Exhibit 99.3
 
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Discussion and

Reconciliation of Non-

GAAP Financial Measures
 
June 30, 2020
 
 
 
 
 
(Unaudited)


Definitions

Adjusted Fixed Charge Coverage  Adjusted EBITDAre divided by Fixed Charges. Adjusted Fixed Charge Coverage is a supplemental measure of liquidity and our ability to meet interest payments on our outstanding debt and pay dividends to our preferred stockholders, if applicable. Our various debt agreements contain covenants that require us to maintain ratios similar to Adjusted Fixed Charge Coverage and credit rating agencies utilize similar ratios in evaluating and determining the credit rating on certain of our debt instruments. Adjusted Fixed Charge Coverage is subject to the same limitations and qualifications as Adjusted EBITDAre and Fixed Charges.
Adjusted Funds Available for Distribution (“AFFO”) AFFO is defined as FFO as Adjusted after excluding the impact of the following: (i) amortization of deferred compensation expense, (ii) amortization of deferred financing costs, net, (iii) straight-line rents, (iv) deferred income taxes, (v) amortization of acquired market lease intangibles, net, (vi) non-cash interest related to DFLs and lease incentive amortization (reduction of straight-line rents), (vii) actuarial reserves for insurance claims that have been incurred but not reported, and (viii) deferred revenues, excluding amounts amortized into rental income that are associated with tenant funded improvements owned/recognized by us and up-front cash payments made by tenants to reduce their contractual rents. Also, AFFO: (i) is computed after deducting recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements and (ii) includes lease restructure payments and adjustments to compute our share of AFFO from our unconsolidated joint ventures. Certain prior period amounts in the “Non-GAAP Financial Measures Reconciliation” below for AFFO have been reclassified to conform to the current period presentation. More specifically, recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements ("AFFO capital expenditures") excludes our share from unconsolidated joint ventures (reported in “other AFFO adjustments”). Adjustments for joint ventures are calculated to reflect our pro-rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of AFFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated joint ventures in which we do not own 100% of the equity by adjusting our AFFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods (reported in “other AFFO adjustments”). See FFO for further disclosure regarding our use of pro-rata share information and its limitations. Other REITs or real estate companies may use different methodologies for calculating AFFO, and accordingly, our AFFO may not be comparable to those reported by other REITs. Although our AFFO computation may not be comparable to that of other REITs, management believes AFFO provides a meaningful supplemental measure of our performance and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. We believe AFFO is an alternative run-rate earnings measure that improves the understanding of our operating results among investors and makes comparisons with: (i) expected results, (ii) results of previous periods, and (iii) results among REITs more meaningful. AFFO does not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as it excludes the following items which generally flow through our cash flows from operating activities: (i) adjustments for changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, (ii) transaction-related costs, (iii) litigation settlement expenses, (iv) severance-related expenses, and (v) actual cash receipts from interest income recognized on loans receivable (in contrast to our AFFO adjustment to exclude non-cash interest and depreciation related to our investments in direct financing leases). Furthermore, AFFO is adjusted for recurring capital expenditures, which are generally not considered when determining cash flows from operations or liquidity. AFFO is a non-GAAP supplemental financial measure and should not be considered as an alternative to net income (loss) determined in accordance with GAAP.
Consolidated Debt The carrying amount of bank line of credit, commercial paper, term loans, senior unsecured notes, and mortgage debt, as reported in our consolidated financial statements.
Consolidated Gross Assets The carrying amount of total assets, excluding investments in and advances to our unconsolidated JVs, after adding back accumulated depreciation and amortization, as reported in our consolidated financial statements. Consolidated Gross Assets is a supplemental measure of our financial position, which, when used in conjunction with debt-related measures, enables both management and investors to analyze our leverage and to compare our leverage to that of other companies.
Consolidated Secured Debt Mortgage and other debt secured by real estate, as reported in our consolidated financial statements.
Continuing Care Retirement Community (“CCRC”) A senior housing facility which provides at least three levels of care (i.e., independent living, assisted living and skilled nursing).
Debt Investments Loans secured by a direct interest in real estate and mezzanine loans.
Direct Financing Lease ("DFL") Lease for which future minimum lease payments are recorded as a receivable and the difference between the future minimum lease payments and the estimated residual values less the cost of the properties is recorded as unearned income. Unearned income is deferred and amortized to income over the lease terms to provide a constant yield.

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Definitions

EBITDAre and Adjusted EBITDAre EBITDAre, or EBITDA for Real Estate, is a supplemental performance measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and intended for real estate companies. It represents earnings before interest expense, income taxes, depreciation and amortization, gains or losses from sales of depreciable property (including gains or losses on change in control), and impairment charges (recoveries) related to depreciable property. Adjusted EBITDAre is defined as EBITDAre excluding impairments (recoveries) related to non-depreciable assets, transaction-related items, prepayment costs (benefits) associated with early retirement or payment of debt, severance and related charges, litigation costs (recoveries), casualty-related charges (recoveries), stock compensation expense, and foreign currency remeasurement losses (gains). EBITDAre and Adjusted EBITDAre include our pro rata share of our unconsolidated JVs presented on the same basis. We consider EBITDAre and Adjusted EBITDAre important supplemental measures to net income (loss) because they provide an additional manner in which to evaluate our operating performance and serve as additional indicators of our ability service our debt obligations. Net income (loss) is the most directly comparable U.S. generally accepted accounting principles (“GAAP”) measure to EBITDAre and Adjusted EBITDAre.
Enterprise Debt Consolidated Debt plus our pro rata share of total debt from our unconsolidated JVs. Enterprise Debt is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share of total debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Enterprise Gross Assets Consolidated Gross Assets plus our pro rata share of total gross assets from our unconsolidated JVs, after adding back accumulated depreciation and amortization. Enterprise Gross Assets is a supplemental measure of our financial position, which, when used in conjunction with debt-related measures, enables both management and investors to analyze our leverage and to compare our leverage to that of other companies.
Enterprise Secured Debt Consolidated Secured Debt plus our pro rata share of mortgage debt from our unconsolidated JVs. Enterprise Secured Debt is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share of Enterprise Secured Debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Entrance Fee Certain of our communities have residency agreements which require the resident to pay an upfront entrance fee prior to taking occupancy at the community. For net income, NOI, Adjusted NOI, NAREIT FFO, FFO as Adjusted, and AFFO, the non-refundable portion of the entrance fee is recorded as deferred entrance fee revenue and amortized over the estimated stay of the resident based on an actuarial valuation. The refundable portion of a resident’s entrance fee is generally refundable within a certain number of months or days following contract termination or upon the sale of the unit. All refundable amounts due to residents at any time in the future are classified as liabilities.
Financial Leverage Enterprise Debt divided by Enterprise Gross Assets. Financial Leverage is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share information is calculated by applying our actual ownership percentage for the period and excludes debt funded by us to our JVs. Our pro rata share of total debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Fixed Charges Total interest expense plus capitalized interest plus preferred stock dividends (if applicable). Fixed Charges also includes our pro rata share of the interest expense plus capitalized interest plus preferred stock dividends (if applicable) of our unconsolidated JVs. Fixed Charges is a supplemental measure of our interest payments on outstanding debt and dividends to preferred stockholders for purposes of presenting Fixed Charge Coverage and Adjusted Fixed Charge Coverage. Fixed Charges is subject to limitations and qualifications, as, among other things, it does not include all contractual obligations.
Funds From Operations (“NAREIT FFO”) and FFO as Adjusted FFO encompasses NAREIT FFO and FFO as Adjusted, each of which is described in detail below. We believe FFO applicable to common shares, diluted FFO applicable to common shares, and diluted FFO per common share are important supplemental non-GAAP measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets utilizes straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the REIT industry to address this issue.

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3
Definitions

NAREIT FFO. FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is net income (loss) applicable to common shares (computed in accordance with GAAP), excluding gains or losses from sales of depreciable property, including any current and deferred taxes directly associated with sales of depreciable property, impairments of, or related to, depreciable real estate, plus real estate and other real estate-related depreciation and amortization, and adjustments to compute our share of NAREIT FFO and FFO as Adjusted (see below) from joint ventures. Adjustments for joint ventures are calculated to reflect our pro-rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of NAREIT FFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. For consolidated joint ventures in which we do not own 100%, we reflect our share of the equity by adjusting our NAREIT FFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods. Our pro-rata share information is prepared on a basis consistent with the comparable consolidated amounts, is intended to reflect our proportionate economic interest in the operating results of properties in our portfolio and is calculated by applying our actual ownership percentage for the period. We do not control the unconsolidated joint ventures, and the pro-rata presentations of reconciling items included in NAREIT FFO do not represent our legal claim to such items. The joint venture members or partners are entitled to profit or loss allocations and distributions of cash flows according to the joint venture agreements, which provide for such allocations generally according to their invested capital.
The presentation of pro-rata information has limitations, which include, but are not limited to, the following: (i) the amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses and (ii) other companies in our industry may calculate their pro-rata interest differently, limiting the usefulness as a comparative measure. Because of these limitations, the pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the pro-rata financial information as a supplement.
NAREIT FFO does not represent cash generated from operating activities in accordance with GAAP, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income (loss). We compute NAREIT FFO in accordance with the current NAREIT definition; however, other REITs may report NAREIT FFO differently or have a different interpretation of the current NAREIT definition from ours.
FFO as Adjusted. In addition, we present NAREIT FFO on an adjusted basis before the impact of non-comparable items including, but not limited to, transaction-related items, impairments (recoveries) of non-depreciable assets, losses (gains) from the sale of non-depreciable assets, severance and related charges, prepayment costs (benefits) associated with early retirement or payment of debt, litigation costs (recoveries), casualty-related charges (recoveries), foreign currency remeasurement losses (gains), and changes in tax legislation (“FFO as Adjusted”). Transaction-related items include transaction expenses and gains/charges incurred as a result of mergers and acquisitions and lease amendment or termination activities. Prepayment costs (benefits) associated with early retirement of debt include the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of debt. Management believes that FFO as Adjusted provides a meaningful supplemental measurement of our FFO run-rate and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. At the same time that NAREIT created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors, and financial analysts who review our operating performance are best served by an FFO run-rate earnings measure that includes certain other adjustments to net income (loss), in addition to adjustments made to arrive at the NAREIT defined measure of FFO. FFO as Adjusted is used by management in analyzing our business and the performance of our properties and we believe it is important that stockholders, potential investors, and financial analysts understand this measure used by management. We use FFO as Adjusted to: (i) evaluate our performance in comparison with expected results and results of previous periods, relative to resource allocation decisions, (ii) evaluate the performance of our management, (iii) budget and forecast future results to assist in the allocation of resources, (iv) assess our performance as compared with similar real estate companies and the industry in general, and (v) evaluate how a specific potential investment will impact our future results. Other REITs or real estate companies may use different methodologies for calculating an adjusted FFO measure, and accordingly, our FFO as Adjusted may not be comparable to those reported by other REITs.
Investment and Portfolio Investment Represents: (i) the carrying amount of real estate assets and intangibles, after adding back accumulated depreciation and amortization and (ii) the carrying amount of DFLs and Debt Investments. Portfolio Investment also includes our pro rata share of the real estate assets and intangibles held in our unconsolidated JVs, presented on the same basis as Investment, and excludes noncontrolling interests' pro rata share of the real estate assets and intangibles held in our consolidated JVs, presented on the same basis. Investment and Portfolio Investment exclude land held for development.
Net Debt Enterprise Debt less the carrying amount of cash and cash equivalents as reported in our consolidated financial statements and our pro rata share of cash and cash equivalents from our unconsolidated JVs. Consolidated Debt is the most directly comparable GAAP measure to Net Debt. Net Debt is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies.

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Definitions

Net Debt to Adjusted EBITDAre Net Debt divided by Adjusted EBITDAre is a supplemental measure of our ability to decrease our debt. Because we may not be able to use our cash to reduce our debt on a dollar-for-dollar basis, this measure may have material limitations.
Net Operating Income from Continuing Operations (“NOI”) and Cash (Adjusted) NOI NOI and Adjusted NOI are non-U.S. generally accepted accounting principles (“GAAP”) supplemental financial measures used to evaluate the operating performance of real estate. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, income from direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses (which exclude transition costs); NOI excludes all other financial statement amounts included in net income (loss). Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense. NOI and Adjusted NOI include our share of income (loss) generated by unconsolidated joint ventures and exclude noncontrolling interests’ share of income (loss) generated by consolidated joint ventures. Adjusted NOI is oftentimes referred to as “Cash NOI.” Management believes NOI and Adjusted NOI are important supplemental measures because they provide relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and present them on an unlevered basis. We use NOI and Adjusted NOI to make decisions about resource allocations, to assess and compare property level performance, and to evaluate our Same-Store (“SS”) performance, as described below. We believe that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as alternative measures of operating performance to net income (loss) as defined by GAAP since they do not reflect various excluded items. Further, our definitions of NOI and Adjusted NOI may not be comparable to the definitions used by other REITs or real estate companies, as they may use different methodologies for calculating NOI and Adjusted NOI.
Operating expenses generally relate to leased medical office and life science properties, as well as SHOP and CCRC facilities. We generally recover all or a portion of our leased medical office and life science property expenses through tenant recoveries. We present expenses as operating or general and administrative based on the underlying nature of the expense.
Portfolio Cash Operating Expenses Consolidated cash operating expenses plus the Company's pro rata share of cash operating expenses from its unconsolidated JVs less noncontrolling interests' pro rata share of cash operating expenses from consolidated JVs. Portfolio Cash Operating Expenses represent property level operating expenses (which exclude transition costs) after eliminating the effects of straight-line rents, lease termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee expense.
Portfolio Income Cash NOI plus interest income plus our pro rata share of Cash NOI from our unconsolidated JVs less noncontrolling interests' pro rata share of Cash NOI from consolidated JVs.
Portfolio Real Estate Revenues and Portfolio Cash Real Estate Revenues Portfolio Real Estate Revenues include rental related revenues, resident fees and services, income from DFLs, and government grant income which is included in Other income (expense), net in our Consolidated Statement of Operations. Portfolio Real Estate Revenues include the Company's pro rata share from unconsolidated JVs presented on the same basis and exclude noncontrolling interests' pro rata share from consolidated JVs presented on the same basis. Portfolio Cash Real Estate Revenues include Portfolio Real Estate Revenues after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, lease termination fees, and the impact of deferred community fee income.
Revenue Per Occupied Room ("REVPOR") CCRC The 3-month average Cash Real Estate Revenues per occupied unit excluding Cash NREFs for the most recent period available. REVPOR CCRC excludes newly completed assets under lease-up, assets sold, acquired or converted to a new operating structure (such as triple-net to SHOP) during the relevant period, assets in redevelopment, assets that are held for sale, and assets that experienced a casualty event that significantly impacted operations. REVPOR cannot be derived from the information presented for the CCRC portfolio as units reflect 100% of the unit capacities for unconsolidated JVs and revenue is at the Company's pro rata share. REVPOR CCRC is a non-GAAP supplemental financial measure used to evaluate the revenue-generating capacity and profit potential of our CCRC assets independent of fluctuating occupancy rates. It is also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our CCRC assets.
REVPOR SHOP The 3-month average Cash Real Estate Revenues per occupied unit for the most recent period available. REVPOR SHOP excludes newly completed assets under lease-up, assets sold, acquired or converted to a new operating structure (such as triple-net to SHOP) during the relevant period, assets in redevelopment, assets that are held for sale, and assets that experienced a casualty event that significantly impacted operations. REVPOR cannot be derived from the information presented for the SHOP portfolio as units reflect 100% of the unit capacities for unconsolidated JVs and revenue is at the Company's pro rata share. REVPOR SHOP is a non-GAAP supplemental financial measure used to evaluate the revenue-generating capacity and profit potential of our SHOP assets independent of fluctuating occupancy rates. It is also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our SHOP assets.
RIDEA A structure whereby a taxable REIT subsidiary is permitted to rent a healthcare facility from its parent REIT and hire an independent contractor to operate the facility.

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5
Definitions

Same-Store ("SS") Same-Store NOI and Adjusted (Cash) NOI information allows us to evaluate the performance of our property portfolio under a consistent population by eliminating changes in the composition of our consolidated portfolio of properties. Same-Store Adjusted NOI excludes amortization of deferred revenue from tenant-funded improvements and certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis.
Properties are included in Same-Store once they are stabilized for the full period in both comparison periods. Newly acquired operating assets are generally considered stabilized at the earlier of lease-up (typically when the tenant(s) control(s) the physical use of at least 80% of the space) or 12 months from the acquisition date. Newly completed developments and redevelopments are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service. Properties that experience a change in reporting structure, such as a conversion from a triple-net lease to a RIDEA reporting structure, are considered stabilized after 12 months in operations under a consistent reporting structure. A property is removed from Same-Store when it is classified as held for sale, sold, placed into redevelopment, experiences a casualty event that significantly impacts operations, a change in reporting structure (such as triple-net to SHOP) or operator transition has been agreed to, or a significant tenant relocates from a Same-Store property to a non Same-Store property and that change results in a corresponding increase in revenue.
Secured Debt Ratio Enterprise Secured Debt divided by Enterprise Gross Assets. Secured Debt Ratio is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Our pro rata share information is calculated by applying our actual ownership percentage for the period and excludes debt funded by us to our JVs. Our pro rata share of Total Secured Debt from our unconsolidated JVs is not intended to reflect our actual liability or ability to access assets should there be a default under any or all such loans or a liquidation of the JVs.
Segments Our portfolio is comprised of investments in the following healthcare segments: (i) senior housing triple-net, (ii) senior housing operating portfolio (“SHOP”), (iii) CCRC, (iv) life science, (v) medical office, and (vi) other non-reportable segments (“Other”).
Share of Consolidated Joint Ventures ("JVs") Noncontrolling interests' pro rata share information is prepared by applying noncontrolling interests' actual ownership percentage for the period and is intended to reflect noncontrolling interests' proportionate economic interest in the financial position and operating results of properties in our portfolio.
Share of Unconsolidated Joint Ventures Our pro rata share information is prepared by applying our actual ownership percentage for the period and is intended to reflect our proportionate economic interest in the financial position and operating results of properties in our portfolio.


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Reconciliations
In thousands, except for per share data

Funds From Operations
 
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

 
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
Weighted average shares outstanding - diluted FFO as Adjusted
544,018

 
485,054

 
529,009

 
484,435

 
 
 
 
 
 
 
 
Diluted earnings per common share
$
0.09

 
$
(0.03
)
 
$
0.63

 
$
0.10

Depreciation and amortization
0.37

 
0.36

 
0.79

 
0.66

Loss (gain) on sales of real estate, net
(0.15
)
 
(0.02
)
 
(0.49
)
 
(0.04
)
Loss (gain) upon change of control, net(1)
—

 
(0.02
)
 
(0.32
)
 
(0.02
)
Taxes associated with real estate dispositions
—

 
—

 
(0.02
)
 
—

Impairments (recoveries) of depreciable real estate, net
0.03

 
0.12

 
0.09

 
0.14

Diluted NAREIT FFO per common share
$
0.34

 
$
0.41

 
$
0.68

 
$
0.84

Transaction-related items(2)
—

 
0.01

 
0.18

 
0.02

Other impairments (recoveries) and other losses (gains), net(3)
0.01

 
0.02

 
(0.06
)
 
0.02

Severance and related charges
—

 
0.01

 
—

 
0.01

Loss on debt extinguishments(4)
0.05

 
—

 
0.05

 
—

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

 
(0.01
)
 
—

 
(0.01
)
Tax rate legislation impact(6)
—

 
—

 
(0.01
)
 
—

Diluted FFO as Adjusted per common share
$
0.40

 
$
0.44

 
$
0.84

 
$
0.88


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7
Reconciliations
In thousands


Adjusted Funds From Operations
 
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(7)
—

 
4,845

 
—

 
8,340

Deferred income taxes
(6,686
)
 
(3,897
)
 
(1,899
)
 
(7,629
)
Other AFFO adjustments(8)
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)
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.
(7)
In connection with the acquisition of the remaining 51% interest in the CCRC JV in January 2020, we consolidated the 13 communities in the CCRC JV and recorded the assets and liabilities at their acquisition date relative fair values, including the CCRC contract liabilities associated with previously collected non-refundable entrance fees. In conjunction with increasing those CCRC contract liabilities to their fair value, we concluded that we will no longer adjust for the timing difference between non-refundable entrance fees collected and amortized as we believe the amortization of these fees is a meaningful representation of how we satisfy the performance obligations of the fees. As such, upon consolidation of the CCRC assets, we no longer exclude the difference between CCRC entrance fees collected and amortized from the calculation of AFFO. For comparative periods presented, the adjustment continues to represent our 49% share of non-refundable entrance fees collected by the CCRC JV, net of reserves and net of CCRC JV entrance fee amortization.
(8)
Primarily includes our share of AFFO capital expenditures from unconsolidated joint ventures, partially offset by noncontrolling interests' share of AFFO capital expenditures from consolidated joint ventures.







healthpeaklogohorizblkrgba01.jpg
8
Reconciliations
In millions


Projected SS Cash NOI(1)
For the projected year 2020 (low)
 
 
Life Science
 
Medical Office
 
Other
SS cash NOI (from withdrawn guidance)(2)
 
$
254

 
$
302

 
$
43

Potential impacts from COVID-19
 
—

 
(2
)
 
—

SS cash NOI outlook
 
$
254

 
$
300

 
$
43


For the projected year 2020 (high)
 
 
Life Science
 
Medical Office
 
Other
SS cash NOI (from withdrawn guidance)(2)
 
$
256

 
$
305

 
$
43

Potential impacts from COVID-19
 
—

 
(2
)
 
—

SS cash NOI outlook
 
$
256

 
$
303

 
$
43


For the year ended December 31, 2019
 
 
Life Science
 
Medical Office
 
Other
SS cash NOI
 
$
244

 
$
297

 
$
42


Potential SS cash NOI outlook for the full year 2020
 
 
Life Science
 
Medical Office
 
Other
Low
 
4.00
%
 
1.00
%
 
1.75
%
High
 
5.00
%
 
2.00
%
 
2.50
%
______________________________________
(1)
Please note that the figures provided on this page do not represent guidance, but a framework to help quantify potential outcomes and impacts from COVID-19.
(2)
In March 2020, we withdrew our 2020 guidance issued on February 11, 2020, as it did not include any adverse impact form COVID-19. A reconciliation of 2020 projected SS cash NOI to the most directly comparable financial measure calculated and presented in accordance with GAAP was prepared as part of our fourth quarter 2019 Discussion and Reconciliation of Non-GAAP Financial Measures, which is available on our website. As such, we have adjusted such amounts for the potential impacts from COVID-19 to provide a year-over year SS cash NOI outlook.

Projected Future Operations
In March 2020, we withdrew our 2020 guidance issued on February 11, 2020, as it did not include any adverse impact form COVID-19 outbreak. When the extent and timing of the outbreak becomes more clear, and we are then in a position to estimate the varying impacts across our diversified portfolio, including an updated sources and uses, we will make additional disclosures and update our guidance as appropriate.

healthpeaklogohorizblkrgba01.jpg
9
Reconciliations
In thousands


Enterprise Gross Assets and Portfolio Investment(1)
 
June 30, 2020
 
Senior Housing Triple-net
 
SHOP
 
CCRC
 
Life Science
 
Medical Office
 
Other
 
Corporate Non-segment
 
Total
Consolidated total assets
$
768,743

 
$
2,883,370

 
$
2,266,298

 
$
5,654,298

 
$
3,612,038

 
$
422,129

 
$
709,564

 
$
16,316,440

Investments in and advances to unconsolidated JVs
—

 
(441,021
)
 
(178
)
 
—

 
(9,818
)
 
(9,369
)
 
—

 
(460,386
)
Accumulated depreciation and amortization
311,413

 
523,867

 
130,616

 
899,548

 
1,385,360

 
99,821

 
—

 
3,350,625

Consolidated Gross Assets
$
1,080,156

 
$
2,966,216

 
$
2,396,736

 
$
6,553,846

 
$
4,987,580

 
$
512,581

 
$
709,564

 
$
19,206,679

Healthpeak's share of unconsolidated JV gross assets
—

 
603,488

 
69,862

 
—

 
18,330

 
9,157

 
—

 
700,837

Enterprise Gross Assets
$
1,080,156

 
$
3,569,704

 
$
2,466,598

 
$
6,553,846

 
$
5,005,910

 
$
521,738

 
$
709,564

 
$
19,907,516

Land held for development
—

 
(2,418
)
 
(797
)
 
(108,632
)
 
(3,252
)
 
—

 
—

 
(115,099
)
Fully depreciated real estate and intangibles
46,439

 
193,228

 
10,324

 
359,490

 
453,377

 
9,181

 
—

 
1,072,039

Non-real estate related assets(2)
(93,944
)
 
(192,877
)
 
(257,373
)
 
(233,477
)
 
(331,736
)
 
12,085

 
(709,564
)
 
(1,806,886
)
Real estate intangible liabilities
(7,991
)
 
(8,599
)
 
—

 
(138,198
)
 
(89,999
)
 
(4,871
)
 
—

 
(249,658
)
Noncontrolling interests' share of consolidated JVs real estate and related intangibles
—

 
(11,640
)
 
—

 
(3,110
)
 
(385,220
)
 
—

 
—

 
(399,970
)
Portfolio Investment
$
1,024,660

 
$
3,547,398

 
$
2,218,752

 
$
6,429,919

 
$
4,649,080

 
$
538,133

 
$
—

 
$
18,407,942

______________________________________
(1)
During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures.
(2)
Includes straight-line rent payables and receivables, net of reserves; lease commissions - 2nd generation, net of amortization; cash and restricted cash; operating lease right-of-use assets, net; and other assets, net.


 





healthpeaklogohorizblkrgba01.jpg
10
Reconciliations
In thousands


Revenues(1)
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Senior housing triple-net
$
49,805

 
$
47,956

 
$
42,603

 
$
33,135

 
$
24,589

SHOP
177,001

 
212,275

 
206,704

 
170,961

 
155,293

CCRC
—

 
—

 
3,010

 
91,780

 
113,926

Life science
107,596

 
118,561

 
120,155

 
128,883

 
138,496

Medical office
141,927

 
143,639

 
143,769

 
145,146

 
141,636

Other
15,238

 
15,540

 
15,450

 
15,245

 
14,500

Total revenues
$
491,567

 
$
537,971

 
$
531,691

 
$
585,150

 
$
588,440

Senior housing triple-net
—

 
—

 
—

 
—

 
—

SHOP
—

 
—

 
—

 
—

 
2,209

CCRC
—

 
—

 
—

 
—

 
11,871

Life science
—

 
—

 
—

 
—

 
—

Medical office
—

 
—

 
—

 
—

 
—

Other
—

 
—

 
—

 
—

 
—

Government grant income
$
—

 
$
—

 
$
—

 
$
—

 
$
14,080

Senior housing triple-net
—

 
—

 
—

 
—

 
—

SHOP
—

 
—

 
—

 
—

 
—

CCRC
—

 
—

 
—

 
—

 
—

Life science
—

 
—

 
—

 
—

 
—

Medical office
—

 
—

 
—

 
—

 
—

Other
(2,414
)
 
(2,741
)
 
(2,976
)
 
(3,688
)
 
(4,230
)
Less: Interest income
$
(2,414
)
 
$
(2,741
)
 
$
(2,976
)
 
$
(3,688
)
 
$
(4,230
)
Senior housing triple-net
—

 
—

 
—

 
—

 
—

SHOP
5,922

 
4,943

 
8,131

 
25,765

 
24,684

CCRC
52,835

 
52,671

 
53,632

 
21,647

 
4,781

Life science
—

 
—

 
—

 
—

 
—

Medical office
709

 
701

 
695

 
695

 
691

Other
5,482

 
5,227

 
4,636

 
86

 
—

Healthpeak's share of unconsolidated JVs real estate revenues
$
64,948

 
$
63,542

 
$
67,094

 
$
48,193

 
$
30,156

Senior housing triple-net
—

 
—

 
—

 
—

 
—

SHOP
—

 
—

 
—

 
—

 
270

CCRC
—

 
—

 
—

 
—

 
534

Life science
—

 
—

 
—

 
—

 
—

Medical office
—

 
—

 
—

 
—

 
—

Other
—

 
—

 
—

 
—

 
—

Healthpeak's share of unconsolidated JVs government grant income
$
—

 
$
—

 
$
—

 
$
—

 
$
804

Senior housing triple-net
1

 
—

 
—

 
—

 
—

SHOP
(523
)
 
(515
)
 
(521
)
 
(538
)
 
(504
)
CCRC
—

 
—

 
—

 
—

 
—

Life science
(42
)
 
(52
)
 
(54
)
 
(52
)
 
(57
)
Medical office
(8,381
)
 
(8,605
)
 
(8,709
)
 
(8,640
)
 
(8,347
)
Other
—

 
—

 
—

 
—

 
—

Noncontrolling interests' share of consolidated JVs real estate revenues
$
(8,945
)
 
$
(9,172
)
 
$
(9,284
)
 
$
(9,230
)
 
$
(8,908
)





Continued

healthpeaklogohorizblkrgba01.jpg
11
Reconciliations
In thousands


Revenues(1)
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Senior housing triple-net
$
49,806

 
$
47,956

 
$
42,603

 
$
33,135

 
$
24,589

SHOP
182,400

 
216,703

 
214,314

 
196,188

 
181,952

CCRC
52,835

 
52,671

 
56,642

 
113,427

 
131,112

Life science
107,554

 
118,509

 
120,101

 
128,831

 
138,439

Medical office
134,255

 
135,735

 
135,755

 
137,201

 
133,980

Other
18,306

 
18,026

 
17,110

 
11,643

 
10,270

Portfolio Real Estate Revenues
$
545,156

 
$
589,600

 
$
586,525

 
$
620,425

 
$
620,342

Senior housing triple-net
4,792

 
(1,551
)
 
(2,201
)
 
(3,388
)
 
(20
)
SHOP
1,134

 
957

 
742

 
549

 
107

CCRC
4,861

 
5,748

 
3,245

 
(177
)
 
(4
)
Life science
(7,623
)
 
(7,075
)
 
(4,969
)
 
(4,293
)
 
(2,793
)
Medical office
(1,870
)
 
(2,270
)
 
(2,031
)
 
(2,104
)
 
(1,599
)
Other
(213
)
 
79

 
138

 
461

 
485

Non-cash adjustments to Portfolio Real Estate Revenues
$
1,081

 
$
(4,112
)
 
$
(5,076
)
 
$
(8,952
)
 
$
(3,824
)
Senior housing triple-net
54,598

 
46,405

 
40,402

 
29,747

 
24,569

SHOP
183,534

 
217,660

 
215,056

 
196,737

 
182,059

CCRC
57,696

 
58,419

 
59,887

 
113,250

 
131,108

Life science
99,931

 
111,434

 
115,132

 
124,538

 
135,646

Medical office
132,385

 
133,465

 
133,724

 
135,097

 
132,381

Other
18,093

 
18,105

 
17,248

 
12,104

 
10,755

Portfolio Cash Real Estate Revenues
$
546,237

 
$
585,488

 
$
581,449

 
$
611,473

 
$
616,518

Senior housing triple-net
(34,925
)
 
(26,733
)
 
(20,594
)
 
(9,804
)
 
(4,253
)
SHOP
(83,593
)
 
(117,528
)
 
(115,158
)
 
(95,438
)
 
(88,254
)
CCRC
(57,696
)
 
(58,419
)
 
(59,887
)
 
(113,250
)
 
(131,108
)
Life science
(17,409
)
 
(26,395
)
 
(31,035
)
 
(41,103
)
 
(48,294
)
Medical office
(13,855
)
 
(13,708
)
 
(13,263
)
 
(14,238
)
 
(13,757
)
Other
(11,450
)
 
(11,284
)
 
(10,376
)
 
(5,127
)
 
(3,921
)
Non-SS Portfolio Cash Real Estate Revenues
$
(218,928
)
 
$
(254,067
)
 
$
(250,313
)
 
$
(278,960
)
 
$
(289,587
)
Senior housing triple-net
19,673

 
19,672

 
19,808

 
19,943

 
20,316

SHOP
99,941

 
100,132

 
99,898

 
101,299

 
93,805

CCRC
—

 
—

 
—

 
—

 
—

Life science
82,522

 
85,039

 
84,097

 
83,435

 
87,352

Medical office
118,530

 
119,757

 
120,461

 
120,859

 
118,624

Other
6,643

 
6,821

 
6,872

 
6,977

 
6,834

Portfolio Cash Real Estate Revenues - SS
$
327,309

 
$
331,421

 
$
331,136

 
$
332,513

 
$
326,931

______________________________________
(1)
During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.



healthpeaklogohorizblkrgba01.jpg
12
Reconciliations
In thousands


Operating Expenses(1)
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Senior housing triple-net
$
866

 
$
865

 
$
1,842

 
$
506

 
$
526

SHOP
137,460

 
166,201

 
162,893

 
138,130

 
137,507

CCRC
—

 
—

 
2,211

 
156,482

 
94,248

Life science
25,480

 
29,520

 
30,480

 
30,201

 
34,205

Medical office
50,176

 
51,472

 
50,903

 
50,687

 
49,350

Other
11

 
11

 
53

 
7

 
5

Operating expenses
$
213,993

 
$
248,069

 
$
248,382

 
$
376,013

 
$
315,841

Senior housing triple-net
—

 
—

 
—

 
—

 
—

SHOP
4,430

 
3,816

 
5,983

 
17,956

 
18,686

CCRC
42,456

 
43,193

 
43,452

 
18,037

 
4,826

Life science
—

 
—

 
—

 
—

 
—

Medical office
283

 
279

 
270

 
275

 
275

Other
11

 
23

 
20

 
(2
)
 
1

Healthpeak's share of unconsolidated JVs operating expenses
$
47,180

 
$
47,311

 
$
49,725

 
$
36,266

 
$
23,788

Senior housing triple-net
—

 
—

 
—

 
—

 
—

SHOP
(320
)
 
(388
)
 
(350
)
 
(377
)
 
(411
)
CCRC
—

 
—

 
—

 
—

 
—

Life science
(13
)
 
(16
)
 
(17
)
 
(17
)
 
(18
)
Medical office
(2,496
)
 
(2,593
)
 
(2,596
)
 
(2,600
)
 
(2,507
)
Other
—

 
—

 
—

 
—

 
—

Noncontrolling interests' share of consolidated JVs operating expenses
$
(2,829
)
 
$
(2,997
)
 
$
(2,963
)
 
$
(2,994
)
 
$
(2,936
)
Senior housing triple-net
866

 
865

 
1,842

 
506

 
526

SHOP
141,570

 
169,629

 
168,526

 
155,709

 
155,782

CCRC
42,456

 
43,193

 
45,663

 
174,519

 
99,074

Life science
25,467

 
29,504

 
30,463

 
30,184

 
34,187

Medical office
47,963

 
49,158

 
48,577

 
48,362

 
47,118

Other
22

 
34

 
73

 
5

 
6

Portfolio Operating Expenses
$
258,344

 
$
292,383

 
$
295,144

 
$
409,285

 
$
336,693

Senior housing triple-net
(14
)
 
(14
)
 
(1,093
)
 
(14
)
 
(61
)
SHOP
236

 
218

 
125

 
18

 
(11
)
CCRC
116

 
113

 
91

 
(91,738
)
 
(22
)
Life science
(17
)
 
(13
)
 
(13
)
 
(13
)
 
(14
)
Medical office
(658
)
 
(661
)
 
(654
)
 
(647
)
 
(648
)
Other
—

 
—

 
1

 
—

 
—

Non-cash adjustments to Portfolio Operating Expenses
$
(337
)
 
$
(357
)
 
$
(1,543
)
 
$
(92,394
)
 
$
(756
)
Senior housing triple-net
852

 
851

 
749

 
492

 
465

SHOP
141,806

 
169,847

 
168,651

 
155,727

 
155,771

CCRC
42,572

 
43,306

 
45,754

 
82,781

 
99,052

Life science
25,450

 
29,491

 
30,450

 
30,171

 
34,173

Medical office
47,305

 
48,497

 
47,923

 
47,715

 
46,470

Other
22

 
34

 
74

 
5

 
6

Portfolio Cash Operating Expenses
$
258,007

 
$
292,026

 
$
293,601

 
$
316,891

 
$
335,937

Continued


healthpeaklogohorizblkrgba01.jpg
13
Reconciliations
In thousands



Operating Expenses(1)
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Senior housing triple-net
$
(822
)
 
$
(820
)
 
$
(725
)
 
$
(457
)
 
$
(430
)
SHOP
(68,802
)
 
(94,590
)
 
(93,330
)
 
(79,146
)
 
(78,391
)
CCRC
(42,572
)
 
(43,306
)
 
(45,754
)
 
(82,781
)
 
(99,052
)
Life science
(5,005
)
 
(8,039
)
 
(9,414
)
 
(10,185
)
 
(13,425
)
Medical office
(5,827
)
 
(5,950
)
 
(5,625
)
 
(6,093
)
 
(5,910
)
Other
(17
)
 
(29
)
 
1

 
—

 
(2
)
Non-SS Portfolio Cash Operating Expenses
$
(123,045
)
 
$
(152,734
)
 
$
(154,847
)
 
$
(178,662
)
 
$
(197,210
)
Senior housing triple-net
30

 
31

 
24

 
35

 
35

SHOP
73,004

 
75,257

 
75,321

 
76,581

 
77,380

CCRC
—

 
—

 
—

 
—

 
—

Life science
20,445

 
21,452

 
21,036

 
19,986

 
20,748

Medical office
41,478

 
42,547

 
42,298

 
41,622

 
40,560

Other
5

 
5

 
75

 
5

 
4

Portfolio Cash Operating Expenses - SS
$
134,962

 
$
139,292

 
$
138,754

 
$
138,229

 
$
138,727

______________________________________
(1)
During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.






healthpeaklogohorizblkrgba01.jpg
14
Reconciliations
In thousands


Revenues
 
Operating Expenses
Six Months Ended
June 30, 2020
 
Six Months Ended
June 30, 2020
Senior housing triple-net
$
57,724

 
Senior housing triple-net
$
1,032

SHOP
326,254

 
SHOP
275,637

CCRC
205,706

 
CCRC
250,730

Life science
267,379

 
Life science
64,406

Medical office
286,782

 
Medical office
100,037

Other
29,745

 
Other
12

Total revenues
$
1,173,590

 
Operating expenses
$
691,854

Senior housing triple-net
—

 
Senior housing triple-net
—

SHOP
2,209

 
SHOP
36,642

CCRC
11,871

 
CCRC
22,863

Life science
—

 
Life science
—

Medical office
—

 
Medical office
550

Other
—

 
Other
(1
)
Government grant income
$
14,080

 
Healthpeak's share of unconsolidated JVs operating expenses
$
60,054

Senior housing triple-net
—

 
Senior housing triple-net
—

SHOP
—

 
SHOP
(788
)
CCRC
—

 
CCRC
—

Life science
—

 
Life science
(35
)
Medical office
—

 
Medical office
(5,107
)
Other
(7,918
)
 
Other
—

Less: Interest income
$
(7,918
)
 
Noncontrolling interests' share of consolidated JVs operating expenses
$
(5,930
)
Senior housing triple-net
—

 
Senior housing triple-net
1,032

SHOP
50,449

 
SHOP
311,491

CCRC
26,428

 
CCRC
273,593

Life science
—

 
Life science
64,371

Medical office
1,386

 
Medical office
95,480

Other
86

 
Other
11

Healthpeak's share of unconsolidated JVs real estate revenues
$
78,349

 
Portfolio Operating Expenses
$
745,978

Senior housing triple-net
—

 
Senior housing triple-net
(75
)
SHOP
270

 
SHOP
7

CCRC
534

 
CCRC
(91,760
)
Life science
—

 
Life science
(27
)
Medical office
—

 
Medical office
(1,295
)
Other
—

 
Other
—

Healthpeak's share of unconsolidated JVs government grant income
$
804

 
Non-cash adjustments to Portfolio Operating Expenses
$
(93,150
)
Senior housing triple-net
—

 
Senior housing triple-net
957

SHOP
(1,042
)
 
SHOP
311,498

CCRC
—

 
CCRC
181,833

Life science
(109
)
 
Life science
64,344

Medical office
(16,987
)
 
Medical office
94,185

Other
—

 
Other
11

Noncontrolling interests' share of consolidated JVs real estate revenues
$
(18,138
)
 
Portfolio Cash Operating Expenses
$
652,828



Continued

healthpeaklogohorizblkrgba01.jpg
15
Reconciliations
In thousands


Revenues
 
Operating Expenses
Six Months Ended
June 30, 2020
 
Six Months Ended
June 30, 2020
Senior housing triple-net
$
57,724

 
Senior housing triple-net
$
(887
)
SHOP
378,140

 
SHOP
(228,948
)
CCRC
244,539

 
CCRC
(181,833
)
Life science
267,270

 
Life science
(24,998
)
Medical office
271,181

 
Medical office
(12,979
)
Other
21,913

 
Other
(2
)
Portfolio Real Estate Revenues
$
1,240,767

 
Non-SS Portfolio Cash Operating Expenses(2)
$
(449,647
)
Senior housing triple-net
(3,408
)
 
Senior housing triple-net
70

SHOP
656

 
SHOP
82,550

CCRC
(181
)
 
CCRC
—

Life science
(7,086
)
 
Life science
39,346

Medical office
(3,703
)
 
Medical office
81,206

Other
946

 
Other
9

Non-cash adjustments to Portfolio Real Estate Revenues
$
(12,776
)
 
Portfolio Cash Operating Expenses - SS(2)
$
203,181

Senior housing triple-net
54,316

 
 
 
SHOP
378,796

 
 
 
CCRC
244,358

 
 
 
Life science
260,184

 
 
 
Medical office
267,478

 
 
 
Other
22,859

 
 
 
Portfolio Cash Real Estate Revenues
$
1,227,991

 
 
 
Senior housing triple-net
(14,056
)
 
 
 
SHOP
(265,901
)
 
 
 
CCRC
(244,358
)
 
 
 
Life science
(93,919
)
 
 
 
Medical office
(30,269
)
 
 
 
Other
(9,047
)
 
 
 
Non-SS Portfolio Cash Real Estate Revenues(1)
$
(657,550
)
 
 
 
Senior housing triple-net
40,260

 
 
 
SHOP
112,895

 
 
 
CCRC
—

 
 
 
Life science
166,265

 
 
 
Medical office
237,209

 
 
 
Other
13,812

 
 
 
Portfolio Cash Real Estate Revenues - SS(1)
$
570,441

 
 
 
______________________________________
(1)
The property count used for Non-SS Portfolio Cash Real Estate Revenues and Portfolio Cash Real Estate Revenues - SS differed from the three and six months ended June 30, 2020.
(2)
The property count used for Non-SS Portfolio Cash Operating Expenses and Portfolio Cash Operating Expenses - SS differed for the three and six months ended June 30, 2020.



healthpeaklogohorizblkrgba01.jpg
16
Reconciliations
In thousands


EBITDAre and Adjusted EBITDAre
 
Three Months Ended June 30, 2020
Net income (loss)
$
55,049

Interest expense
57,550

Income tax expense (benefit)
(7,346
)
Depreciation and amortization
178,488

Other depreciation and amortization
1,787

Loss (gain) on sales of real estate
(82,863
)
Loss (gain) upon change of control
(2,528
)
Impairments (recoveries) of depreciable real estate
17,797

Share of unconsolidated JV:
 
  Interest expense
945

  Income tax expense (benefit)
(507
)
  Depreciation and amortization
25,618

  Gain on sale of real estate from unconsolidated JVs
(1,519
)
EBITDAre
$
242,471

 
 
Transaction-related items
673

Other impairments (recoveries) and losses (gains)
6,291

Loss on debt extinguishments
25,824

Litigation costs (recoveries)
100

Amortization of deferred compensation
4,984

Foreign currency remeasurement losses (gains)
143

Adjusted EBITDAre
$
280,486




Adjusted Fixed Charge Coverage
 
Three Months Ended June 30, 2020
Interest expense
$
57,550

Share of unconsolidated JV interest expense
945

Capitalized interest
6,726

Fixed Charges
$
65,221

 
 
Adjusted Fixed Charge Coverage
  4.3x

  


healthpeaklogohorizblkrgba01.jpg
17
Reconciliations
In thousands


Enterprise Debt and Net Debt
 
June 30, 2020
Bank line of credit and commercial paper
$
—

Term loan
249,062

Senior unsecured notes
5,992,193

Mortgage debt(1)
515,177

Consolidated Debt
$
6,756,432

Share of unconsolidated JV mortgage debt
92,245

Enterprise Debt
$
6,848,677

Cash and cash equivalents
(730,957
)
Share of unconsolidated JV cash and cash equivalents
(19,012
)
Net Debt
$
6,098,708

Financial Leverage
 
June 30, 2020
Enterprise Debt
$
6,848,677

Enterprise Gross Assets
19,907,516

Financial Leverage
34.4%

Secured Debt Ratio
 
June 30, 2020
Mortgage debt(1)
$
515,177

Share of unconsolidated JV mortgage debt
92,245

Enterprise Secured Debt
$
607,422

Enterprise Gross Assets
19,907,516

Secured Debt Ratio
3.1%

Net Debt to Adjusted EBITDAre
 
Three Months Ended
June 30, 2020
Net Debt
$
6,098,708

 
Annualized Adjusted EBITDAre
1,121,944

(2) 
Net Debt to Adjusted EBITDAre
  5.4x

 
  ______________________________________
(1)
Includes mortgage debt of $27.6 million on assets held for sale that matures in 2044.
(2)
Represents the current quarter Adjusted EBIDTAre multiplied by a factor of four.




healthpeaklogohorizblkrgba01.jpg
18
Reconciliations
In thousands


Segment Cash NOI, Portfolio Income, and SS
Total Portfolio(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
(9,980
)
 
$
(42,308
)
 
$
47,359

 
$
282,540

 
$
55,049

Interest income
(2,414
)
 
(2,741
)
 
(2,976
)
 
(3,688
)
 
(4,230
)
Interest expense
56,942

 
61,230

 
58,120

 
58,376

 
57,550

Depreciation and amortization
165,296

 
171,944

 
190,798

 
189,276

 
178,488

General and administrative
27,120

 
22,970

 
21,521

 
22,349

 
23,720

Transaction costs
1,337

 
1,319

 
1,569

 
14,848

 
627

Loss (gain) on sales of real estate, net
(11,448
)
 
784

 
(4,193
)
 
(164,869
)
 
(82,863
)
Impairments and loan loss (reserves) recoveries, net
68,538

 
38,257

 
110,284

 
39,123

 
24,050

Other expense (income), net
(21,008
)
 
(693
)
 
(157,296
)
 
(210,608
)
 
(19,586
)
Loss on debt extinguishments
1,135

 
35,017

 
22,213

 
(833
)
 
25,824

Income tax expense (benefit)
(1,864
)
 
(6,261
)
 
(5,679
)
 
(33,044
)
 
(7,346
)
Government grant income
—

 
—

 
—

 
—

 
14,080

Equity loss (income) from unconsolidated JVs
1,506

 
7,643

 
(1,387
)
 
11,979

 
17,086

Healthpeak's share of unconsolidated JVs NOI
17,768

 
16,231

 
17,369

 
11,927

 
7,172

Noncontrolling interests' share of consolidated JVs NOI
(6,116
)
 
(6,175
)
 
(6,321
)
 
(6,236
)
 
(5,972
)
Portfolio NOI
$
286,812

 
$
297,217

 
$
291,381

 
$
211,140

 
$
283,649

Adjustment to Portfolio NOI
1,418

 
(3,755
)
 
(3,533
)
 
83,442

 
(3,068
)
Portfolio Cash NOI
$
288,230

 
$
293,462

 
$
287,848

 
$
294,582

 
$
280,581

Interest income
2,414

 
2,741

 
2,976

 
3,688

 
4,230

Healthpeak's share of unconsolidated JVs interest income
91

 
87

 
80

 
—

 
—

Portfolio Income
$
290,735

 
$
296,290

 
$
290,904

 
$
298,270

 
$
284,811

Interest income
(2,414
)
 
(2,741
)
 
(2,976
)
 
(3,688
)
 
(4,230
)
Healthpeak's share of unconsolidated JVs interest income
(91
)
 
(87
)
 
(80
)
 
—

 
—

Adjustment to Portfolio NOI
(1,418
)
 
3,755

 
3,533

 
(83,442
)
 
3,068

Non-SS NOI
(91,357
)
 
(100,152
)
 
(95,951
)
 
(13,173
)
 
(93,663
)
SS NOI
$
195,455

 
$
197,065

 
$
195,430

 
$
197,967

 
$
189,986

Non-cash adjustment to SS NOI
(3,108
)
 
(4,936
)
 
(3,048
)
 
(3,683
)
 
(1,782
)
SS Cash NOI
$
192,347

 
$
192,129

 
$
192,382

 
$
194,284

 
$
188,204




healthpeaklogohorizblkrgba01.jpg
19
Reconciliations
In thousands


Senior Housing Triple-Net(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
17,560

 
$
26,782

 
$
9,513

 
$
184,760

 
$
15,809

Interest expense
206

 
106

 
102

 
82

 
72

Depreciation and amortization
15,688

 
12,773

 
10,202

 
7,160

 
7,175

Impairments and loan loss (reserves) recoveries, net
15,485

 
7,430

 
20,944

 
4,670

 
1,007

Loss (gain) on sales of real estate, net
—

 
—

 
—

 
(164,043
)
 
—

Noncontrolling interests' share of consolidated JVs NOI
1

 
—

 
—

 
—

 
—

Portfolio NOI
$
48,940

 
$
47,091

 
$
40,761

 
$
32,629

 
$
24,063

Adjustment to Portfolio NOI
4,806

 
(1,537
)
 
(1,108
)
 
(3,374
)
 
41

Portfolio Cash NOI
$
53,746

 
$
45,554

 
$
39,653

 
$
29,255

 
$
24,104

Adjustment to Portfolio NOI
(4,806
)
 
1,537

 
1,108

 
3,374

 
(41
)
Non-SS NOI
(29,730
)
 
(26,219
)
 
(19,866
)
 
(12,150
)
 
(3,522
)
SS NOI
$
19,210

 
$
20,872

 
$
20,895

 
$
20,479

 
$
20,541

Non-cash adjustment to SS NOI
433

 
(1,231
)
 
(1,111
)
 
(571
)
 
(260
)
SS Cash NOI
$
19,643

 
$
19,641

 
$
19,784

 
$
19,908

 
$
20,281


SHOP(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
(50,085
)
 
$
(40,562
)
 
$
46,024

 
$
(69,705
)
 
$
(46,821
)
Interest expense
1,326

 
2,637

 
2,893

 
2,855

 
2,837

Depreciation and amortization
52,242

 
58,152

 
80,106

 
57,003

 
31,621

Impairments and loan loss (reserves) recoveries, net
52,963

 
24,721

 
86,684

 
23,285

 
16,158

Loss (gain) on sales of real estate, net
(4,691
)
 
734

 
(10,541
)
 
1,243

 
(1,579
)
Other expense (income), net
(12,817
)
 
—

 
(160,886
)
 
—

 
(2,209
)
Government grant income
—

 
—

 
—

 
—

 
2,209

Equity loss (income) from unconsolidated JVs
603

 
392

 
(469
)
 
18,150

 
17,779

Healthpeak's share of unconsolidated JVs NOI
1,492

 
1,127

 
2,148

 
7,809

 
6,268

Noncontrolling interests' share of consolidated JVs NOI
(203
)
 
(127
)
 
(171
)
 
(161
)
 
(93
)
Portfolio NOI
$
40,830

 
$
47,074

 
$
45,788

 
$
40,479

 
$
26,170

Adjustment to Portfolio NOI
898

 
739

 
617

 
531

 
118

Portfolio Cash NOI
$
41,728

 
$
47,813

 
$
46,405

 
$
41,010

 
$
26,288

Adjustment to Portfolio NOI
(898
)
 
(739
)
 
(617
)
 
(531
)
 
(118
)
Non-SS NOI
(14,098
)
 
(22,187
)
 
(21,121
)
 
(15,650
)
 
(9,679
)
SS NOI
$
26,732

 
$
24,887

 
$
24,667

 
$
24,829

 
$
16,491

Non-cash adjustment to SS NOI
205

 
(12
)
 
(90
)
 
(111
)
 
(66
)
SS Cash NOI
$
26,937

 
$
24,875

 
$
24,577

 
$
24,718

 
$
16,425


healthpeaklogohorizblkrgba01.jpg
20
Reconciliations
In thousands


CCRC(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
(2,568
)
 
$
(9,194
)
 
$
(7,321
)
 
$
82,217

 
$
826

Interest expense
—

 
—

 
—

 
1,304

 
1,969

Depreciation and amortization
—

 
—

 
—

 
20,229

 
31,426

Other expense (income), net
—

 
—

 
5,665

 
(170,332
)
 
(14,142
)
Government grant income
—

 
—

 
—

 
—

 
11,871

Equity loss (income) from unconsolidated JVs
2,568

 
9,194

 
2,455

 
1,880

 
(401
)
Healthpeak's share of unconsolidated JVs NOI
10,379

 
9,478

 
10,180

 
3,610

 
489

Noncontrolling interests' share of consolidated JVs NOI
—

 
—

 
—

 
—

 
—

Portfolio NOI
$
10,379

 
$
9,478

 
$
10,979

 
$
(61,092
)
 
$
32,038

Adjustment to Portfolio NOI
4,745

 
5,635

 
3,154

 
91,561

 
18

Portfolio Cash NOI
$
15,124

 
$
15,113

 
$
14,133

 
$
30,469

 
$
32,056

Adjustment to Portfolio NOI
(4,745
)
 
(5,635
)
 
(3,154
)
 
(91,561
)
 
(18
)
Non-SS NOI
(10,379
)
 
(9,478
)
 
(10,979
)
 
61,092

 
(32,038
)
SS NOI
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Non-cash adjustment to SS NOI
—

 
—

 
—

 
—

 
—

SS Cash NOI
$
—

 
$
—

 
$
—

 
$
—

 
$
—


Life Science(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
44,431

 
$
43,858

 
$
43,975

 
$
48,408

 
$
51,875

Interest expense
70

 
68

 
66

 
63

 
60

Depreciation and amortization
41,431

 
45,028

 
45,634

 
50,211

 
52,356

Loss (gain) on sales of real estate, net
(3,816
)
 
87

 
—

 
—

 
—

Noncontrolling interests' share of consolidated JVs NOI
(29
)
 
(36
)
 
(37
)
 
(35
)
 
(39
)
Portfolio NOI
$
82,087

 
$
89,005

 
$
89,638

 
$
98,647

 
$
104,252

Adjustment to Portfolio NOI
(7,606
)
 
(7,062
)
 
(4,956
)
 
(4,280
)
 
(2,779
)
Portfolio Cash NOI
$
74,481

 
$
81,943

 
$
84,682

 
$
94,367

 
$
101,473

Adjustment to Portfolio NOI
7,606

 
7,062

 
4,956

 
4,280

 
2,779

Non-SS NOI
(17,744
)
 
(23,382
)
 
(26,126
)
 
(33,531
)
 
(37,091
)
SS NOI
$
64,343

 
$
65,623

 
$
63,512

 
$
65,116

 
$
67,161

Non-cash adjustment to SS NOI
(2,266
)
 
(2,036
)
 
(451
)
 
(1,667
)
 
(557
)
SS Cash NOI
$
62,077

 
$
63,587

 
$
63,061

 
$
63,449

 
$
66,604










healthpeaklogohorizblkrgba01.jpg
21
Reconciliations
In thousands


Medical Office(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
40,613

 
$
32,387

 
$
37,259

 
$
40,808

 
$
116,989

Interest expense
109

 
108

 
105

 
102

 
100

Depreciation and amortization
54,096

 
54,152

 
53,323

 
53,148

 
54,572

Impairments and loan loss (reserves) recoveries, net
90

 
5,729

 
2,656

 
2,706

 
2,119

Loss (gain) on sales of real estate, net
(2,941
)
 
7

 
(263
)
 
(2,109
)
 
(81,284
)
Equity loss (income) from unconsolidated JVs
(216
)
 
(216
)
 
(214
)
 
(196
)
 
(210
)
Healthpeak's share of unconsolidated JVs NOI
426

 
422

 
425

 
420

 
416

Noncontrolling interests' share of consolidated JVs NOI
(5,885
)
 
(6,012
)
 
(6,113
)
 
(6,040
)
 
(5,840
)
Portfolio NOI
$
86,292

 
$
86,577

 
$
87,178

 
$
88,839

 
$
86,862

Adjustment to Portfolio NOI
(1,212
)
 
(1,609
)
 
(1,377
)
 
(1,457
)
 
(951
)
Portfolio Cash NOI
$
85,080

 
$
84,968

 
$
85,801

 
$
87,382

 
$
85,911

Adjustment to Portfolio NOI
1,212

 
1,609

 
1,377

 
1,457

 
951

Non-SS NOI
(7,867
)
 
(7,611
)
 
(7,529
)
 
(8,178
)
 
(7,809
)
SS NOI
$
78,425

 
$
78,966

 
$
79,649

 
$
80,661

 
$
79,053

Non-cash adjustment to SS NOI
(1,373
)
 
(1,756
)
 
(1,486
)
 
(1,424
)
 
(989
)
SS Cash NOI
$
77,052

 
$
77,210

 
$
78,163

 
$
79,237

 
$
78,064


Other(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
14,837

 
$
16,064

 
$
10,412

 
$
54,773

 
$
8,473

Interest income
(2,414
)
 
(2,741
)
 
(2,976
)
 
(3,688
)
 
(4,230
)
Depreciation and amortization
1,839

 
1,839

 
1,533

 
1,525

 
1,338

Impairments and loan loss (reserves) recoveries, net
—

 
377

 
—

 
8,462

 
4,766

Loss (gain) on sales of real estate, net
—

 
(44
)
 
6,611

 
40

 
—

Other expense (income), net
—

 
(980
)
 
—

 
(41,707
)
 
—

Equity loss (income) from unconsolidated JVs
(1,449
)
 
(1,727
)
 
(3,159
)
 
(7,855
)
 
(82
)
Healthpeak's share of unconsolidated JVs NOI
5,471

 
5,204

 
4,616

 
88

 
(1
)
Portfolio NOI
$
18,284

 
$
17,992

 
$
17,037

 
$
11,638

 
$
10,264

Adjustment to Portfolio NOI
(213
)
 
79

 
137

 
461

 
485

Portfolio Cash NOI
$
18,071

 
$
18,071

 
$
17,174

 
$
12,099

 
$
10,749

Interest income
2,414

 
2,741

 
2,976

 
3,688

 
4,230

Healthpeak's share of unconsolidated JVs interest income
91

 
87

 
80

 
—

 
—

Portfolio Income
$
20,576

 
$
20,899

 
$
20,230

 
$
15,787

 
$
14,979

Interest income
(2,414
)
 
(2,741
)
 
(2,976
)
 
(3,688
)
 
(4,230
)
Healthpeak's share of unconsolidated JVs interest income
(91
)
 
(87
)
 
(80
)
 
—

 
—

Adjustment to Portfolio NOI
213

 
(79
)
 
(137
)
 
(461
)
 
(485
)
Non-SS NOI
(11,539
)
 
(11,275
)
 
(10,330
)
 
(4,756
)
 
(3,524
)
SS NOI
$
6,745

 
$
6,717

 
$
6,707

 
$
6,882

 
$
6,740

Non-cash adjustment to SS NOI
(107
)
 
99

 
90

 
90

 
90

SS Cash NOI
$
6,638

 
$
6,816

 
$
6,797

 
$
6,972

 
$
6,830


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22
Reconciliations
In thousands


Corporate Non-Segment(1) 
 
Three Months Ended
 
June 30, 2019
 
September 30, 2019
 
December 31, 2019
 
March 31, 2020
 
June 30, 2020
Net Income (loss)
$
(74,768
)
 
$
(111,643
)
 
$
(92,503
)
 
$
(58,721
)
 
$
(92,102
)
Interest expense
55,231

 
58,311

 
54,954

 
53,970

 
52,512

General and administrative
27,120

 
22,970

 
21,521

 
22,349

 
23,720

Transaction costs
1,337

 
1,319

 
1,569

 
14,848

 
627

Other expense (income), net
(8,191
)
 
287

 
(2,075
)
 
1,431

 
(3,235
)
Loss on debt extinguishments
1,135

 
35,017

 
22,213

 
(833
)
 
25,824

Income tax expense (benefit)
(1,864
)
 
(6,261
)
 
(5,679
)
 
(33,044
)
 
(7,346
)
Portfolio NOI
$
—

 
$
—

 
$
—

 
$
—

 
$
—

______________________________________
(1)
During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.

healthpeaklogohorizblkrgba01.jpg
23
Reconciliations
In thousands


Segment Cash NOI, Portfolio Income, and SS

For the six months ended June 30, 2020(1) 
 
 
Senior Housing Triple-Net
 
SHOP
 
CCRC
 
Life Science
 
Medical Office
 
Other
 
Corporate Non-segment
 
Total
Net Income (loss)
 
$
200,567

 
$
(116,525
)
 
$
83,043

 
$
100,284

 
$
157,797

 
$
63,246

 
$
(150,823
)
 
$
337,589

Interest income
 
—

 
—

 
—

 
—

 
—

 
(7,918
)
 
—

 
(7,918
)
Interest expense
 
154

 
5,692

 
3,273

 
122

 
203

 
—

 
106,482

 
115,926

Depreciation and amortization
 
14,337

 
88,623

 
51,655

 
102,567

 
107,720

 
2,862

 
—

 
367,764

General and administrative
 
—

 
—

 
—

 
—

 
—

 
—

 
46,069

 
46,069

Transaction costs
 
—

 
—

 
—

 
—

 
—

 
—

 
15,475

 
15,475

Impairments and loan loss (reserves) recoveries, net
 
5,677

 
39,443

 
—

 
—

 
4,825

 
13,228

 
—

 
63,173

Loss (gain) on sales of real estate, net
 
(164,043
)
 
(336
)
 
—

 
—

 
(83,393
)
 
40

 
—

 
(247,732
)
Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
—

 
24,991

 
24,991

Other expense (income), net
 
—

 
(2,209
)
 
(184,474
)
 
—

 
—

 
(41,707
)
 
(1,804
)
 
(230,194
)
Income tax expense (benefit)
 
—

 
—

 
—

 
—

 
—

 
—

 
(40,390
)
 
(40,390
)
Government grant income
 
—

 
2,209

 
11,871

 
—

 
—

 
—

 
—

 
14,080

Healthpeak's share of unconsolidated joint venture NOI
 
—

 
14,077

 
4,099

 
—

 
836

 
87

 
—

 
19,099

Noncontrolling interests' share of consolidated joint venture NOI
 
—

 
(254
)
 
—

 
(74
)
 
(11,880
)
 
—

 
—

 
(12,208
)
Equity loss (income) from unconsolidated JVs
 
—

 
35,929

 
1,479

 
—

 
(407
)
 
(7,936
)
 
—

 
29,065

NOI
 
$
56,692

 
$
66,649

 
$
(29,054
)
 
$
202,899

 
$
175,701

 
$
21,902

 
$
—

 
$
494,789

Adjustment to NOI
 
(3,333
)
 
649

 
91,579

 
(7,059
)
 
(2,408
)
 
946

 
 
 
80,374

Cash NOI
 
$
53,359

 
$
67,298

 
$
62,525

 
$
195,840

 
$
173,293

 
$
22,848

 
$
—

 
$
575,163

Interest Income
 
—

 
—

 
—

 
—

 
—

 
7,918

 
 
 
7,918

Portfolio Income
 
$
53,359

 
$
67,298

 
$
62,525

 
$
195,840

 
$
173,293

 
$
30,766

 
$
—

 
$
583,081

Interest income
 
—

 
—

 
—

 
—

 
—

 
(7,918
)
 
—

 
(7,918
)
Adjustment to NOI
 
3,333

 
(649
)
 
(91,579
)
 
7,059

 
2,408

 
(946
)
 
—

 
(80,374
)
Non-SS NOI
 
(15,672
)
 
(36,128
)
 
29,054

 
(74,417
)
 
(17,261
)
 
(8,279
)
 
—

 
(122,703
)
SS NOI
 
$
41,020

 
$
30,521

 
$
—

 
$
128,482

 
$
158,440

 
$
13,623

 
$
—

 
$
372,086

Non-cash adjustment to SS NOI
 
(830
)
 
(176
)
 
—

 
(1,563
)
 
(2,437
)
 
180

 
—

 
(4,826
)
SS cash NOI
 
$
40,190

 
$
30,345

 
$
—

 
$
126,919

 
$
156,003

 
$
13,803

 
$
—

 
$
367,260

______________________________________
(1)
During the first quarter of 2020, primarily as a result of: (i) acquiring 100% ownership interest in 13 of the 15 CCRCs previously held in an unconsolidated joint venture and (ii) deconsolidating 19 SHOP assets into a new joint venture in December 2019, the Company's chief operating decision makers began reviewing operating results of the CCRCs on a stand-alone basis and financial information for each respective segment inclusive of the Company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share on consolidated joint ventures. Therefore, during the first quarter of 2020, the Company began reporting CCRCs as a separate segment and began reporting segment measures inclusive of the company's share of unconsolidated joint ventures and exclusive of noncontrolling interests' share of consolidated joint ventures. Accordingly, all prior period segment information has been recast to conform to the current period presentation.


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24
Reconciliations
In thousands


For the six months ended June 30, 2019
 
 
Senior Housing Triple-Net
 
SHOP
 
CCRC
 
Life Science
 
Medical Office
 
Other
 
Corporate Non-segment
 
Total
Net Income (loss)
 
$
61,688

 
$
(41,455
)
 
$
(4,664
)
 
$
80,514

 
$
71,902

 
$
28,965

 
$
(141,940
)
 
$
55,010

Interest income
 
—

 
—

 
—

 
—

 
—

 
(4,127
)
 
—

 
(4,127
)
Interest expense
 
795

 
1,989

 
—

 
143

 
221

 
—

 
103,121

 
106,269

Depreciation and amortization
 
32,366

 
76,328

 
—

 
77,677

 
107,198

 
3,678

 
—

 
297,247

General and administrative
 
—

 
—

 
—

 
—

 
—

 
—

 
48,475

 
48,475

Transaction costs
 
—

 
—

 
—

 
—

 
—

 
—

 
5,855

 
5,855

Impairments and loan loss (reserves) recoveries, net
 
15,485

 
52,963

 
—

 
—

 
8,948

 
—

 
—

 
77,396

Loss (gain) on sales of real estate, net
 
(3,557
)
 
(9,314
)
 
—

 
(3,738
)
 
(2,883
)
 
—

 
—

 
(19,492
)
Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
—

 
1,135

 
1,135

Other expense (income), net
 
—

 
(12,817
)
 
—

 
—

 
—

 
—

 
(11,324
)
 
(24,141
)
Income tax expense (benefit)
 
—

 
—

 
—

 
—

 
—

 
—

 
(5,322
)
 
(5,322
)
Healthpeak's share of unconsolidated joint venture NOI
 
—

 
2,980

 
21,240

 
—

 
856

 
10,986

 
—

 
36,062

Noncontrolling interests' share of consolidated joint venture NOI
 
(1
)
 
(325
)
 
—

 
(56
)
 
(11,764
)
 
—

 
—

 
(12,146
)
Equity loss (income) from unconsolidated JVs
 
—

 
1,081

 
4,664

 
—

 
(427
)
 
(2,949
)
 
—

 
2,369

NOI
 
$
106,776

 
$
71,430

 
$
21,240

 
$
154,540

 
$
174,051

 
$
36,553

 
$
—

 
$
564,590

Adjustment to NOI
 
5,371

 
2,080

 
8,197

 
(10,084
)
 
(2,960
)
 
(492
)
 
—

 
2,112

Cash NOI
 
$
112,147

 
$
73,510

 
$
29,437

 
$
144,456

 
$
171,091

 
$
36,061

 
$
—

 
$
566,702

Interest Income
 
—

 
—

 
—

 
—

 
—

 
4,127

 
—

 
4,127

Healthpeak's share of unconsolidated joint venture interest income
 
—

 
—

 
—

 
—

 
—

 
183

 
—

 
183

Portfolio Income
 
$
112,147

 
$
73,510

 
$
29,437

 
$
144,456

 
$
171,091

 
$
40,371

 
$
—

 
$
571,012

Interest income
 
—

 
—

 
—

 
—

 
—

 
(4,127
)
 
—

 
(4,127
)
Healthpeak's share of unconsolidated joint venture interest income
 
—

 
—

 
—

 
—

 
—

 
(183
)
 
—

 
(183
)
Adjustment to NOI
 
(5,371
)
 
(2,080
)
 
(8,197
)
 
10,084

 
2,960

 
492

 
—

 
(2,112
)
Non-SS NOI
 
(68,811
)
 
(35,790
)
 
(21,240
)
 
(30,356
)
 
(17,536
)
 
(23,087
)
 
—

 
(196,820
)
SS NOI
 
$
37,965

 
$
35,640

 
$
—

 
$
124,184

 
$
156,515

 
$
13,466

 
$
—

 
$
367,770

Non-cash adjustment to SS NOI
 
1,069

 
505

 
—

 
(3,641
)
 
(3,311
)
 
(213
)
 
—

 
(5,591
)
SS cash NOI
 
$
39,034

 
$
36,145

 
$
—

 
$
120,543

 
$
153,204

 
$
13,253

 
$
—

 
$
362,179



healthpeaklogohorizblkrgba01.jpg
25
Reconciliations
In thousands


Pro forma Portfolio Income(1)
 
 
Three Months Ended June 30, 2020
 
 
Senior Housing Triple-net
 
SHOP
 
CCRC
 
Life Science
 
Medical Office
 
Other
 
Total
Portfolio Income(2)
 
$
24,104

 
$
26,288

 
$
32,056

 
$
101,473

 
$
85,911

 
$
14,979

 
$
284,810

Pro forma Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior housing asset sales and transitions(3)
 
(4,245
)
 
1,102

 
(507
)
 
—

 
—

 
—

 
(3,650
)
Other pro forma adjustments(4)
 
—

 
—

 
—

 
—

 
(2,511
)
 
(3,807
)
 
(6,318
)
Pro forma Portfolio Income
 
$
19,859

 
$
27,390

 
$
31,549

 
$
101,472

 
$
83,400

 
$
11,172

 
$
274,843

 ______________________________________
(1)
May not add due to rounding.
(2)
See pages 19 to 25 of this document for a reconciliation of Portfolio Income to net income.
(3)
Includes pro forma adjustments to reflect certain previously announced transactions. Pro forma Portfolio Income is further adjusted to reflect acquisitions, dispositions and operator transitions as if they occurred on the first day of the quarter.
(4)
Includes the sale of three Medical office properties and includes proforma adjustment to reflect the sale of one hospital for which the tenant has provided notice to exercise a purchase option. Pro forma Portfolio Income is further adjusted to reflect acquisitions and dispositions as if they occurred on the first day of the quarter.






healthpeaklogohorizblkrgba01.jpg
26
Reconciliations
In thousands, except per month data

REVPOR(1)
SHOP
 
 
Three Months Ended
 
 
June 30,
2019
 
September 30,
2019
 
December 31,
2019
 
March 31,
2020
 
June 30,
2020
REVPOR SHOP
 
 
 
 
 
 
 
 
 
 
Portfolio Real Estate Revenues
 
$
182,400

 
$
216,703

 
$
214,314

 
$
196,188

 
$
181,952

Adjustments to Portfolio Real Estate Revenues
 
1,134

 
957

 
742

 
549

 
107

Portfolio Cash Real Estate Revenues
 
$
183,534

 
$
217,660

 
$
215,056

 
$
196,737

 
$
182,059

Other adjustments to REVPOR SHOP(2)
 
(32,927
)
 
(28,945
)
 
(50,116
)
 
(49,938
)
 
(47,386
)
REVPOR SHOP revenues
 
$
150,607

 
$
188,714

 
$
164,939

 
$
146,798

 
$
134,673

 
 
 
 
 
 
 
 
 
 
 
Average occupied units/month
 
10,211

 
11,838

 
9,927

 
8,422

 
7,823

REVPOR SHOP per month(3)
 
$
4,917

 
$
5,314

 
$
5,538

 
$
5,810

 
$
5,738

 
 
 
 
 
 
 
 
 
 
 
SS REVPOR SHOP
 
 
 
 
 
 
 
 
 
 
REVPOR SHOP revenues
 
$
150,607

 
$
188,714

 
$
164,939

 
$
146,798

 
$
134,673

Change in reporting structure(4)
 
—

 
(28,579
)
 
(28,595
)
 
(28,877
)
 
(27,556
)
Other non-SS cash real estate revenues
 
(50,666
)
 
(60,003
)
 
(36,447
)
 
(16,623
)
 
(13,312
)
SS REVPOR SHOP revenues
 
$
99,941

 
$
100,132

 
$
99,898

 
$
101,299

 
$
93,805

 
 
 
 
 
 
 
 
 
 
 
SS average occupied units/month
 
6,532

 
6,562

 
6,567

 
6,522

 
6,098

SS REVPOR SHOP per month(3)
 
$
5,100

 
$
5,087

 
$
5,070

 
$
5,177

 
$
5,128

CCRC
 
 
Three Months Ended
 
 
June 30,
2019
 
September 30,
2019
 
December 31,
2019
 
March 31,
2020
 
June 30,
2020
REVPOR CCRC
 
 
 
 
 
 
 
 
 
 
Portfolio Real Estate Revenues
 
$
52,835

 
$
52,671

 
$
56,642

 
$
113,427

 
$
131,112

Adjustments to Portfolio Real Estate Revenues
 
4,861

 
5,748

 
3,245

 
(177
)
 
(4
)
Portfolio Cash Real Estate Revenues
 
$
57,696

 
$
58,419

 
$
59,887

 
$
113,250

 
$
131,108

Other adjustments to REVPOR CCRC(5)
 
(9,508
)
 
(10,723
)
 
(11,391
)
 
(6,414
)
 
(5,311
)
REVPOR CCRC revenues
 
$
48,188

 
$
47,696

 
$
48,496

 
$
106,836

 
$
125,797

 
 
 
 
 
 
 
 
 
 
 
Average occupied units/month
 
3,053

 
3,032

 
3,056

 
5,473

 
5,979

REVPOR CCRC per month(6)
 
$
5,262

 
$
5,243

 
$
5,290

 
$
6,507

 
$
7,014

______________________________________
(1)
May not add due to rounding.
(2)
Includes revenue for newly completed facilities under lease-up, facilities sold or held for sale, facilities acquired or transitioned to new operators during the relevant period, and assets in redevelopment.
(3)
Represents the current quarter REVPOR divided by a factor of three.
(4)
Represents revenues for assets that converted from senior housing triple-net to SHOP during the year-over-year comparison period.
(5)
Includes revenue from non-refundable entrance fees, facilities converted to a new operating structure during the relevant period, and facilities that are held for sale.
(6) Represents the current quarter REVPOR CCRC divided by a factor of three.

healthpeaklogohorizblkrgba01.jpg
27