Company Announcements

Healthpeak Properties™ Reports Second Quarter 2020 Results

IRVINE, Calif., Aug. 4, 2020 /PRNewswire/ -- Healthpeak Properties, Inc. (NYSE: PEAK) today announced results for the second quarter ended June 30, 2020. For the quarter, we generated net income of $0.09 per share, NAREIT FFO of $0.34 per share, FFO as Adjusted of $0.40 per share and blended Total Same-Store Portfolio Cash NOI results of (2.2%).

 SECOND QUARTER 2020 FINANCIAL PERFORMANCE AND RECENT HIGHLIGHTS 

–   The COVID-19 pandemic continues to evolve rapidly. In order to provide more up-to-date information about the impact of COVID-19 on Healthpeak, we have included certain key operating metrics through July 2020 in this release.

–   Balance sheet and liquidity:

  • In June 2020, issued $600 million of 2.875% senior unsecured notes due 2031 and used proceeds to redeem all of Healthpeak's outstanding $300 million 3.150% senior unsecured notes due August 2022 and to repurchase $250 million of Healthpeak's 4.250% senior unsecured notes due November 2023, pursuant to a tender offer completed in June 2020. Healthpeak incurred losses on debt extinguishment of $26 million in June and approximately $18 million in July in connection with the refinancings. Following these transactions, Healthpeak has no material scheduled debt maturities until November 2023.
  • As of July 31, 2020, had $2.85 billion of liquidity including full availability on Healthpeak's $2.5 billion revolving credit facility and approximately $350 million of cash and cash equivalents.

–   Transactions:

  • In June 2020, closed on the previously announced sale of the three Frost Street medical office buildings in San Diego, CA, generating proceeds of approximately $106 million, representing a cash capitalization rate of 6.0%.
  • In April 2020, closed on the previously announced $320 million life science acquisition of The Post, a 426,000 square foot life science property located within the Route 128 submarket of Boston, Massachusetts. The stabilized cash and GAAP capitalization rates are 5.1% and 6.5%, respectively.

–   Development completion:

  • Delivered a 52,000 square foot, three-story Class A medical office building, located on HCA's campus of Lee's Summit Medical Center, in Lee's Summit, Missouri. The development was 51% leased to HCA upon delivery.

–   Development leasing:

  • In July 2020, signed two leases totaling 60,000 square feet, with a weighted average lease term of 8.5 years, bringing the 75 Hayden Avenue development to 100% leased. The project is expected to be completed and delivered in the third quarter of 2021.
  • In June 2020, signed a 17-year lease with a full-building user totaling 74,000 square feet at our Boardwalk development project in San Diego, California. The 190,000 square foot Class A, three-building development is now 39% pre-leased.

–   Declared quarterly common stock cash dividend of $0.37 per share to be paid on August 25, 2020, to stockholders of record as of the close of business on August 14, 2020.

–   Published 9th annual ESG Report covering 2019 environmental, social and governance (ESG) initiatives and progress; and named to Corporate Responsibility Magazine's 100 Best Corporate Citizens List for the second consecutive year.

SECOND QUARTER COMPARISON


Three Months Ended
June 30, 2020


Three Months Ended
June 30, 2019


(in thousands, except per share amounts)

Amount


Per Share


Amount


Per Share


Net income (loss), diluted

$

51,131



$

0.09



$

(13,991)



$

(0.03)



NAREIT FFO, diluted

182,367



0.34



199,906



0.41



FFO as Adjusted, diluted

216,547



0.40



214,385



0.44



AFFO, diluted

193,790





196,551





NAREIT FFO, FFO as Adjusted, AFFO, Same-Store Cash NOI, Net Debt and Adjusted EBITDAre are supplemental non-GAAP financial measures that we believe are useful in evaluating the operating performance and financial position of real estate investment trusts (see the "Funds From Operations" and "Adjusted Funds From Operations" sections of this release for additional information). See "June 30, 2020 Discussion and Reconciliation of Non-GAAP Financial Measures" for definitions, discussions of their uses and inherent limitations, and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP on the Investor Relations section of our website at http://ir.healthpeak.com/quarterly-results.

SAME-STORE ("SS") OPERATING SUMMARY

The table below outlines the year-over-year three-month and year-to-date SS Cash NOI growth: 

Year-Over-Year Total SS Portfolio Cash NOI Growth



Three Month

Year-To-Date

% of SS


Medical office

1.3%

1.8%

42.5%


Life science

7.3%

5.3%

34.6%


Senior housing(1)(2)

(21.2)%

(6.2)%

19.2%


Other non-reportable segments ("Other")

2.9%

4.1%

3.8%


Total Portfolio(1)(2)

(2.2%)

1.4%

100.0%





(1)

Same-Store year-over-year three-month Portfolio Cash NOI growth includes government grants under the CARES Act of $1.9 million and identifiable COVID-19 expenses of $6.3 million in the SHOP portfolio.


(2)

Same-Store year-over-year year-to-date Portfolio Cash NOI growth includes government grants under the CARES Act of $0.4 million and identifiable COVID-19 expenses of $4.1 million in the SHOP portfolio.


 

JULY 2020 PRELIMINARY UPDATES (Life Science, Medical Office and Hospitals)

July 2020 data is based on preliminary information and is subject to change. (SF = square feet)

Indicator

As of, or for the month ended, July 31, 2020
(unless otherwise noted)

Commentary

LIFE SCIENCE

Occupancy

96.3%

Down 60 bps since June 30 due to known vacates

Leasing

102,000 SF of executed leases (82,000 SF of new leasing)

Year-to-date ahead of original expectations

Letters of Intent

169,000 SF of executed LOIs in lease documentation (78,000 SF of new leasing)

96% of new leasing commitments driven by existing tenants looking to expand

July Rent Payments

99% received

Ahead of June collections

Rent Relief Requests

No new material requests in July

In June, finalized short-term deferrals with 2 tenants totaling approximately $1 million




MEDICAL OFFICE

Occupancy

91.1%

Unchanged from June 30

Leasing

230,000 SF of executed leases (28,000 SF of new leasing)

Year-to-date ahead of original expectations

Letters of Intent

367,000 SF of executed LOIs in lease documentation (121,000 SF of new leasing)

Slightly lower than monthly average but YTD above 2019

July Rent Payments

98% of contractual rents received

Deferral program represents previously announced program done in conjunction with HCA

Rent Deferral Payments

96% of rent deferrals due in July have been paid

$6 million in total rent deferrals (267 tenants); $1 million to be paid back per month




HOSPITALS

July Rent Payments

100% received


 

JULY 2020 PRELIMINARY UPDATES (Senior Housing)

July 2020 data is based on preliminary information and is subject to change. (SF = square feet)

Indicator

As of, or for the month ended, July 31, 2020
(unless otherwise noted)

Commentary

SENIOR HOUSING: SHOP (1)(2)(3)

Occupancy

Spot occupancy (July 31): 77.8%
Average Daily Census (July): 77.8%

Spot declined 110 bps vs. June 30
Average Daily Census declined 50 bps vs. June

Move-ins

Declined 62% vs. July 2019; Declined 32% vs. June 2020

86% of our properties are now accepting move-ins

Move-outs

Declined 19% vs. July 2019; Declined 1% vs. June 2020

July is the third consecutive month move-outs declined

Leads

Declined 31% vs. July 2019; Declined 2% vs. June 2020

Operators continue to prioritize digital marketing platforms

Tours

Declined 52% vs. July 2019; Declined 8% vs. June 2020

Tours were almost entirely virtual / digital




SENIOR HOUSING: CCRC (1)(2)(3)


Spot Occupancy
(July 31)

Average Daily Census
(July)


IL/AL/MC Occupancy 

82.7%

82.9%


SNF Occupancy 

62.7%

60.2%

Total spot occupancy decreased 20 bps vs. June 30

Total Occupancy

79.3%

79.1%

Total average daily census declined 40 bps vs. June

IL/AL/MC Move-ins

Declined 78% vs. July 2019; Declined 72% vs. June 2020

93% of our IL/AL/MC properties are now accepting move-ins. For CCRCs the last month of a quarter is typically a stronger leasing month

IL/AL/MC Move-outs

Declined 28% vs. July 2019; Declined 12% vs. June 2020

July is the second consecutive month move-outs declined

IL/AL/MC Leads

Declined 17% vs. July 2019; Declined 2% vs. June 2020

Operators continue to prioritize digital marketing platforms

IL/AL/MC Tours

Increased 43% vs. July 2019; Increased 94% vs. June 2020

Tours were almost entirely virtual / digital




SENIOR HOUSING (SHOP and CCRC) EXPENSE UPDATE

Q2 2020 Expense Results
(July not yet available)

The COVID-19 impact on total expenses was ~1.6%

Second quarter total expenses were incrementally ~1.6% higher than original 2020 expectations, which is below the low end of the outlook range of 5-15% provided in May. COVID-19 related expenses were in-line with expectations, with the favorable expense variance driven by lower than expected compensation, marketing and repairs and maintenance.

SENIOR HOUSING: NNN TENANT UPDATES

July Rent Payments

97% received + 3% deferred





SENIOR HOUSING: KNOWN COVID-19 POSITIVE CASES

Based on the reports Healthpeak receives from its operators across 218 properties, as of July 31, 2020, Healthpeak had 111 properties managed by 15 different operators with confirmed resident COVID-19 cases, and 59 of those affected properties had experienced resident deaths.

New COVID positive resident cases in our senior housing facilities as of late July have declined by more than 50% from the peak in mid-April. 80 of our 111 COVID-19 resident positive properties are 14 or more days from the most recent exposure.








(1)

Properties that are held for sale, in redevelopment or in development are excluded from reporting statistics.


(2)

Move-in and move-out data exclude skilled nursing beds in our SHOP and CCRC portfolios given the Medicare residents usually have lengths of stay of 30 days or less.


(3)

Skilled nursing units in our portfolio received $14.9 million of Coronavirus Aid, Relief, and Economic Security ("CARES") Act funding in 2Q20. This represents pro rata funding provided to all Medicare providers.


 

2020 OUTLOOK UPDATE

Please see pages 44 - 46 in the Second Quarter 2020 Supplemental Report for a revised outlook and earnings framework.

COMPANY INFORMATION

Healthpeak has scheduled a conference call and webcast for Wednesday, August 5, 2020, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to present its performance and operating results for the second quarter ended June 30, 2020. The conference call is accessible by dialing (888) 317-6003 (U.S.) or (412) 317-6061 (international). The conference ID number is 3883068. You may also access the conference call via webcast in the Investor Relations section of our website at http://ir.healthpeak.com. An archive of the webcast will be available on Healthpeak's website through August 5, 2021, and a telephonic replay can be accessed through August 12, 2020, by dialing (877) 344-7529 (U.S.) or (412) 317-0088 (international) and entering conference ID number 10145906. Our Supplemental Report for the current period is also available, with this earnings release, in the Investor Relations section of our website.

ABOUT HEALTHPEAK

Healthpeak Properties, Inc. is a fully integrated real estate investment trust (REIT) and S&P 500 company. Healthpeak owns and develops high-quality real estate in the three private-pay healthcare asset classes of Life Science, Senior Housing and Medical Office, designed to provide stability through the inevitable industry cycles.  At Healthpeak, we pair our deep understanding of the healthcare real estate market with a strong vision for long-term growth. For more information regarding Healthpeak, visit www.healthpeak.com.


FORWARD-LOOKING STATEMENTS

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements include, among other things, statements regarding our and our officers' intent, belief or expectation as identified by the use of words such as "may," "will," "project," "expect," "believe," "intend," "anticipate," "seek," "target," "forecast," "plan," "potential," "estimate," "could," "would," "should" and other comparable and derivative terms or the negatives thereof.  Examples of forward-looking statements include, among other things: (i) statements regarding timing, outcomes and other details relating to current, pending or contemplated acquisitions, dispositions, transitions, developments, redevelopments, joint venture transactions, leasing activity, capital recycling plans, financing activities, or other transactions discussed in this release; (ii) the payment of a quarterly cash dividend; and (iii) statements regarding the impact of the COVID-19 pandemic on our business, financial condition and results of operations. Forward-looking statements reflect our current expectations and views about future events and are subject to risks and uncertainties that could significantly affect our future financial condition and results of operations.  While forward-looking statements reflect our good faith belief and assumptions we believe to be reasonable based upon current information, we can give no assurance that our expectations or forecasts will be attained.  Further, we cannot guarantee the accuracy of any such forward-looking statement contained in this release, and such forward-looking statements are subject to known and unknown risks and uncertainties that are difficult to predict. These risks and uncertainties include, but are not limited to: the severity and duration of the COVID-19 pandemic; actions that have been taken and may continue to be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the impact of the COVID-19 pandemic and health and safety measures taken to reduce the spread; operational risks associated with third party management contracts, including the additional regulation and liabilities of our RIDEA lease structures; the ability of our existing and future tenants, operators and borrowers to conduct their respective businesses in a manner sufficient to maintain or increase their revenues and manage their expenses in order to generate sufficient income to make rent and loan payments to us and our ability to recover investments made, if applicable, in their operations; the imposition of laws or regulations prohibiting the eviction of our tenants, including new governmental efforts in response to COVID-19; the financial condition of our existing and future tenants, operators and borrowers, including potential bankruptcies and downturns in their businesses, and their legal and regulatory proceedings, which results in uncertainties regarding our ability to continue to realize the full benefit of such tenants' and operators' leases and borrowers' loans; our concentration in the healthcare property sector, particularly in senior housing, life sciences and medical office buildings, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the effect on us and our tenants and operators of legislation, executive orders and other legal requirements, including compliance with the Americans with Disabilities Act, fire, safety and health regulations, environmental laws, the Affordable Care Act, licensure, certification and inspection requirements, and laws addressing entitlement programs and related services, including Medicare and Medicaid, which may result in future reductions in reimbursements or fines for noncompliance; our ability to identify replacement tenants and operators and the potential renovation costs and regulatory approvals associated therewith; the risks associated with property development and redevelopment, including costs above original estimates, project delays and lower occupancy rates and rents than expected; the potential impact of uninsured or underinsured losses, including as a result of hurricanes, earthquakes and other natural disasters, pandemics such as COVID-19, acts of war and/or terrorism and other events that may cause such losses and/or performance declines by us or our tenants and operators; the risks associated with our investments in joint ventures and unconsolidated entities, including our lack of sole decision making authority and our reliance on our partners' financial condition and continued cooperation; competition for the acquisition and financing of suitable healthcare properties as well as competition for tenants and operators, including with respect to new leases and mortgages and the renewal or rollover of existing leases; our or our counterparties' ability to fulfill obligations, such as financing conditions and/or regulatory approval requirements, required to successfully consummate acquisitions, dispositions, transitions, developments, redevelopments, joint venture transactions or other transactions; our ability to achieve the benefits of acquisitions or other investments within expected time frames or at all, or within expected cost projections; the potential impact on us and our tenants, operators and borrowers from current and future litigation matters, including the possibility of larger than expected litigation costs, adverse results and related developments; changes in federal, state or local laws and regulations, including those affecting the healthcare industry that affect our costs of compliance or increase the costs, or otherwise affect the operations, of our tenants and operators; our ability to foreclose on collateral securing our real estate-related loans; volatility or uncertainty in the capital markets, the availability and cost of capital as impacted by interest rates, changes in our credit ratings, the value of our common stock, and other conditions that may adversely impact our ability to fund our obligations or consummate transactions, or reduce the earnings from potential transactions; changes in global, national and local economic and other conditions, including the ongoing economic downturn, volatility in the financial markets and high unemployment rates; our ability to manage our indebtedness level and changes in the terms of such indebtedness; competition for skilled management and other key personnel;  our reliance on information technology systems and the potential impact of system failures, disruptions or breaches; our ability to maintain our qualification as a real estate investment trust; and other risks and uncertainties described from time to time in our Securities and Exchange Commission filings.  Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made. 

CONTACT

Barbat Rodgers
Senior Director – Investor Relations
949-407-0400

 

Healthpeak Properties, Inc.


Consolidated Balance Sheets


In thousands, except share and per share data


(unaudited)





June 30, 2020


December 31, 2019


Assets





Real estate:





Buildings and improvements

$

12,841,242



$

11,120,039



Development costs and construction in progress

678,146



692,336



Land

2,113,871



1,992,602



Accumulated depreciation and amortization

(2,846,260)



(2,771,922)



Net real estate

12,786,999



11,033,055



Net investment in direct financing leases

44,706



84,604



Loans receivable, net of reserves of $14,115 and $0

253,774



190,579



Investments in and advances to unconsolidated joint ventures

460,386



825,515



Accounts receivable, net of allowance of $9,487 and $4,565

73,432



59,417



Cash and cash equivalents

730,957



144,232



Restricted cash

105,684



40,425



Intangible assets, net

537,555



331,693



Assets held for sale, net

378,708



504,394



Right-of-use asset, net

193,729



172,486



Other assets, net

750,510



646,491



Total assets

$

16,316,440



$

14,032,891








Liabilities and Equity





Bank line of credit and commercial paper

$



$

93,000



Term loan

249,062



248,942



Senior unsecured notes

5,992,193



5,647,993



Mortgage debt

487,532



276,907



Intangible liabilities, net

110,732



74,991



Liabilities of assets held for sale, net

32,648



36,369



Lease liability

177,029



156,611



Accounts payable, accrued liabilities, and other liabilities

847,080



540,924



Deferred revenue

751,443



289,680



Total liabilities

8,647,719



7,365,417



Commitments and contingencies





Common stock, $1.00 par value: 750,000,000 shares authorized; 538,317,896 and 505,221,643 shares issued and outstanding

538,318



505,222



Additional paid-in capital

10,222,728



9,183,892



Cumulative dividends in excess of earnings

(3,660,187)



(3,601,199)



Accumulated other comprehensive income (loss)

(2,186)



(2,857)



Total stockholders' equity

7,098,673



6,085,058








Joint venture partners

370,347



378,061



Non-managing member unitholders

199,701



204,355



Total noncontrolling interests

570,048



582,416



Total equity

7,668,721



6,667,474








Total liabilities and equity

$

16,316,440



$

14,032,891




 

Healthpeak Properties, Inc.


Consolidated Statements of Operations


In thousands, except per share data


(unaudited)





Three Months Ended
June 30,


Six Months Ended
June 30,



2020


2019


2020


2019


Revenues:









Rental and related revenues

$

312,363



$

301,197



$

627,051



$

595,419



Resident fees and services

269,697



177,766



533,202



304,461



Income from direct financing leases

2,150



10,190



5,419



23,714



Interest income

4,230



2,414



7,918



4,127



Total revenues

588,440



491,567



1,173,590



927,721












Costs and expenses:









Interest expense

57,550



56,942



115,926



106,269



Depreciation and amortization

178,488



165,296



367,764



297,247



Operating

315,841



213,993



691,854



382,920



General and administrative

23,720



27,120



46,069



48,475



Transaction costs

627



1,337



15,475



5,855



Impairments and loan loss reserves (recoveries), net

24,050



68,538



63,173



77,396



Total costs and expenses

600,276



533,226



1,300,261



918,162



Other income (expense):









Gain (loss) on sales of real estate, net

82,863



11,448



247,732



19,492



Loss on debt extinguishments

(25,824)



(1,135)



(24,991)



(1,135)



Other income (expense), net

19,586



21,008



230,194



24,141



Total other income (expense), net

76,625



31,321



452,935



42,498












Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures

64,789



(10,338)



326,264



52,057



Income tax benefit (expense)

7,346



1,864



40,390



5,322



Equity income (loss) from unconsolidated joint ventures

(17,086)



(1,506)



(29,065)



(2,369)












Net income (loss)

55,049



(9,980)



337,589



55,010



Noncontrolling interests' share in earnings

(3,543)



(3,617)



(7,003)



(7,137)



Net income (loss) attributable to Healthpeak Properties, Inc.

51,506



(13,597)



330,586



47,873



Participating securities' share in earnings

(375)



(394)



(1,800)



(837)



Net income (loss) applicable to common shares

$

51,131



$

(13,991)



$

328,786



$

47,036












Earnings per common share:









Basic

$

0.09



$

(0.03)



$

0.63



$

0.10



Diluted

$

0.09



$

(0.03)



$

0.63



$

0.10












Weighted average shares outstanding:









Basic

538,262



478,739



522,427



478,260



Diluted

538,517



478,739



523,498



479,885




 

Healthpeak Properties, Inc.


Funds From Operations


In thousands, except per share data


(unaudited)






Three Months Ended
June 30,


Six Months Ended
June 30,




2020


2019


2020


2019


Net income (loss) applicable to common shares


$

51,131



$

(13,991)



$

328,786



$

47,036



Real estate related depreciation and amortization


178,488



165,296



367,764



297,247



Healthpeak's share of real estate related depreciation and amortization from unconsolidated joint ventures


25,618



15,123



55,228



30,200



Noncontrolling interests' share of real estate related depreciation and amortization


(4,980)



(5,013)



(10,023)



(9,934)



Other real estate-related depreciation and amortization


891



1,357



2,128



3,442



Loss (gain) on sales of real estate, net


(82,863)



(11,448)



(247,732)



(19,492)



Healthpeak's share of loss (gain) on sales of real estate, net, from unconsolidated joint ventures


(1,519)





(9,248)





Noncontrolling interests' share of gain (loss) on sales of real estate, net


(3)



208



(3)



208



Loss (gain) upon change of control, net(1)


(2,528)



(11,501)



(169,962)



(11,501)



Taxes associated with real estate dispositions


335





(11,540)





Impairments (recoveries) of depreciable real estate, net


17,797



58,391



48,519



67,249



NAREIT FFO applicable to common shares


182,367



198,422



353,917



404,455



Distributions on dilutive convertible units and other




1,484



3,501



3,279



Diluted NAREIT FFO applicable to common shares


$

182,367



$

199,906



$

357,418



$

407,734



Diluted NAREIT FFO per common share


$

0.34



$

0.41



$

0.68



$

0.84



Weighted average shares outstanding - diluted NAREIT FFO


538,517



485,054



529,009



484,435



Impact of adjustments to NAREIT FFO:










Transaction-related items(2)


$

685



$

6,435



$

93,064



$

12,324



Other impairments (recoveries) and other losses (gains), net(3)


6,291



10,147



(27,015)



10,147



Severance and related charges




3,728





3,728



Loss on debt extinguishments(4)


25,824



1,135



24,991



1,135



Litigation costs (recoveries)


100



(527)



206



(399)



Casualty-related charges (recoveries), net(5)




(6,242)





(6,242)



Foreign currency remeasurement losses (gains)


143



(159)



153



(187)



Tax rate legislation impact(6)


(697)





(3,589)





Total adjustments


32,346



14,517



87,810



20,506



FFO as Adjusted applicable to common shares


214,713



212,939



441,727



424,961



Distributions on dilutive convertible units and other


1,834



1,446



3,390



3,226



Diluted FFO as Adjusted applicable to common shares


$

216,547



$

214,385



$

445,117



$

428,187



Diluted FFO as Adjusted per common share


$

0.40



$

0.44



$

0.84



$

0.88



Weighted average shares outstanding - diluted FFO as Adjusted


544,018



485,054



529,009



484,435




_______________________________________

(1)

For the six months ended June 30, 2020, relates to the gain on consolidation of 13 continuing care retirement communities ("CCRCs") in which we acquired Brookdale's interest and began consolidating during the first quarter of 2020. For the three and six months ended June 30, 2019, represents the gain related to the acquisition of the outstanding equity interests in a previously unconsolidated senior housing joint venture. Gains upon change of control are included in other income (expense), net in the consolidated statements of operations.

(2)

For the 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 LCS, partially offset by the tax benefit recognized related to those expenses. The expense related to terminating the CCRC management agreements with Brookdale is included in operating expenses in the consolidated statement of operations for the six months ended June 30, 2020.

(3)

For the three months ended June 30, 2020, represents additional reserves for loan losses under the current expected credit losses accounting standard in accordance with Accounting Standards Codification 326, Financial Instruments – Credit Losses ("ASC 326") and the impairment of an undeveloped MOB land parcel, which is classified as held-for-sale. The six months ended June 30, 2020 also includes additional reserves for loan losses under ASC 326 and a gain on sale of a hospital that was in a direct financing lease ("DFL"). For the three and six months ended June 30, 2019, represents the impairment of 13 senior housing triple-net facilities under DFLs recognized as a result of entering into sales agreements.

(4)

For all periods presented, primarily represents the premium associated with the prepayment of senior unsecured notes and mortgage debt.

(5)

For the three and six months ended June 30, 2019, represents incremental insurance proceeds received for property damage and other associated costs related to hurricanes in 2017.

(6)

For the three and six months ended June 30, 2020, represents the tax benefit of the CARES Act extending the net operating loss carryback period to five years. 


 

Healthpeak Properties, Inc.


Adjusted Funds From Operations


In thousands


(unaudited)





Three Months Ended
June 30,


Six Months Ended
June 30,



2020


2019


2020


2019


FFO as Adjusted applicable to common shares

$

214,713



$

212,939



$

441,727



$

424,961



Amortization of deferred compensation

4,984



4,308



8,972



7,898



Amortization of deferred financing costs

2,534



2,740



5,116



5,440



Straight-line rents

(8,316)



(5,695)



(14,544)



(11,940)



AFFO capital expenditures

(18,781)



(19,513)



(40,572)



(38,733)



Lease restructure payments

328



292



619



580



CCRC entrance fees(1)



4,845





8,340



Deferred income taxes

(6,686)



(3,897)



(1,899)



(7,629)



Other AFFO adjustments(2)

3,150



(952)



109



(2,381)



AFFO applicable to common shares

191,926



195,067



399,528



386,536



Distributions on dilutive convertible units and other

1,864



1,484



3,501



3,278



Diluted AFFO applicable to common shares

$

193,790



$

196,551



$

403,029



$

389,814



Weighted average shares outstanding - diluted AFFO

544,018



485,054



529,009



484,435





 _______________________________________


(1)

In connection with the acquisition of the remaining 51% interest in the CCRC JV in January 2020, we consolidated the 13 communities in the CCRC JV and recorded the assets and liabilities at their acquisition date relative fair values, including the CCRC contract liabilities associated with previously collected non-refundable entrance fees. In conjunction with increasing those CCRC contract liabilities to their fair value, we concluded that we will no longer adjust for the timing difference between non-refundable entrance fees collected and amortized as we believe the amortization of these fees is a meaningful representation of how we satisfy the performance obligations of the fees. As such, upon consolidation of the CCRC assets, we no longer exclude the difference between CCRC entrance fees collected and amortized from the calculation of AFFO. For comparative periods presented, the adjustment continues to represent our 49% share of non-refundable entrance fees collected by the CCRC JV, net of reserves and net of CCRC JV entrance fee amortization.


(2)

Primarily includes our share of AFFO capital expenditures from unconsolidated joint ventures, partially offset by noncontrolling interests' share of AFFO capital expenditures from consolidated joint ventures.


 

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SOURCE Healthpeak Properties, Inc.