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Ventas, Inc. (VTR) SEC Filing 8-K Material Event for the period ending Thursday, May 5, 2022

Ventas Inc

CIK: 740260 Ticker: VTR
Exhibit 99.1

Ventas Reports 2022 First Quarter Results

CHICAGO--(BUSINESS WIRE)--May 5, 2022--Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today reported results for the first quarter ended March 31, 2022.

Highlights

  • Net Income Attributable to Common Stockholders (“Net Income”) per share of $0.10
  • Normalized Funds from Operations* (“Normalized FFO”) per share of $0.79, inclusive of the benefit of $33 million or 8 cents per share of HHS Grants received during the quarter and previously communicated
  • Total Company year-over-year same-store cash Net Operating Income* (“NOI”) growth of 5.8% for the first quarter 2022, excluding the benefit of HHS Grants received
  • First quarter 2022 SHOP segment year-over-year same-store cash NOI* growth of 14.2%, excluding the benefit of HHS Grants received, at the high-end of the guidance range, driven by same-store revenue growth of nearly 10%
  • Approximately $500 million of closed or committed new investments year-to-date, principally in senior housing and life science, research & innovation
  • Second quarter 2022 guidance for Net Income per share of ($0.03) - $0.01, Normalized FFO* per share of $0.69 - $0.73 and year-over-year same-store cash NOI* growth in the SHOP segment of 2 - 10%

CEO Remarks

“We are pleased that we grew first quarter year-over-year Normalized FFO and SHOP same-store cash NOI for the first time since the pandemic began (excluding the benefit of HHS Grants in both periods). These strong results underscore the positive momentum of our high-quality portfolio and the powerful senior housing recovery now underway. Our SHOP communities benefitted from strong demand and pricing power during the quarter, demonstrating the strength, resiliency and potential of the assets, and overcoming inflationary impacts and the effects of COVID-19,” said Debra A. Cafaro, Ventas Chairman and CEO.

“As we look to the second quarter of 2022, we are again projecting that our earnings will benefit from continued attractive year-over-year organic growth in our SHOP segment and contribution from investments in senior housing, life science and medical office over the last twelve months. Based on favorable supply and demand fundamentals, we continue to expect sustained improvement in SHOP same-store cash NOI through 2022. We believe that our steadfast focus on execution and the decisive actions we continue to take position us to drive superior and sustainable value for our shareholders,” Cafaro concluded.

*

This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release for additional information and a reconciliation to the most directly comparable GAAP measure.


First Quarter 2022 Enterprise Results

 

(per share)


 

Quarter Ended March 31,

 

2022

2021

$ Change

% Change

Attributable Net Income (Loss)

$0.10

($0.15)

$0.25

n/a

Nareit FFO*

$0.81

$0.67

$0.14

21%

Normalized FFO*

$0.79

$0.72

$0.07

10%

 

 

 

 

 

*This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release for additional information and a reconciliation to the most directly comparable GAAP measure.

  • The above earnings measures include $32.8 million ($0.08 per share) benefit of HHS Grants (defined below) in the first quarter of 2022 and include $13.6 million ($0.04 per share) benefit of HHS Grants in the first quarter of 2021.

First Quarter 2022 Property Results

 

 

1Q22 (Quarterly Pools) Year-Over-Year
Same-Store Cash NOI* Growth

Business Segment

 

Assets

% Change

% Change
(ex. HHS Grants)1

SHOP

 

321

25.8%

14.2%

Triple-Net

 

331

0.6%

0.6%

Office

 

332

4.6%

4.6%

Total Company

 

984

9.5%

5.8%

 


 

*


This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release for additional information and a reconciliation to the most directly comparable GAAP measure.

1


SHOP same-store growth adjusted to exclude the benefit of HHS Grants received to partially offset direct COVID-19 costs incurred by the Company to date. The HHS Grants are recorded as a contra expense within SHOP operating expenses, net of any applicable fees to SHOP operators. The quarterly pools include a ~$21.1M net benefit attributable to HHS Grants received in 1Q22 and a ~$7.6M net benefit attributable to HHS Grants received in 1Q21.

SHOP Portfolio (37% of Total Portfolio)

Excluding HHS Grants, SHOP year-over-year same-store cash NOI growth of 14.2% in the first quarter of 2022 was driven by continued robust demand, increased occupancy and pricing power, which outpaced inflationary expense pressures and the continuing impacts of COVID-19 in the quarter.

  • Clinical: Consistent with broader US trends, COVID-19 resident and staff confirmed cases increased sharply in January and February in Ventas’s SHOP communities but have since declined.
  • Leading Indicators: Robust demand resulted in leads and move-ins consistently trending at over 100% of pre-pandemic levels in the quarter, outperforming typical seasonal patterns.
  • Revenue: In the first quarter, same-store revenue increased by nearly 10% versus the prior year due to the positive trends in occupancy and RevPOR.
    • Same-store average occupancy grew year-over-year by 420 basis points to 83.0% in the first quarter 2022, ahead of the guidance midpoint of 410 basis points.
    • Same-store RevPOR increased by 4.2% versus the prior year. RevPOR benefited from strong in-place resident rate increases approximating 8% in the first quarter 2022 in the U.S., and improving re-leasing spreads. Pricing for new residents continued to trend positively despite industry occupancy well below stabilized levels.
  • Excluding HHS Grants, same-store operating expenses grew 8% year-over-year, driven by macro inflationary impacts throughout the quarter on labor, utilities and other operating expenses.

Triple-Net Portfolio (31% of Total Portfolio)

  • Triple-Net year-over-year same-store cash NOI increased by 0.6%, driven by contractual escalators, partially offset by reduced payments from select senior housing tenants due to the continued pandemic impact.

Office Portfolio (30% of Total Portfolio)

  • Office year-over-year same-store cash NOI increased by 4.6%, driven by contractual escalators, strong leasing, collection of holdover rent and continued recovery in parking revenue.

Select Investment Activity

Year-to-date in 2022, the Company continued to grow its superior, well positioned portfolio by closing on or committing to approximately $500 million in relationship-driven investments, consistent with its priorities of investing in senior housing and life science, research & innovation:

  • Mangrove Bay: In February 2022, the Company closed on the previously announced acquisition of Mangrove Bay, a Class A senior housing community in the highly sought-after Jupiter, Florida market for $107 million at an attractive in-place yield of nearly 6%.
  • Le Groupe Maurice: Continuing its successful track record of development with its partner Le Groupe Maurice, Ventas announced that it expects to break ground on a new $90 million, 362-unit senior housing development project in the attractive Montreal, Quebec market.
  • 3440 Market: Ventas expanded its presence and offerings to its tenants in the exciting uCity, Philadelphia submarket with the value-add acquisition and intended redevelopment of 3440 Market for $73 million, inclusive of redevelopment costs. Located adjacent to existing Ventas life science buildings, the expected yield after redevelopment is 7%.
  • Medical Office: The Company completed the previously announced acquisition of 18 MOBs comprising 732,000 square feet 100% leased to Ardent Health Services for a twelve-year term. The price was $204 million, reflecting a ~6% GAAP yield. Ventas also completed the $40 million acquisition of Eating Recovery Center, a Class-A behavioral health facility located in Denver, CO at a 6.6% GAAP yield. The asset is 100% net leased with 12 years remaining in the lease term.

Second Quarter 2022 Guidance

The Company currently expects to report second quarter 2022 Net Income (Loss) Attributable to Common Stockholders, Nareit FFO and Normalized FFO per share and same-store cash NOI growth within the following ranges:

 

 

2Q22 Guidance

 

 

Per Share

 

 

Low

 

High

 

 

 

 

 

Net Income (Loss) Attributable to Common Stockholders

 

($0.03)

-

$0.01

Nareit FFO*

 

$0.66

-

$0.70

Normalized FFO*

 

$0.69

-

$0.73

 

 

2Q22 Guidance: Same-Store Cash NOI Growth

 

 

(vs. 2Q21, Quarterly Pools)

 

 

Percentage Change

Business Segment

 

Low

 

High

SHOP1

 

2.0%

-

10.0%

Triple-Net

 

(3.0%)

-

(1.5%)

Office

 

1.75%

-

2.25%

Total Company

 

0.0%

-

3.0%

*


This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release for additional information and a reconciliation to the most directly comparable GAAP measure.

1


Excluding the benefit of HHS Grants in all periods.

Key assumptions underlying the second quarter 2022 guidance include:

  • SHOP: We anticipate approximately 10% year-over-year revenue growth at the midpoint of the same-store cash NOI guidance range driven by the expected combination of approximately 400 basis points of occupancy growth and improved rates. Revenue growth is expected to be partially offset by continued inflationary expense pressure, with the SHOP same-store cash NOI guidance range principally a function of operating expense assumptions.
  • Office: Same-store cash NOI growth is expected to be driven by contractual escalators, leasing and parking. As previously communicated, Normalized FFO will be reduced by ($0.01) per share sequentially due to the proposed redevelopment into high demand lab space at two R&I properties, following the move-out of two tenants enabling the contemplated projects.
  • Triple-Net: As previously communicated, Normalized FFO will be impacted by ($0.01) per share sequentially due to lease resolutions with senior housing triple-net tenants who were materially affected by the COVID-19 pandemic. Ventas expects to receive the benefit of upward future performance in these assets through revenue or NOI-based payments.
  • General and Administrative Expenses: We anticipate the Normalized FFO impact of second quarter general and administrative expenses to be approximately $34 million to $36 million.
  • Transactions: The guidance does not assume any new or unannounced material acquisitions or capital markets activities.
  • Dispositions: We expect disposition proceeds of $200 million principally in the second half of 2022.

Please see below for further discussion and our definitions of non-GAAP measures along with reconciliations to the most directly comparable GAAP measure. We will provide additional detail regarding our second quarter outlook and assumptions on the first quarter 2022 conference call.

Investor Presentation

A presentation outlining the Company’s first quarter results, second quarter guidance and key assumptions, and a business update is posted to the Events & Presentations section of Ventas’s website at ir.ventasreit.com/events-and-presentations. Additional information regarding the Company can be found in its first quarter 2022 supplemental posted at ir.ventasreit.com. The information contained on, or that may be accessed through, our website, including the information contained in the aforementioned presentation and supplemental, is not incorporated by any reference into, and is not part of, this document.

First Quarter 2022 Results Conference Call

Ventas will hold a conference call to discuss this earnings release on Friday, May 6, 2022 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).

The dial-in number for the conference call is (888) 330-3576 (or +1 (646) 960-0672 for international callers), and the participant passcode is 7655497. A live webcast can be accessed from the Investor Relations section of www.ventasreit.com.

A telephonic replay will be available at (800) 770-2030 (or +1 (647) 362-9199 for international callers), passcode 7655497, after the earnings call and will remain available for 30 days. The webcast replay will be posted in the Investor Relations section of www.ventasreit.com.

About Ventas

Ventas Inc., an S&P 500 company, operates at the intersection of two large and dynamic industries – healthcare and real estate. Fueled by powerful demographic demand from growth in the aging population, Ventas owns a diversified portfolio of over 1,200 properties in the United States, Canada, and the United Kingdom. Ventas uses the power of its capital to unlock the value of senior living communities; life science, research & innovation properties; medical office & outpatient facilities, hospitals and other healthcare real estate. A globally-recognized real estate investment trust, Ventas follows a successful long-term strategy, proven over more than 20 years, built on diversification of property types, capital sources and industry leading partners, financial strength and flexibility, consistent and reliable growth and industry leading ESG achievements, managed by a collaborative and experienced team dedicated to its stakeholders.

Non-GAAP Financial Measures

This press release includes certain financial performance measures not defined by generally accepted accounting principles in the United States (“GAAP”). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release. We believe such measures provide investors with additional information concerning our operating performance and a basis to compare our performance with the performance of other REITs. Our definitions and calculations of these non-GAAP measures may not be the same as similar measures reported by other REITs.

These non-GAAP financial measures should not be considered as alternatives to net income attributable to common stockholders (determined in accordance with GAAP) as indicators of our financial performance, as alternatives to cash flow from operating activities (determined in accordance with GAAP), or as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.


Cautionary Statements

Certain of the information contained herein, including intra-quarter operating information and number of confirmed cases of COVID-19, has been provided by our operators and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. 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,” “opportunity,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof.

Forward-looking statements are based on management’s beliefs as well as on a number of assumptions concerning future events. You should not put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made. You are urged to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance, including those made below and in our filings with the Securities and Exchange Commission, such as in the section titled “Cautionary Statements — Summary Risk Factors,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Certain factors that could affect our future results and our ability to achieve our stated goals include, but are not limited to: (a) the impact of the ongoing COVID-19 pandemic and its extended consequences, including of the Delta, Omicron or any other variant, on our revenue, level of profitability, liquidity and overall risk exposure and the implementation and impact of regulations related to the CARES Act and other stimulus legislation and any future COVID-19 relief measures; (b) our ability to achieve the anticipated benefits and synergies from, and effectively integrate, our acquisitions and investments, including our acquisition of New Senior Investment Group Inc.; (c) our exposure and the exposure of our tenants, managers and borrowers to complex healthcare and other regulation and the challenges and expense associated with complying with such regulation; (d) the potential for significant general and commercial claims, legal actions, regulatory proceedings or enforcement actions that could subject us or our tenants, managers or borrowers to increased operating costs and uninsured liabilities; (e) the impact of market and general economic conditions, including economic and financial market events, inflation, changes in interest rates, supply chain pressures, events that affect consumer confidence, our occupancy rates and resident fee revenues, and the actual and perceived state of the real estate markets, labor markets and public capital markets; (f) our ability, and the ability of our tenants, managers and borrowers, to navigate the trends impacting our or their businesses and the industries in which we or they operate; (g) the risk of bankruptcy, insolvency or financial deterioration of our tenants, managers, borrowers and other obligors and our ability to foreclose successfully on the collateral securing our loans and other investments in the event of a borrower default; (h) our ability to identify and consummate future investments in or dispositions of healthcare assets and effectively manage our portfolio opportunities and our investments in co-investment vehicles, joint ventures and minority interests; (i) risks related to development, redevelopment and construction projects; (j) our ability to attract and retain talented employees; (k) the limitations and significant requirements imposed upon our business as a result of our status as a REIT and the adverse consequences (including the possible loss of our status as a REIT) that would result if we are not able to comply; (l) the risk of changes in healthcare law or regulation or in tax laws, guidance and interpretations, particularly as applied to REITs, that could adversely affect us or our tenants, managers or borrowers; (m) increases in our borrowing costs as a result of becoming more leveraged or as a result of changes in interest rates and phasing out of LIBOR rates; (n) our reliance on third parties to operate a majority of our assets and our limited control and influence over such operations and results; (o) our dependency on a limited number of tenants and managers for a significant portion of our revenues and operating income; (p) the adequacy of insurance coverage provided by our policies and policies maintained by our tenants, managers or other counterparties; (q) the occurrence of cyber incidents that could disrupt our operations, result in the loss of confidential information or damage our business relationships and reputation; (r) the impact of merger, acquisition and investment activity in the healthcare industry or otherwise affecting our tenants, managers or borrowers; (s) disruptions to the management and operations of our business and the uncertainties caused by activist investors; and (t) the risk of catastrophic or extreme weather and other natural events and the physical effects of climate change.


CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts; dollars in USD)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2022

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

 

 

 

Land and improvements

$

2,452,474

 

 

$

2,432,065

 

 

$

2,395,751

 

 

$

2,231,836

 

 

$

2,235,773

 

Buildings and improvements

 

26,186,628

 

 

 

25,778,490

 

 

 

25,519,840

 

 

 

24,269,450

 

 

 

24,250,630

 

Construction in progress

 

275,896

 

 

 

269,315

 

 

 

298,982

 

 

 

288,910

 

 

 

310,547

 

Acquired lease intangibles

 

1,373,364

 

 

 

1,369,747

 

 

 

1,372,462

 

 

 

1,200,574

 

 

 

1,212,263

 

Operating lease assets

 

318,679

 

 

 

317,858

 

 

 

323,950

 

 

 

328,707

 

 

 

343,072

 

 

 

30,607,041

 

 

 

30,167,475

 

 

 

29,910,985

 

 

 

28,319,477

 

 

 

28,352,285

 

Accumulated depreciation and amortization

 

(8,624,820

)

 

 

(8,350,637

)

 

 

(8,118,990

)

 

 

(8,189,447

)

 

 

(8,030,524

)

Net real estate property

 

21,982,221

 

 

 

21,816,838

 

 

 

21,791,995

 

 

 

20,130,030

 

 

 

20,321,761

 

Secured loans receivable and investments, net

 

530,388

 

 

 

530,126

 

 

 

530,439

 

 

 

596,171

 

 

 

615,037

 

Investments in unconsolidated real estate entities

 

541,914

 

 

 

523,465

 

 

 

507,880

 

 

 

494,239

 

 

 

471,243

 

Net real estate investments

 

23,054,523

 

 

 

22,870,429

 

 

 

22,830,314

 

 

 

21,220,440

 

 

 

21,408,041

 

Cash and cash equivalents

 

149,599

 

 

 

149,725

 

 

 

143,770

 

 

 

233,837

 

 

 

169,661

 

Escrow deposits and restricted cash

 

49,848

 

 

 

46,872

 

 

 

52,752

 

 

 

40,931

 

 

 

40,551

 

Goodwill

 

1,045,663

 

 

 

1,046,140

 

 

 

1,046,070

 

 

 

1,051,832

 

 

 

1,051,780

 

Assets held for sale

 

26,231

 

 

 

28,399

 

 

 

316,769

 

 

 

90,002

 

 

 

59,860

 

Deferred income tax assets, net

 

11,152

 

 

 

11,152

 

 

 

11,496

 

 

 

11,486

 

 

 

11,610

 

Other assets

 

613,091

 

 

 

565,069

 

 

 

643,253

 

 

 

855,786

 

 

 

810,760

 

Total assets

$

24,950,107

 

 

$

24,717,786

 

 

$

25,044,424

 

 

$

23,504,314

 

 

$

23,552,263

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Senior notes payable and other debt

$

12,413,743

 

 

$

12,027,544

 

 

$

12,078,835

 

 

$

11,761,545

 

 

$

11,759,299

 

Accrued interest

 

93,564

 

 

 

106,602

 

 

 

90,013

 

 

 

105,883

 

 

 

91,390

 

Operating lease liabilities

 

195,668

 

 

 

197,234

 

 

 

199,551

 

 

 

205,484

 

 

 

206,426

 

Accounts payable and other liabilities

 

1,079,596

 

 

 

1,090,254

 

 

 

1,142,822

 

 

 

1,122,171

 

 

 

1,109,279

 

Liabilities related to assets held for sale

 

8,411

 

 

 

10,850

 

 

 

20,518

 

 

 

4,568

 

 

 

3,853

 

Deferred income tax liabilities

 

52,750

 

 

 

59,259

 

 

 

65,196

 

 

 

68,097

 

 

 

65,777

 

Total liabilities

 

13,843,732

 

 

 

13,491,743

 

 

 

13,596,935

 

 

 

13,267,748

 

 

 

13,236,024

 

Redeemable OP unitholder and noncontrolling interests

 

313,685

 

 

 

280,283

 

 

 

280,344

 

 

 

252,662

 

 

 

244,619

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

Ventas stockholders' equity:

 

 

 

 

 

 

 

 

 

Preferred stock, $1.00 par value; 10,000 shares authorized, unissued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.25 par value; 399,623; 399,420; 399,177; 375,204 and 375,068 shares issued at March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively

 

99,888

 

 

 

99,838

 

 

 

99,777

 

 

 

93,784

 

 

 

93,750

 

Capital in excess of par value

 

15,478,467

 

 

 

15,498,956

 

 

 

15,504,210

 

 

 

14,187,577

 

 

 

14,186,692

 

Accumulated other comprehensive loss

 

(59,296

)

 

 

(64,520

)

 

 

(67,601

)

 

 

(58,290

)

 

 

(52,497

)

Retained earnings (deficit)

 

(4,821,653

)

 

 

(4,679,889

)

 

 

(4,459,630

)

 

 

(4,340,052

)

 

 

(4,257,001

)

Treasury stock, 0; 0; 1; 6 and 14 shares issued at March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively

 

 

 

 

 

 

 

(40

)

 

 

(320

)

 

 

(789

)

Total Ventas stockholders' equity

 

10,697,406

 

 

 

10,854,385

 

 

 

11,076,716

 

 

 

9,882,699

 

 

 

9,970,155

 

Noncontrolling interests

 

95,284

 

 

 

91,375

 

 

 

90,429

 

 

 

101,205

 

 

 

101,465

 

Total equity

 

10,792,690

 

 

 

10,945,760

 

 

 

11,167,145

 

 

 

9,983,904

 

 

 

10,071,620

 

Total liabilities and equity

$

24,950,107

 

 

$

24,717,786

 

 

$

25,044,424

 

 

$

23,504,314

 

 

$

23,552,263

 


CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts; dollars in USD)

(unaudited)

 

 

 

 

 

For the Three Months Ended March 31,

 

 

2022

 

 

 

2021

 

Revenues

 

 

 

Rental income:

 

 

 

Triple-net leased

$

151,561

 

 

$

159,885

 

Office

 

200,540

 

 

 

197,455

 

 

 

352,101

 

 

 

357,340

 

Resident fees and services

 

651,121

 

 

 

528,650

 

Office building and other services revenue

 

3,949

 

 

 

4,950

 

Income from loans and investments

 

9,847

 

 

 

19,010

 

Interest and other income

 

536

 

 

 

341

 

Total revenues

 

1,017,554

 

 

 

910,291

 

Expenses

 

 

 

Interest

 

110,794

 

 

 

110,767

 

Depreciation and amortization

 

289,064

 

 

 

314,148

 

Property-level operating expenses:

 

 

 

Senior living

 

475,530

 

 

 

417,829

 

Office

 

63,183

 

 

 

63,946

 

Triple-net leased

 

4,008

 

 

 

4,825

 

 

 

542,721

 

 

 

486,600

 

Office building and other services costs

 

1,313

 

 

 

618

 

General, administrative and professional fees

 

42,998

 

 

 

40,309

 

Loss on extinguishment of debt, net

 

 

 

 

27,090

 

Transaction expenses and deal costs

 

19,992

 

 

 

4,617

 

Allowance on loans receivable and investments

 

(54

)

 

 

(8,902

)

Other

 

(27,190

)

 

 

(9,428

)

Total expenses

 

979,638

 

 

 

965,819

 

Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests

 

37,916

 

 

 

(55,528

)

Loss from unconsolidated entities

 

(4,269

)

 

 

(250

)

Gain on real estate dispositions

 

2,455

 

 

 

2,533

 

Income tax benefit (expense)

 

4,490

 

 

 

(2,153

)

Income (loss) from continuing operations

 

40,592

 

 

 

(55,398

)

Net income (loss)

 

40,592

 

 

 

(55,398

)

Net income attributable to noncontrolling interests

 

1,860

 

 

 

1,811

 

Net income (loss) attributable to common stockholders

$

38,732

 

 

$

(57,209

)

Earnings per common share

 

 

 

Basic:

 

 

 

Income (loss) from continuing operations

$

0.10

 

 

$

(0.15

)

Net income (loss) attributable to common stockholders

 

0.10

 

 

 

(0.15

)

Diluted:1

 

 

 

Income (loss) from continuing operations

$

0.10

 

 

$

(0.15

)

Net income (loss) attributable to common stockholders

 

0.10

 

 

 

(0.15

)

Weighted average shares used in computing earnings per common share

 

 

 

Basic

 

399,297

 

 

 

374,669

 

Diluted

 

403,260

 

 

 

377,922

 

1


Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.


QUARTERLY CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts; dollars in USD)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2022

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

Revenues

 

 

 

 

 

 

 

 

 

Rental income:

 

 

 

 

 

 

 

 

 

Triple-net leased

$

151,561

 

 

$

153,336

 

 

$

181,379

 

 

$

159,223

 

 

$

159,885

 

Office

 

200,540

 

 

 

194,781

 

 

 

201,673

 

 

 

200,388

 

 

 

197,455

 

 

 

352,101

 

 

 

348,117

 

 

 

383,052

 

 

 

359,611

 

 

 

357,340

 

Resident fees and services

 

651,121

 

 

 

647,360

 

 

 

558,039

 

 

 

535,952

 

 

 

528,650

 

Office building and other services revenue

 

3,949

 

 

 

3,924

 

 

 

5,841

 

 

 

5,381

 

 

 

4,950

 

Income from loans and investments

 

9,847

 

 

 

9,577

 

 

 

28,729

 

 

 

17,665

 

 

 

19,010

 

Interest and other income

 

536

 

 

 

13,466

 

 

 

417

 

 

 

585

 

 

 

341

 

Total revenues

 

1,017,554

 

 

 

1,022,444

 

 

 

976,078

 

 

 

919,194

 

 

 

910,291

 

Expenses

 

 

 

 

 

 

 

 

 

Interest

 

110,794

 

 

 

110,455

 

 

 

108,816

 

 

 

110,051

 

 

 

110,767

 

Depreciation and amortization

 

289,064

 

 

 

318,959

 

 

 

313,596

 

 

 

250,700

 

 

 

314,148

 

Property-level operating expenses:

 

 

 

 

 

 

 

 

 

Senior living

 

475,530

 

 

 

515,427

 

 

 

453,659

 

 

 

424,813

 

 

 

417,829

 

Office

 

63,183

 

 

 

61,704

 

 

 

66,401

 

 

 

64,950

 

 

 

63,946

 

Triple-net leased

 

4,008

 

 

 

2,810

 

 

 

3,268

 

 

 

4,432

 

 

 

4,825

 

 

 

542,721

 

 

 

579,941

 

 

 

523,328

 

 

 

494,195

 

 

 

486,600

 

Office building and other services costs

 

1,313

 

 

 

2,635

 

 

 

522

 

 

 

658

 

 

 

618

 

General, administrative and professional fees

 

42,998

 

 

 

28,602

 

 

 

30,259

 

 

 

30,588

 

 

 

40,309

 

Loss (gain) on extinguishment of debt, net

 

 

 

 

2,491

 

 

 

29,792

 

 

 

(74

)

 

 

27,090

 

Transaction expenses and deal costs

 

19,992

 

 

 

19,318

 

 

 

22,662

 

 

 

721

 

 

 

4,617

 

Allowance on loans receivable and investments

 

(54

)

 

 

(61

)

 

 

(60

)

 

 

(59

)

 

 

(8,902

)

Other

 

(27,190

)

 

 

26,355

 

 

 

33,673

 

 

 

(13,490

)

 

 

(9,428

)

Total expenses

 

979,638

 

 

 

1,088,695

 

 

 

1,062,588

 

 

 

873,290

 

 

 

965,819

 

Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests

 

37,916

 

 

 

(66,251

)

 

 

(86,510

)

 

 

45,904

 

 

 

(55,528

)

(Loss) income from unconsolidated entities

 

(4,269

)

 

 

(2,306

)

 

 

2,772

 

 

 

4,767

 

 

 

(250

)

Gain on real estate dispositions

 

2,455

 

 

 

24,705

 

 

 

150,292

 

 

 

41,258

 

 

 

2,533

 

Income tax benefit (expense)

 

4,490

 

 

 

4,747

 

 

 

(3,780

)

 

 

(3,641

)

 

 

(2,153

)

Income (loss) from continuing operations

 

40,592

 

 

 

(39,105

)

 

 

62,774

 

 

 

88,288

 

 

 

(55,398

)

Net income (loss)

 

40,592

 

 

 

(39,105

)

 

 

62,774

 

 

 

88,288

 

 

 

(55,398

)

Net income attributable to noncontrolling interests

 

1,860

 

 

 

1,749

 

 

 

2,094

 

 

 

1,897

 

 

 

1,811

 

Net income (loss) attributable to common stockholders

$

38,732

 

 

$

(40,854

)

 

$

60,680

 

 

$

86,391

 

 

$

(57,209

)

Earnings per common share

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$

0.10

 

 

$

(0.10

)

 

$

0.16

 

 

$

0.24

 

 

$

(0.15

)

Net income (loss) attributable to common stockholders

 

0.10

 

 

 

(0.10

)

 

 

0.16

 

 

 

0.23

 

 

 

(0.15

)

Diluted:1

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$

0.10

 

 

$

(0.10

)

 

$

0.16

 

 

$

0.23

 

 

$

(0.15

)

Net income (loss) attributable to common stockholders

 

0.10

 

 

 

(0.10

)

 

 

0.16

 

 

 

0.23

 

 

 

(0.15

)

Weighted average shares used in computing earnings per common share

 

 

 

 

 

 

 

 

 

Basic

 

399,297

 

 

 

399,142

 

 

 

381,996

 

 

 

375,067

 

 

 

374,669

 

Diluted

 

403,260

 

 

 

403,108

 

 

 

385,523

 

 

 

378,408

 

 

 

377,922

 

 

 

 

 

 

 

 

 

 

 

1


Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.


CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands USD)

(unaudited)

 

For the Three Months Ended March 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

40,592

 

 

$

(55,398

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

289,064

 

 

 

314,148

 

Amortization of deferred revenue and lease intangibles, net

 

(17,401

)

 

 

(14,766

)

Other non-cash amortization

 

3,109

 

 

 

5,272

 

Allowance on loans receivable and investments

 

(54

)

 

 

(8,902

)

Stock-based compensation

 

15,796

 

 

 

16,072

 

Straight-lining of rental income

 

(3,841

)

 

 

(3,863

)

Loss on extinguishment of debt, net

 

 

 

 

27,090

 

Gain on real estate dispositions

 

(2,455

)

 

 

(2,533

)

Gain on real estate loan investments

 

 

 

 

(74

)

Income tax (benefit) expense

 

(5,805

)

 

 

503

 

Loss from unconsolidated entities

 

4,269

 

 

 

250

 

Distributions from unconsolidated entities

 

4,356

 

 

 

3,897

 

Other

 

(24,324

)

 

 

(14,379

)

Changes in operating assets and liabilities:

 

 

 

Increase in other assets

 

(18,177

)

 

 

(5,100

)

Decrease in accrued interest

 

(13,201

)

 

 

(20,234

)

Increase (decrease) in accounts payable and other liabilities

 

2,625

 

 

 

(4,390

)

Net cash provided by operating activities

 

274,553

 

 

 

237,593

 

Cash flows from investing activities:

 

 

 

Net investment in real estate property

 

(343,792

)

 

 

(210

)

Investment in loans receivable

 

(5,117

)

 

 

(186

)

Proceeds from real estate disposals

 

6,124

 

 

 

8,083

 

Proceeds from loans receivable

 

177

 

 

 

16,419

 

Development project expenditures

 

(37,591

)

 

 

(58,598

)

Capital expenditures

 

(36,728

)

 

 

(29,674

)

Investment in unconsolidated entities

 

(23,790

)

 

 

(38,452

)

Insurance proceeds for property damage claims

 

3,391

 

 

 

6

 

Net cash used in investing activities

 

(437,326

)

 

 

(102,612

)

Cash flows from financing activities:

 

 

 

Net change in borrowings under revolving credit facilities

 

(9,867

)

 

 

5,144

 

Net change in borrowings under commercial paper program

 

356,674

 

 

 

214,978

 

Proceeds from debt

 

70,029

 

 

 

31,157

 

Repayment of debt

 

(65,000

)

 

 

(445,050

)

Purchase of noncontrolling interests

 

(170

)

 

 

 

Payment of deferred financing costs

 

(427

)

 

 

(17,343

)

Issuance of common stock, net

 

 

 

 

11,075

 

Cash distribution to common stockholders

 

(180,021

)

 

 

(168,763

)

Cash distribution to redeemable OP unitholders

 

(1,534

)

 

 

(1,842

)

Cash issued for redemption of OP Units

 

 

 

 

(25

)

Contributions from noncontrolling interests

 

19

 

 

 

5

 

Distributions to noncontrolling interests

 

(3,983

)

 

 

(2,653

)

Proceeds from stock option exercises

 

5,794

 

 

 

2,106

 

Other

 

(6,132

)

 

 

(5,856

)

Net cash provided by (used in) financing activities

 

165,382

 

 

 

(377,067

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

2,609

 

 

 

(242,086

)

Effect of foreign currency translation

 

241

 

 

 

658

 

Cash, cash equivalents and restricted cash at beginning of period

 

196,597

 

 

 

451,640

 

Cash, cash equivalents and restricted cash at end of period

$

199,447

 

 

$

210,212

 


CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Dollars in thousands USD)

(unaudited)

 

 

 

 

 

For the Three Months Ended March 31,

 

 

2022

 

 

2021

Supplemental schedule of non-cash activities:

 

 

 

Assets acquired and liabilities assumed from acquisitions and other:

 

 

 

Real estate investments

$

3,171

 

$

468

Other assets

 

47

 

 

Other liabilities

 

2,624

 

 

Deferred income tax liability

 

594

 

 

Noncontrolling interests

 

 

 

468


QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands USD, unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2022

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

$

40,592

 

 

$

(39,107

)

 

$

62,774

 

 

$

88,288

 

 

$

(55,398

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

289,064

 

 

 

318,959

 

 

 

313,596

 

 

 

250,700

 

 

 

314,148

 

Amortization of deferred revenue and lease intangibles, net

 

(17,401

)

 

 

(17,175

)

 

 

(40,069

)

 

 

(16,785

)

 

 

(14,766

)

Other non-cash amortization

 

3,109

 

 

 

3,023

 

 

 

4,567

 

 

 

4,847

 

 

 

5,272

 

Allowance on loans receivable and investments

 

(54

)

 

 

(61

)

 

 

(60

)

 

 

(59

)

 

 

(8,902

)

Stock-based compensation

 

15,796

 

 

 

5,801

 

 

 

4,700

 

 

 

5,393

 

 

 

16,072

 

Straight-lining of rental income

 

(3,841

)

 

 

(4,302

)

 

 

(2,999

)

 

 

(3,304

)

 

 

(3,863

)

Loss (gain) on extinguishment of debt, net

 

 

 

 

2,491

 

 

 

29,792

 

 

 

(74

)

 

 

27,090

 

Gain on real estate dispositions

 

(2,455

)

 

 

(24,705

)

 

 

(150,292

)

 

 

(41,258

)

 

 

(2,533

)

Gain on real estate loan investments

 

 

 

 

558

 

 

 

(1,932

)

 

 

 

 

 

(74

)

Income tax (benefit) expense

 

(5,805

)

 

 

(5,880

)

 

 

2,146

 

 

 

2,007

 

 

 

503

 

Loss (income) from unconsolidated entities

 

4,269

 

 

 

2,306

 

 

 

(2,767

)

 

 

(4,762

)

 

 

250

 

Distributions from unconsolidated entities

 

4,356

 

 

 

9,860

 

 

 

2,986

 

 

 

2,583

 

 

 

3,897

 

Other

 

(24,324

)

 

 

27,236

 

 

 

34,011

 

 

 

(20,462

)

 

 

(14,379

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Increase in other assets

 

(18,177

)

 

 

(5,520

)

 

 

(23,433

)

 

 

(20,518

)

 

 

(5,100

)

(Decrease) increase in accrued interest

 

(13,201

)

 

 

16,492

 

 

 

(16,682

)

 

 

14,502

 

 

 

(20,234

)

Increase (decrease) in accounts payable and other liabilities

 

2,625

 

 

 

(24,175

)

 

 

15,121

 

 

 

30,165

 

 

 

(4,390

)

Net cash provided by operating activities

 

274,553

 

 

 

265,801

 

 

 

231,459

 

 

 

291,263

 

 

 

237,593

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Net investment in real estate property

 

(343,792

)

 

 

(265,842

)

 

 

(1,103,000

)

 

 

 

 

 

(210

)

Investment in loans receivable

 

(5,117

)

 

 

(105

)

 

 

(101

)

 

 

(97

)

 

 

(186

)

Proceeds from real estate disposals

 

6,124

 

 

 

343,135

 

 

 

381,453

 

 

 

107,767

 

 

 

8,083

 

Proceeds from loans receivable

 

177

 

 

 

45,391

 

 

 

266,225

 

 

 

20,056

 

 

 

16,419

 

Development project expenditures

 

(37,591

)

 

 

(43,045

)

 

 

(73,755

)

 

 

(72,296

)

 

 

(58,598

)

Capital expenditures

 

(36,728

)

 

 

(65,964

)

 

 

(45,189

)

 

 

(44,448

)

 

 

(29,674

)

Distributions from unconsolidated entities

 

 

 

 

 

 

 

17,847

 

 

 

 

 

 

 

Investment in unconsolidated entities

 

(23,790

)

 

 

(22,151

)

 

 

(38,829

)

 

 

(29,859

)

 

 

(38,452

)

Insurance proceeds for property damage claims

 

3,391

 

 

 

784

 

 

 

111

 

 

 

384

 

 

 

6

 

Net cash used in investing activities

 

(437,326

)

 

 

(7,797

)

 

 

(595,238

)

 

 

(18,493

)

 

 

(102,612

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Net change in borrowings under revolving credit facilities

 

(9,867

)

 

 

18,666

 

 

 

(39,934

)

 

 

(109,275

)

 

 

5,144

 

Net change in borrowings under commercial paper program

 

356,674

 

 

 

(90,014

)

 

 

199,959

 

 

 

(44,994

)

 

 

214,978

 

Proceeds from debt

 

70,029

 

 

 

619,419

 

 

 

646,593

 

 

 

237,129

 

 

 

31,157

 

Repayment of debt

 

(65,000

)

 

 

(610,581

)

 

 

(933,085

)

 

 

(120,901

)

 

 

(445,050

)

Purchase of noncontrolling interests

 

(170

)

 

 

(12,739

)

 

 

(11,485

)

 

 

 

 

 

 

Payment of deferred financing costs

 

(427

)

 

 

(3,558

)

 

 

(5,832

)

 

 

(433

)

 

 

(17,343

)

Issuance of common stock, net