385
|
)
|
|
(2,842
|
)
|
|
(13,634
|
)
|
|
|
Capital expenditures
|
|
|
(33,536
|
)
|
|
(33,496
|
)
|
|
(112,700
|
)
|
|
(24,987
|
)
|
|
(25,103
|
)
|
|
(29,991
|
)
|
|
(80,081
|
)
|
|
|
Normalized FAD attributable to common stockholders
|
|
|
$
|
324,910
|
|
|
$
|
305,201
|
|
|
$
|
1,348,047
|
|
|
$
|
319,276
|
|
|
$
|
327,307
|
|
|
$
|
331,010
|
|
|
$
|
977,593
|
|
|
2
|
%
|
Adjusted: Normalized FAD from CCP Spin-Off
|
|
|
$
|
(29,987
|
)
|
|
$
|
-
|
|
|
$
|
(155,081
|
)
|
|
$
|
-
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
Comparable Normalized FAD attributable to common stockholders
|
|
|
$
|
294,923
|
|
|
$
|
305,201
|
|
|
$
|
1,192,966
|
|
|
$
|
319,276
|
|
|
$
|
327,307
|
|
|
$
|
331,010
|
|
|
$
|
977,593
|
|
|
12
|
%
|
Merger-related expenses, deal costs and re-audit costs
|
|
|
(100,548
|
)
|
|
(659
|
)
|
|
(152,344
|
)
|
|
(3,254
|
)
|
|
(8,550
|
)
|
|
(16,965
|
)
|
|
(28,769
|
)
|
|
|
FAD attributable to common stockholders
|
|
|
$
|
224,362
|
|
|
$
|
304,542
|
|
|
$
|
1,195,703
|
|
|
$
|
316,022
|
|
|
$
|
318,757
|
|
|
$
|
314,045
|
|
|
$
|
948,824
|
|
|
40
|
%
|
Adjusted: FAD from CCP Spin-Off
|
|
|
$
|
7,204
|
|
|
$
|
2,333
|
|
|
$
|
(108,677
|
)
|
|
$
|
489
|
|
|
$
|
148
|
|
|
$
|
118
|
|
|
$
|
755
|
|
|
|
Comparable FAD attributable to common stockholders
|
|
|
$
|
231,566
|
|
|
$
|
306,875
|
|
|
$
|
1,087,026
|
|
|
$
|
316,511
|
|
|
$
|
318,905
|
|
|
$
|
314,163
|
|
|
$
|
949,579
|
|
|
36
|
%
|
Weighted average diluted shares
|
|
|
336,338
|
|
|
336,406
|
|
|
334,007
|
|
|
339,202
|
|
|
342,571
|
|
|
354,186
|
|
|
345,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Per share amounts may not add due to
rounding. Per share quarterly amounts may not add to annual per
share amounts due to material changes in the Company's weighted
average diluted share count, if any.
|
2 CCP impacts calculated based on net income
related to discontinued operations, less the de minimis share of
discontinued operations net income not related to CCP assets,
assuming (a) G&A of $2.5 million in Q1'15 and Q2'15 ($0.01 per share
per quarter) and $1.3 million in Q3'15 ($0.00 per share) and (b)
interest expense of $6.9 million in Q1'15 and Q2'15 ($0.02 per share
per quarter) and $4.3 million in Q3'15 ($0.01 per share); these
adjustments differ from the respective amounts found in discontinued
operations.
|
|
Historical cost accounting for real estate assets implicitly assumes
that the value of real estate assets diminishes predictably over time.
However, since real estate values historically have risen or fallen with
market conditions, many industry investors deem presentations of
operating results for real estate companies that use historical cost
accounting to be insufficient by themselves. For that reason, the
Company considers FFO, normalized FFO, FAD and normalized FAD to be
appropriate supplemental measures of operating performance of an equity
REIT. In particular, the Company believes that normalized FFO is useful
because it allows investors, analysts and Company management to compare
the Company's operating performance to the operating performance of
other real estate companies and between periods on a consistent basis
without having to account for differences caused by unanticipated items
and other events such as transactions and litigation. In some cases, the
Company provides information about identified non-cash components of FFO
and normalized FFO because it allows investors, analysts and Company
management to assess the impact of those items on the Company's
financial results.
The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net
income attributable to common stockholders (computed in accordance with
GAAP) excluding gains (or losses) from sales of real estate property,
including gain (or loss) on re-measurement of equity method investments,
and impairment write-downs of depreciable real estate, plus real estate
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect FFO on the
same basis. The Company defines normalized FFO as FFO excluding the
following income and expense items (which may be recurring in nature):
(a) merger-related costs and expenses, including amortization of
intangibles, transition and integration expenses, and deal costs and
expenses, including expenses and recoveries relating to acquisition
lawsuits; (b) the impact of any expenses related to asset impairment and
valuation allowances, 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 the Company's debt; (c) the non-cash effect of income tax
benefits or expenses and derivative transactions that have non-cash
mark-to-market impacts on the Company's income statement; (d) the
financial impact of contingent consideration, severance-related costs
and charitable donations made to the Ventas Charitable Foundation; (e)
gains and losses for non-operational foreign currency hedge agreements
and changes in the fair value of financial instruments; (f) gains and
losses on non-real estate dispositions related to unconsolidated
entities; and (g) expenses related to the re-audit and re-review in 2014
of the Company's historical financial statements and related matters.
Normalized FAD represents normalized FFO excluding non-cash components,
straight-line rental adjustments and deducting capital expenditures,
including tenant allowances and leasing commissions. FAD represents
normalized FAD after subtracting merger-related expenses, deal costs and
re-audit costs.
FFO, normalized FFO, FAD and normalized FAD presented herein may not be
identical to those presented by other real estate companies due to the
fact that not all real estate companies use the same definitions. FFO,
normalized FFO, FAD and normalized FAD should not be considered as
alternatives to net income or income from continuing operations (both
determined in accordance with GAAP) as indicators of the Company's
financial performance or as alternatives to cash flow from operating
activities (determined in accordance with GAAP) as measures of the
Company's liquidity, nor are they necessarily indicative of sufficient
cash flow to fund all of the Company's needs. The Company believes that
income from continuing operations is the most comparable GAAP measure
because it provides insight into the Company's continuing operations.
The Company believes that in order to facilitate a clear understanding
of the consolidated historical operating results of the Company, FFO,
normalized FFO, FAD and normalized FAD should be examined in conjunction
with net income and income from continuing operations as presented
elsewhere herein.
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
EPS, FFO and FAD Guidance Attributable to Common Stockholders 1,2
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tentative / Preliminary and Subject to Change
|
|
|
FY2016 - Guidance
|
|
2016 - Per Share
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
$525
|
|
|
$568
|
|
|
$1.51
|
|
|
$1.63
|
|
|
|
|
|
|
|
|
|
|
Adjustments 3
|
|
98
|
|
|
88
|
|
|
0.28
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Common Stockholders
|
|
$623
|
|
|
$656
|
|
|
$1.79
|
|
|
$1.89
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization Adjustments
|
|
901
|
|
|
870
|
|
|
2.59
|
|
|
2.50
|
|
Other Adjustments 3
|
|
(100
|
)
|
|
(90
|
)
|
|
(0.29
|
)
|
|
(0.26
|
)
|
|
|
|
|
|
|
|
|
|
FFO (NAREIT) Attributable to Common Stockholders
|
|
$1,424
|
|
|
$1,436
|
|
|
$4.09
|
|
|
$4.13
|
|
|
|
|
|
|
|
|
|
|
Merger-Related Expenses, Deal Costs and Re-Audit Costs
|
|
29
|
|
|
31
|
|
|
0.08
|
|
|
0.09
|
|
Other Adjustments 3
|
|
(27
|
)
|
|
(31
|
)
|
|
(0.08
|
)
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
Normalized FFO Attributable to Common Stockholders
|
|
$1,426
|
|
|
$1,436
|
|
|
$4.10
|
|
|
$4.13
|
|
% Year-Over-Year Comparable Growth
|
|
|
|
|
|
4
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Included in Normalized FFO
|
|
(16
|
)
|
|
(18
|
)
|
|
|
|
|
Capital Expenditures
|
|
(111
|
)
|
|
(116
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FAD Attributable to Common Stockholders
|
|
$1,299
|
|
|
$1,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-Related Expense, Deal Costs and Re-Audit Costs
|
|
(29
|
)
|
|
(31
|
)
|
|
|
|
|
Other Adjustments 3
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAD Attributable to Common Stockholders
|
|
$1,270
|
|
|
$1,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Diluted Shares
|
|
347,897
|
|
|
347,897
|
|
|
|
|
|
1
|
|
|
The Company's guidance constitutes forward-looking statements
within the meaning of the federal securities laws and is based on
a number of assumptions that are subject to change and many of
which are outside the control of the Company. Actual results may
differ materially from the Company's expectations depending on
factors discussed in the Company's filings with the Securities and
Exchange Commission.
|
2
|
|
|
Totals and per share amounts may not add due to rounding. Per
share quarterly amounts may not add to annual per share amounts
due to changes in the Company's weighted average diluted share
count, if any.
|
3
|
|
|
See table titled "Funds From Operations (FFO) and Funds Available
for Distribution (FAD) Including Comparable Earnings" for detailed
breakout of "adjustments" for each respective category.
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION Net Debt to
Adjusted Pro Forma EBITDA
The following information considers the pro forma effect on net income
attributable to common stockholders of the Company's investments and
other capital transactions that were completed during the three months
ended September 30, 2016, as if the transactions had been consummated as
of the beginning of the period. The following table illustrates net debt
to pro forma earnings before interest, taxes, depreciation and
amortization (including non-cash stock-based compensation expense),
excluding gains or losses on extinguishment of debt, consolidated joint
venture partners' share of EBITDA, merger-related expenses and deal
costs, expenses related to the re-audit and re-review in 2014 of the
Company's historical financial statements, net gains or losses on real
estate activity, gains or losses on re-measurement of equity interest
upon acquisition, changes in the fair value of financial instruments and
unrealized foreign currency gains or losses, and including the Company's
share of EBITDA from unconsolidated entities and adjustments for other
immaterial or identified items (including amounts in discontinued
operations) ("Adjusted Pro Forma EBITDA") (dollars in thousands). The
Company believes that net debt, Adjusted Pro Forma EBITDA and net debt
to Adjusted Pro Forma EBITDA are important supplemental measures in
evaluating the credit strength of the Company and its ability to service
its debt obligations. The Company believes that net debt, Adjusted Pro
Forma EBITDA and net debt to Adjusted Pro Forma EBITDA are useful to
investors, analysts and Company management because they allow the
comparison of the Company's credit strength between periods and to other
real estate companies without the effect of items that by their nature
are not comparable from period to period and tend to obscure the
Company's actual credit quality.
|
|
|
|
|
Income from continuing operations
|
$
|
150,446
|
|
|
Discontinued operations
|
(118
|
)
|
|
Loss on real estate dispositions
|
(144
|
)
|
|
Net income
|
150,184
|
|
|
Net income attributable to noncontrolling interest
|
732
|
|
|
Net income attributable to common stockholders
|
149,452
|
|
|
Pro forma adjustments for current period investments, capital
transactions and dispositions
|
14,323
|
|
|
Pro forma net income attributable to common stockholders for the
three months ended September 30, 2016
|
163,775
|
|
|
Add back:
|
|
|
Interest
|
100,281
|
|
|
Depreciation and amortization
|
204,317
|
|
|
Stock-based compensation
|
5,848
|
|
|
Loss on real estate dispositions
|
145
|
|
|
Loss on extinguishment of debt, net
|
7
|
|
|
(Income) loss from unconsolidated entities, net of Ventas share of
EBITDA from unconsolidated entities
|
5,509
|
|
|
Net income (loss) attributable to noncontrolling interest, net of
consolidated joint venture partners' share of EBITDA
|
(3,076
|
)
|
|
Income tax benefit
|
(8,537
|
)
|
|
Change in fair value of financial instruments
|
12
|
|
|
Unrealized foreign currency gains
|
(359
|
)
|
|
Other taxes
|
597
|
|
|
Merger-related expenses, deal costs and re-audit costs
|
16,489
|
|
|
Adjusted Pro Forma EBITDA
|
485,008
|
|
|
Adjusted Pro Forma EBITDA annualized
|
$
|
1,940,032
|
|
|
|
|
|
As of September 30, 2016:
|
|
|
Debt
|
$
|
11,252,327
|
|
|
Debt on held for sale assets
|
65,981
|
|
|
Cash
|
(89,279
|
)
|
|
Restricted cash pertaining to debt
|
(22,888
|
)
|
|
Consolidated joint venture partners' share of debt
|
(80,938
|
)
|
|
Ventas share of debt from unconsolidated entities
|
116,118
|
|
|
Net debt
|
$
|
11,241,321
|
|
|
|
|
|
Net debt to Adjusted Pro Forma EBITDA
|
5.8
|
|
x
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION NOI and
Same-Store Cash NOI
The Company considers NOI and same-store cash NOI to be important
supplemental measures to net income because they allow investors,
analysts and Company management to assess the Company's unlevered
property-level operating results and to compare the Company's operating
results with the operating results of other real estate companies and
between periods on a consistent basis. The Company defines NOI as total
revenues, less interest and other income, property-level operating
expenses and office building services costs (including amounts in
discontinued operations). Cash receipts may differ due to straight-line
recognition of certain rental income and the application of other GAAP
policies. The Company defines same-store cash NOI as the NOI for
properties owned, consolidated and operational for the full period in
both comparison periods excluding the impact of non-cash items such as
straight-line rent and the impact of exchange rate movements across the
comparison periods. In certain cases, results for same-store cash NOI
may be adjusted to reflect non-recurring items and the receipt of cash
payments and fees not fully recognized as NOI in the period. Same-store
cash NOI excludes assets intended for disposition and, for the SHOP
portfolio, those properties that transitioned operators after the start
of the prior comparison period.
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
|
(Dollars in thousands)
|
|
|
Total Portfolio Same-Store Cash NOI
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
Percentage
|
|
|
|
September 30,
|
|
Increase
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Total Revenues, Excluding Interest and Other Income
|
|
|
$
|
866,554
|
|
|
$
|
827,532
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Total Property-Level Operating Expenses
|
|
|
(361,117
|
)
|
|
(347,845
|
)
|
|
|
Office Building Services Costs
|
|
|
(974
|
)
|
|
(6,416
|
)
|
|
|
Net Operating Income
|
|
|
504,463
|
|
|
473,271
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
NOI Not Included in Same-Store
|
|
|
(47,519
|
)
|
|
(36,759
|
)
|
|
|
Straight-Lining of Rental Income
|
|
|
(5,936
|
)
|
|
(8,353
|
)
|
|
|
Non-Cash Rental Income
|
|
|
(4,709
|
)
|
|
(3,879
|
)
|
|
|
Non-Segment NOI
|
|
|
(32,426
|
)
|
|
(19,453
|
)
|
|
|
Constant Currency Adjustment
|
|
|
-
|
|
|
(845
|
)
|
|
|
|
|
|
(90,590
|
)
|
|
(69,289
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash NOI as Reported
|
|
|
$
|
413,873
|
|
|
$
|
403,982
|
|
|
2.4
|
%
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
|
(Dollars in thousands)
|
|
|
Triple-Net Portfolio Same-Store Cash NOI
|
|
|
|
|
|
For the Three Months Ended
|
|
Percentage
|
|
|
|
September 30,
|
|
Increase
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Total Revenues, Excluding Interest and Other Income
|
|
|
$
|
211,670
|
|
|
$
|
202,039
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Total Property-Level Operating Expenses
|
|
|
-
|
|
|
-
|
|
|
|
Office Building Services Costs
|
|
|
-
|
|
|
-
|
|
|
|
Net Operating Income
|
|
|
211,670
|
|
|
202,039
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
NOI Not Included in Same-Store
|
|
|
(30,893
|
)
|
|
(25,387
|
)
|
|
|
Straight-Lining of Rental Income
|
|
|
(2,607
|
)
|
|
(4,991
|
)
|
|
|
Non-Cash Rental Income
|
|
|
(5,092
|
)
|
|
(4,601
|
)
|
|
|
Constant Currency Adjustment
|
|
|
-
|
|
|
(898
|
)
|
|
|
|
|
|
(38,592
|
)
|
|
(35,877
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash NOI as Reported
|
|
|
$
|
173,078
|
|
|
$
|
166,162
|
|
|
4.2
|
%
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
Senior Housing Operating Portfolio Same-Store Cash NOI
|
|
|
|
|
|
For the Three Months Ended
|
|
Percentage
|
|
|
|
September 30,
|
|
Increase
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Total Revenues, Excluding Interest and Other Income
|
|
|
$
|
461,974
|
|
|
$
|
454,825
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Total Property-Level Operating Expenses
|
|
|
(312,145
|
)
|
|
(304,540
|
)
|
|
|
Office Building Services Costs
|
|
|
-
|
|
|
-
|
|
|
|
Net Operating Income
|
|
|
149,829
|
|
|
150,285
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
NOI Not Included in Same-Store
|
|
|
(3,164
|
)
|
|
(6,505
|
)
|
|
|
Constant Currency Adjustment
|
|
|
-
|
|
|
53
|
|
|
|
|
|
|
(3,164
|
)
|
|
(6,452
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash NOI as Reported
|
|
|
$
|
146,665
|
|
|
$
|
143,833
|
|
|
2.0
|
%
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
Office Portfolio Same-Store Cash NOI
|
|
|
|
|
|
For the Three Months Ended
|
|
Percentage
|
|
|
|
September 30,
|
|
Increase
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Total Revenues, Excluding Interest and Other Income
|
|
|
$
|
160,484
|
|
|
$
|
151,214
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Total Property-Level Operating Expenses
|
|
|
(48,972
|
)
|
|
(43,305
|
)
|
|
|
Office Building Services Costs
|
|
|
(974
|
)
|
|
(6,416
|
)
|
|
|
Net Operating Income
|
|
|
110,538
|
|
|
101,493
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
NOI Not Included in Same-Store
|
|
|
(13,463
|
)
|
|
(4,867
|
)
|
|
|
Straight-Lining of Rental Income
|
|
|
(3,329
|
)
|
|
(3,363
|
)
|
|
|
Non-Cash Rental Income
|
|
|
383
|
|
|
722
|
|
|
|
|
|
|
(16,409
|
)
|
|
(7,508
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash NOI as Reported
|
|
|
$
|
94,129
|
|
|
$
|
93,985
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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