Ventas, Inc. (NYSE: VTR) ("Ventas" or the "Company") today announced strong earnings on a healthy balance sheet for the second quarter of 2016, driven by excellent performance from the Company's high-quality healthcare and senior living properties and accretive acquisitions:
  • Income from continuing operations per diluted common share for the quarter ended June 30, 2016 grew 8 percent to $0.40 compared to the 2015 period.
  • Normalized Funds From Operations ("FFO") for the quarter ended June 30, 2016 grew 7 percent to $1.04 per diluted common share on a comparable basis ("Comparable"), which adjusts all prior periods for the effects of the successful spin off (the "Spin-Off") of Care Capital Properties, Inc. ("CCP") (NYSE: CCP) in August 2015 as if the Spin-Off were completed January 1, 2014.
  • Reported FFO per diluted common share, as defined by the National Association of Real Estate Investment Trusts ("NAREIT FFO"), for the quarter ended June 30, 2016 was $1.04, 10 percent lower compared to the 2015 period principally due to the Spin-Off.

Consistent Growth and Income on a Strong Balance Sheet

"We showed great momentum at Ventas in the second quarter. We delivered strong earnings growth for our shareholders, continued to improve our excellent balance sheet and announced an exciting acquisition of life science and medical real estate assets," Ventas Chairman and Chief Executive Officer Debra A. Cafaro said. "With our team aligned and productive, our carefully curated portfolio performing well and our operating partners rising to the top, the Ventas Advantage is powering consistent superior results.

"We look forward to completing our planned $1.5 billion acquisition of Wexford Science & Technology's life science and medical real estate assets leased by leading universities, academic medical centers and research companies," Cafaro added. "The addition of Wexford to our high-quality portfolio of healthcare and senior living properties reinforces our position as the premier provider of capital at the intersection of healthcare and real estate."

Second Quarter Portfolio Performance

Same-store cash net operating income ("NOI") growth for the Company's quarterly same-store total portfolio (1,186 assets) was 3.5 percent on a reported basis for the quarter ended June 30, 2016. Reported quarterly same-store results by segment follow:
  • The seniors housing operating portfolio ("SHOP") same-store cash NOI grew 2.1 percent, in line with expectations.
  • The triple net leased portfolio same-store cash NOI grew 6.2 percent. Second quarter 2016 cash NOI results benefited from a $3.5 million cash fee received from Kindred Healthcare, Inc. (NYSE: KND). Excluding the Kindred fee, triple net same-store cash NOI grew 4.1 percent in the quarter.
  • Medical office building ("MOB") portfolio same-store cash NOI grew 0.8 percent.

Second Quarter & Other Highlights
  • The Company made $65 million in investments in the second quarter 2016, including funding $30 million in asset acquisitions and $35 million of high-quality development and redevelopment projects.
  • In the quarter, Ventas issued and sold under its "at the market" ("ATM") equity offering program a total of 3.5 million shares of common stock for aggregate gross proceeds of $232 million. ATM issuances in the first half of 2016 totaled 6.1 million shares and $384 million in gross proceeds.
  • The Company retired $550 million in 1.55 percent 3-year senior unsecured notes maturing in September 2016 through the issuance of $400 million in 3.125 percent 7-year senior unsecured notes and other sources.
  • The Company's credit profile was exceptionally strong at quarter-end, including:
    • 5.8x net debt to EBITDA ratio
    • 30 percent debt to total capitalization
    • 4.6x fixed charge coverage
  • The Company currently has an outstanding liquidity position, with $1.8 billion available under its revolving credit facility and $669 million of cash or cash equivalents.

Wexford Acquisition
  • In July 2016, Ventas announced its plan to acquire substantially all of the life science and medical real estate assets of Wexford Science & Technology, LLC. ("Wexford") from affiliates of Blackstone Real Estate Partners VIII L.P. for $1.5 billion in cash. The accretive acquisition will add a related business to Ventas's diverse portfolio with 25 class-A assets that are leased by leading universities, medical centers and research companies, including Yale University, the University of Pennsylvania Health System, Duke University and Wake Forest University. The expected cash yield on the 23 stabilized assets is 6.8 percent. The transaction is subject to satisfaction of customary closing conditions and is expected to close in the fourth quarter of 2016.
  • To pre-fund a portion of the Wexford acquisition, in July Ventas issued and sold 10.3 million shares of common stock in an underwritten public offering for total proceeds of $736 million. The remaining portion of the purchase price is expected to be sourced through debt issuance and other sources including disposition proceeds.

Continued Governance and Leadership Excellence

  • The Company announced the addition of Roxanne M. Martino and Walter C. Rakowich to its Board of Directors (the "Board"), underscoring Ventas's commitment to excellence through strong corporate governance, Board refreshment, director independence and diversity.
  • Douglas Crocker II, who served the Company as independent presiding director for 13 years, retired from the Board in connection with the Company's retirement policy. James D. ("Denny") Shelton was appointed to serve as the Company's independent presiding director.
  • Ventas director Melody C. Barnes was recognized as one of the "Most Influential Black Corporate Directors" by Savoy magazine.
  • Forbes named Ventas Chairman and Chief Executive Officer Debra A. Cafaro as one of the "World's 100 Most Powerful Women" as well as first among "Top-Performing Women CEOs, Ranked by Total Return."

Updated 2016 Guidance

Due to strong first half 2016 portfolio performance, total reported Company full year 2016 same-store cash NOI for the 1,044 assets in the full year same-store pool is now estimated to grow 2 to 3 percent in 2016, an increase from the Company's previous range of 1.5 to 3 percent. In addition, SHOP same-store cash NOI is now forecast to grow 1.5 to 3 percent, up from previous guidance of 1 to 3 percent, and triple-net leased portfolio same-store cash NOI is now forecast to grow 3.5 to 4 percent, up from previous guidance of 2.5 to 3.5 percent.

Ventas currently expects its 2016 income from continuing operations per diluted share to range between $1.46 and $1.59. The Company expects its reported normalized FFO per diluted share to now range between $4.05 and $4.13, representing 3 to 5 percent per share growth over 2015 on a Comparable basis. The modest reduction from previous guidance principally reflects the dilutive impact of pre-funding a portion of the Wexford acquisition with $736 million of equity and additional deleveraging, partially offset by expected Wexford accretion. For the same reasons and Wexford-related deal costs, the Company now expects its NAREIT reported FFO per diluted share to range between $4.05 and $4.13.

The Company continues to expect to complete $500 million in total 2016 dispositions; it has already closed $75 million year-to-date. Consistent with its practice, the Company's guidance does not include any further material investments, dispositions or capital activity. A reconciliation of the Company's guidance to the Company's projected GAAP earnings is included in this press release.

The Company's guidance is based on a number of other assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results.

Second Quarter Conference Call

Ventas will hold a conference call to discuss this earnings release today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The dial-in number for the conference call is (844) 776-7841 (or (661) 378-9542 for international callers). The participant passcode is "Ventas." The conference call is being webcast live by NASDAQ OMX and can be accessed at the Company's website at www.ventasreit.com. A replay of the webcast will be available following the call online, or by calling (855) 859-2056 (or (404) 537-3406 for international callers), passcode 47866264, beginning at approximately 2:00 p.m. Eastern Time and will remain for 36 days.

Ventas, Inc., an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of approximately 1,300 assets in the United States, Canada and the United Kingdom consists of seniors housing communities, medical office buildings, skilled nursing facilities, specialty hospitals and general acute care hospitals. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. More information about Ventas and Lillibridge can be found at www.ventasreit.com and www.lillibridge.com.

Supplemental information regarding the Company can be found on the Company's website under the "Investor Relations" section or at www.ventasreit.com/investor-relations/annual-reports---supplemental-information. A comprehensive listing of the Company's properties is available at www.ventasreit.com/our-portfolio/properties-by-stateprovince.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company's or its tenants', operators', borrowers' or managers' expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, merger or acquisition integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust ("REIT"), plans and objectives of management for future operations and statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will" and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and actual results may differ from the Company's expectations. The Company does not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.

The Company's actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Company's filings with the Securities and Exchange Commission. These factors include without limitation: (a) the ability and willingness of the Company's tenants, operators, borrowers, managers and other third parties to satisfy their obligations under their respective contractual arrangements with the Company, including, in some cases, their obligations to indemnify, defend and hold harmless the Company from and against various claims, litigation and liabilities; (b) the ability of the Company's tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including without limitation obligations under their existing credit facilities and other indebtedness; (c) the Company's success in implementing its business strategy and the Company's ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (d) macroeconomic conditions such as a disruption of or lack of access to the capital markets, changes in the debt rating on U.S. government securities, default or delay in payment by the United States of its obligations, and changes in the federal or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates; (e) the nature and extent of future competition, including new construction in the markets in which the Company's seniors housing communities and medical office buildings ("MOBs") are located; (f) the extent of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates; (g) increases in the Company's borrowing costs as a result of changes in interest rates and other factors; (h) the ability of the Company's tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of the Company's properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients; (i) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and the effect of those changes on the Company's revenues, earnings and funding sources; (j) the Company's ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (k) the Company's ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (l) final determination of the Company's taxable net income for the year ended December 31, 2015 and for the year ending December 31, 2016; (m) the ability and willingness of the Company's tenants to renew their leases with the Company upon expiration of the leases, the Company's ability to reposition its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant; (n) risks associated with the Company's senior living operating portfolio, such as factors that can cause volatility in the Company's operating income and earnings generated by those properties, including without limitation national and regional economic conditions, costs of food, materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties; (o) changes in exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (p) year-over-year changes in the Consumer Price Index or the UK Retail Price Index and the effect of those changes on the rent escalators contained in the Company's leases and the Company's earnings; (q) the Company's ability and the ability of its tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers; (r) the impact of increased operating costs and uninsured professional liability claims on the Company's liquidity, financial condition and results of operations or that of the Company's tenants, operators, borrowers and managers, and the ability of the Company and the Company's tenants, operators, borrowers and managers to accurately estimate the magnitude of those claims; (s) risks associated with the Company's MOB portfolio and operations, including the Company's ability to successfully design, develop and manage MOBs and to retain key personnel; (t) the ability of the hospitals on or near whose campuses the Company's MOBs are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups; (u) risks associated with the Company's investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners' financial condition; (v) the impact of market or issuer events on the liquidity or value of the Company's investments in marketable securities; (w) consolidation activity in the seniors housing and healthcare industries resulting in a change of control of, or a competitor's investment in, one or more of the Company's tenants, operators, borrowers or managers or significant changes in the senior management of the Company's tenants, operators, borrowers or managers; (x) the impact of litigation or any financial, accounting, legal or regulatory issues that may affect the Company or its tenants, operators, borrowers or managers; and (y) changes in accounting principles, or their application or interpretation, and the Company's ability to make estimates and the assumptions underlying the estimates, which could have an effect on the Company's earnings.
 
CONSOLIDATED BALANCE SHEETS
As of June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015
(In thousands, except per share amounts)
         
June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
 
Assets
Real estate investments:
Land and improvements $ 2,041,880 $ 2,060,247 $ 2,056,428 $ 2,068,467 $ 2,016,281
Buildings and improvements 20,272,554 20,395,386 20,309,599 20,220,624 19,247,902
Construction in progress 127,647 119,215 92,005 124,381 129,186
Acquired lease intangibles 1,332,173   1,343,187   1,344,422   1,347,493   1,214,702  
23,774,254 23,918,035 23,802,454 23,760,965 22,608,071
Accumulated depreciation and amortization (4,560,504 ) (4,409,554 ) (4,177,234 ) (3,972,544 ) (3,780,388 )
Net real estate property 19,213,750 19,508,481 19,625,220 19,788,421 18,827,683
Secured loans receivable and investments, net 1,003,561 1,002,598 857,112 766,707 762,312
Investments in unconsolidated real estate entities 96,952   98,120   95,707   96,208   85,461  
Net real estate investments 20,314,263 20,609,199 20,578,039 20,651,336 19,675,456
Cash and cash equivalents 57,322 51,701 53,023 65,231 60,532
Escrow deposits and restricted cash 65,626 76,710 77,896 74,491 193,960
Goodwill 1,043,479 1,044,983 1,047,497 1,052,321 1,058,607
Assets held for sale 195,271 54,263 93,060 152,014 2,822,553
Other assets 417,511   424,436   412,403   418,584   395,770  
Total assets $ 22,093,472   $ 22,261,292   $ 22,261,918   $ 22,413,977   $ 24,206,878  
 
Liabilities and equity
Liabilities:
Senior notes payable and other debt $ 10,901,131 $ 11,247,730 $ 11,206,996 $ 11,284,957 $ 11,456,038
Accrued interest 80,157 66,988 80,864 67,440 77,713
Accounts payable and other liabilities 735,287 738,327 779,380 791,556 784,547
Liabilities related to assets held for sale 88,967 12,625 34,340 48,860 225,269
Deferred income taxes 320,468   333,354   338,382   352,658   370,161  
Total liabilities 12,126,010 12,399,024 12,439,962 12,545,471 12,913,728
 
Redeemable OP unitholder and noncontrolling interests 217,686 191,739 196,529 198,832 199,404
 
Commitments and contingencies
 
Equity:
Ventas stockholders' equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued
Common stock, $0.25 par value; 341,055; 337,486; 334,386; 333,027 and 331,965 shares issued at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively 85,246 84,354 83,579 83,238 82,982
Capital in excess of par value 11,961,951 11,758,306 11,602,838 11,523,312 12,708,898
Accumulated other comprehensive (loss) income (44,195 ) (19,932 ) (7,565 ) (592 ) 10,180
Retained earnings (deficit) (2,313,287 ) (2,208,474 ) (2,111,958 ) (1,992,848 ) (1,772,529 )
Treasury stock, 0; 1; 44; 61 and 28 shares at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively   (59 ) (2,567 ) (3,675 ) (2,048 )
Total Ventas stockholders' equity 9,689,715 9,614,195 9,564,327 9,609,435 11,027,483
Noncontrolling interest 60,061   56,334   61,100   60,239   66,263  
Total equity 9,749,776   9,670,529   9,625,427   9,669,674   11,093,746  
Total liabilities and equity $ 22,093,472   $ 22,261,292   $ 22,261,918   $ 22,413,977   $ 24,206,878  

 
CONSOLIDATED STATEMENTS OF INCOME
For the three and six months ended June 30, 2016 and 2015
(In thousands, except per share amounts)
       
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Revenues:
Rental income:
Triple-net leased $ 210,119 $ 182,006 $ 424,606 $ 370,563
Medical office buildings 144,087   140,472   288,223   277,532  
354,206 322,478 712,829 648,095
Resident fees and services 464,437 454,645 928,413 901,559
Medical office building and other services revenue 5,504 9,408 12,689 19,951
Income from loans and investments 24,146 25,215 46,532 47,268
Interest and other income 111   174   230   645  
Total revenues 848,404 811,920 1,700,693 1,617,518
Expenses:
Interest 103,665 83,959 206,938 166,287
Depreciation and amortization 221,961 214,711 458,348 430,930
Property-level operating expenses:
Senior living 307,989 299,252 620,530 597,614
Medical office buildings 43,966   43,410   87,647   85,847  
351,955 342,662 708,177 683,461
Medical office building services costs 1,852 5,764 5,303 12,682
General, administrative and professional fees 32,094 33,959 63,820 68,285
Loss (gain) on extinguishment of debt, net 2,468 (455 ) 2,782 (434 )
Merger-related expenses and deal costs 7,224 12,265 8,856 42,878
Other 2,303   4,279   6,471   9,153  
Total expenses 723,522   697,144   1,460,695   1,413,242  
Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest 124,882 114,776 239,998 204,276
Income (loss) from unconsolidated entities 1,418 9 1,220 (242 )
Income tax benefit 11,549   9,789   19,970   17,039  
Income from continuing operations 137,849 124,574 261,188 221,073
Discontinued operations (148 ) 18,243 (637 ) 35,817
Gain on real estate dispositions 5,739   7,469   31,923   14,155  
Net income 143,440 150,286 292,474 271,045
Net income attributable to noncontrolling interest 278   465   332   782  
Net income attributable to common stockholders $ 143,162   $ 149,821   $ 292,142   $ 270,263  
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.42 $ 0.39 $ 0.87 $ 0.71
Discontinued operations (0.00 ) 0.06   (0.00 ) 0.11  
Net income attributable to common stockholders $ 0.42   $ 0.45   $ 0.87   $ 0.82  
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.42 $ 0.40 $ 0.86 $ 0.71
Discontinued operations (0.00 ) 0.05   (0.00 ) 0.11  
Net income attributable to common stockholders $ 0.42   $ 0.45   $ 0.86   $ 0.82  
 
Weighted average shares used in computing earnings per common share:
Basic 338,901 330,715 337,230 327,890
Diluted 342,571 334,026 340,851 331,424
 
Dividends declared per common share $ 0.73 $ 0.79 $ 1.46 $ 1.58

 
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
         
2016 Quarters 2015 Quarters
Second First Fourth Third Second
 
Revenues:
Rental income:
Triple-net leased $ 210,119 $ 214,487 $ 208,210 $ 201,028 $ 182,006
Medical office buildings 144,087   144,136   145,958   142,755   140,472  
354,206 358,623 354,168 343,783 322,478
Resident fees and services 464,437 463,976 454,871 454,825 454,645
Medical office building and other services revenue 5,504 7,185 11,541 10,000 9,408
Income from loans and investments 24,146 22,386 20,361 18,924 25,215
Interest and other income 111   119   333   74   174  

Total revenues
848,404 852,289 841,274 827,606 811,920
 
Expenses:
Interest 103,665 103,273 103,692 97,135 83,959
Depreciation and amortization 221,961 236,387 236,795 226,332 214,711
Property-level operating expenses:
Senior living 307,989 312,541 307,261 304,540 299,252
Medical office buildings 43,966   43,681   45,073   43,305   43,410  
351,955 356,222 352,334 347,845 342,662
Medical office building services costs 1,852 3,451 7,467 6,416 5,764
General, administrative and professional fees 32,094 31,726 27,636 32,114 33,959
Loss (gain) on extinguishment of debt, net 2,468 314 (486 ) 15,331 (455 )
Merger-related expenses and deal costs 7,224 1,632 (2,079 ) 62,145 12,265
Other 2,303   4,168   4,009   4,795   4,279  
Total expenses 723,522   737,173   729,368   792,113   697,144  
 
Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest 124,882 115,116 111,906 35,493 114,776
Income (loss) from unconsolidated entities 1,418 (198 ) (223 ) (955 ) 9
Income tax benefit 11,549   8,421   11,548   10,697   9,789  
Income from continuing operations 137,849 123,339 123,231 45,235 124,574
Discontinued operations (148 ) (489 ) (2,331 ) (22,383 ) 18,243
Gain on real estate dispositions 5,739   26,184   4,160   265   7,469  
Net income 143,440 149,034 125,060 23,117 150,286
Net income attributable to noncontrolling interest 278   54   332   265   465  
Net income attributable to common stockholders $ 143,162   $ 148,980   $ 124,728   $ 22,852   $ 149,821  
 
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.42 $ 0.44 $ 0.38 $ 0.14 $ 0.39
Discontinued operations (0.00 ) (0.00 ) (0.01 ) (0.07 ) 0.06  
Net income attributable to common stockholders $ 0.42   $ 0.44   $ 0.37   $ 0.07   $ 0.45  
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.42 $ 0.44 $ 0.38 $ 0.14 $ 0.40
Discontinued operations (0.00 ) (0.00 ) (0.01 ) (0.07 ) 0.05  
Net income attributable to common stockholders $ 0.42   $ 0.44   $ 0.37   $ 0.07   $ 0.45  
 
Weighted average shares used in computing earnings per common share:
Basic 338,901 335,559 332,914 332,491 330,715
Diluted 342,571 339,202 336,406 336,338 334,026

 
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2016 and 2015
(In thousands)
  2016   2015
Cash flows from operating activities:
Net income $ 292,474 $ 271,045
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amounts in discontinued operations) 458,348 496,660
Amortization of deferred revenue and lease intangibles, net (10,090 ) (13,630 )
Other non-cash amortization 4,687 909
Stock-based compensation 10,037 11,192
Straight-lining of rental income, net (15,426 ) (16,761 )
Loss (gain) on extinguishment of debt, net 2,782 (434 )
Gain on real estate dispositions (including amounts in discontinued operations) (31,923 ) (14,432 )
Gain on real estate loan investments (33 )
Gain on sale of marketable debt securities (5,800 )
Income tax benefit (21,443 ) (18,240 )
(Income) loss from unconsolidated entities (1,220 ) 242
Distributions from unconsolidated entities 3,873 14,973
Other 724 3,106
Changes in operating assets and liabilities:
Decrease (increase) in other assets 10,609 (9,711 )
(Decrease) increase in accrued interest (769 ) 16,108
Decrease in accounts payable and other liabilities (46,155 ) (17,503 )
Net cash provided by operating activities 656,475 717,724
Cash flows from investing activities:
Net investment in real estate property (34,453 ) (1,253,910 )
Investment in loans receivable and other (152,450 ) (55,659 )
Proceeds from real estate disposals 63,561 273,191
Proceeds from loans receivable 7,644 93,275
Proceeds from sale or maturity of marketable securities 57,225
Funds held in escrow for future development expenditures 4,003
Development project expenditures (69,679 ) (62,630 )
Capital expenditures (46,925 ) (43,429 )
Other (4,265 ) (8,813 )
Net cash used in investing activities (236,567 ) (996,747 )
Cash flows from financing activities:
Net change in borrowings under credit facility 24,304 (321,334 )
Proceeds from debt 416,217 1,107,971
Repayment of debt (740,337 ) (278,442 )
Purchase of noncontrolling interest (1,604 ) (3,816 )
Payment of deferred financing costs (3,844 ) (14,608 )
Issuance of common stock, net 377,739 352,167
Cash distribution to common stockholders (493,471 ) (516,404 )
Cash distribution to redeemable OP unitholders (4,437 ) (4,697 )
Purchases of redeemable OP units (33,188 )
Contributions from noncontrolling interest 5,680
Distributions to noncontrolling interest (3,582 ) (9,467 )
Other 7,883   5,928  
Net cash (used in) provided by financing activities (415,452 ) 284,110  
Net increase in cash and cash equivalents 4,456 5,087
Effect of foreign currency translation on cash and cash equivalents (157 ) 97
Cash and cash equivalents at beginning of period 53,023   55,348  
Cash and cash equivalents at end of period $ 57,322   $ 60,532  
 
Supplemental schedule of non-cash activities:
Assets and liabilities assumed from acquisitions:
Real estate investments $ 8,665 $ 2,563,501
Utilization of funds held for an Internal Revenue Code Section 1031 exchange (6,954 ) (8,911 )
Other assets acquired 861 16,505
Debt assumed 177,857
Other liabilities 2,638 49,788
Deferred income tax liability (66 ) 51,620
Redeemable OP unitholder interests assumed 87,245
Equity issued 2,204,585
Equity issued for purchase of OP and Class C units 20,770

 
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
         
2016 Quarters 2015 Quarters
Second First Fourth Third Second
Cash flows from operating activities:
Net income $ 143,440 $ 149,034 $ 125,060 $ 23,117 $ 150,286
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amounts in discontinued operations) 221,961 236,387 236,793 240,210 249,207
Amortization of deferred revenue and lease intangibles, net (5,053 ) (5,037 ) (4,817 ) (5,682 ) (7,027 )
Other non-cash amortization 2,241 2,446 2,397 2,142 1,428
Stock-based compensation 5,008 5,029 3,476 4,869 4,885
Straight-lining of rental income, net (5,581 ) (9,845 ) (8,674 ) (8,357 ) (8,082 )
Loss (gain) on extinguishment of debt, net 2,468 314 (486 ) 15,331 (455 )
Gain on real estate dispositions (including amounts in discontinued operations) (5,739 ) (26,184 ) (4,162 ) (217 ) (7,746 )
Gain on real estate loan investments (33 )
Gain on sale of marketable debt securities (5,800 )
Income tax benefit (12,287 ) (9,156 ) (11,667 ) (12,477 ) (10,390 )
(Income) loss from unconsolidated entities (1,418 ) 198 47 955 (9 )
Loss on re-measurement of equity interest upon acquisition, net 176
Distributions from unconsolidated entities 1,884 1,989 2,912 5,577 14,324
Other (375 ) 1,099 3,241 170 847
Changes in operating assets and liabilities:
Decrease (increase) in other assets 15,444 (4,835 ) 31,152 20,875 (14,326 )
Increase (decrease) in accrued interest 13,542 (14,311 ) 13,657 (9,770 ) 316
Increase (decrease) in accounts payable and other liabilities 8,082   (54,237 ) (19,383 ) 27,578   6,097  
Net cash provided by operating activities 383,584 272,891 369,722 304,321 373,555
Cash flows from investing activities:
Net investment in real estate property (20,833 ) (13,620 ) (93,800 ) (1,303,078 ) (181,371 )
Investment in loans receivable and other (6,236 ) (146,214 ) (96,758 ) (18,727 ) (16,086 )
Proceeds from real estate disposals 9,350 54,211 82,775 136,442 106,850
Proceeds from loans receivable 6,019 1,625 2,267 13,634 1,219
Proceeds from sale or maturity of marketable securities 19,575 57,225
Development project expenditures (34,912 ) (34,767 ) (29,216 ) (27,828 ) (29,163 )
Capital expenditures (23,204 ) (23,721 ) (31,675 ) (32,383 ) (22,258 )
Investment in unconsolidated operating entity (26,282 )
Other   (4,265 ) (2,720 ) (19,171 ) (4,633 )
Net cash used in investing activities (69,816 ) (166,751 ) (169,127 ) (1,257,818 ) (88,217 )
Cash flows from financing activities:
Net change in borrowings under credit facility (113,136 ) 137,440 66,949 (469,072 ) 131,563
Net cash impact of CCP Spin-off (128,749 )
Proceeds from debt 416,072 145 1,686 1,403,090 15,138
Proceeds from debt related to CCP Spin-off 1,400,000
Repayment of debt (589,028 ) (151,309 ) (106,526 ) (1,050,628 ) (253,795 )
Purchase of noncontrolling interest (1,604 ) (3 ) (1,156 )
Payment of deferred financing costs (3,768 ) (76 ) (772 ) (9,285 ) (173 )
Issuance of common stock, net 228,108 149,631 73,205 65,651 66,840
Cash distribution to common stockholders (247,975 ) (245,496 ) (243,838 ) (243,171 ) (261,494 )
Cash distribution to redeemable OP unitholders (2,114 ) (2,323 ) (2,319 ) (8,079 ) (2,332 )
Purchases of redeemable OP units (32,619 )
Contributions from noncontrolling interest 5,680
Distributions to noncontrolling interest (1,839 ) (1,743 ) (1,399 ) (1,783 ) (7,645 )
Other 1,732   6,151   494   561   238  
Net cash (used in) provided by financing activities (307,872 ) (107,580 ) (212,520 ) 958,532   (345,435 )
Net increase (decrease) in cash and cash equivalents 5,896 (1,440 ) (11,925 ) 5,035 (60,097 )
Effect of foreign currency translation on cash and cash equivalents (275 ) 118 (283 ) (336 ) 404
Cash and cash equivalents at beginning of period 51,701   53,023   65,231   60,532   120,225  
Cash and cash equivalents at end of period $ 57,322   $ 51,701   $ 53,023   $ 65,231   $ 60,532  

 
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
         
2016 Quarters 2015 Quarters
Second First Fourth Third Second
Supplemental schedule of non-cash activities:
Assets and liabilities assumed from acquisitions:
Real estate investments $ 6,107 $ 2,558 $ (1,190 ) $ 3,649 $ 20,672
Utilization of funds held for an Internal Revenue Code Section 1031 exchange (6,954 ) (8,911 )
Other assets acquired 927 (66 ) (131 ) 3,716 (206 )
Other liabilities 80 2,558 (3,478 ) 8,149 4,052
Deferred income tax liability (66 ) 1,317 (784 ) 7,503
Noncontrolling interests 840
Non-cash impact of CCP Spin-Off 1,256,404
Equity issued for purchase of OP and Class C units 1,422 19,348

               
NON-GAAP FINANCIAL MEASURES RECONCILIATION

Funds From Operations (FFO) and Funds Available for Distribution (FAD) Including Comparable Earnings 1
(Dollars in thousands, except per share amounts)
 
Q2 YOY
2015   2016   Growth
Q2   Q3   Q4   YTD   Q1   Q2   YTD   '15-'16
Income from continuing operations $ 124,574 $ 45,235 $ 123,231 $ 389,539 $ 123,339 $ 137,849 $ 261,188 11 %
Income from continuing operations per share $ 0.37 $ 0.13 $ 0.37 $ 1.17 $ 0.36 $ 0.40 $ 0.77 8 %
Discontinued operations 18,243 (22,383 ) (2,331 ) 11,103 (489 ) (148 ) (637 )
Gain on real estate dispositions 7,469     265     4,160     18,580     26,184     5,739     31,923      
Net income 150,286 23,117 125,060 419,222 149,034 143,440 292,474
Net income attributable to noncontrolling interest 465     265     332     1,379     54     278     332      
Net income attributable to common stockholders 2 $ 149,821 $ 22,852 $ 124,728 $ 417,843 $ 148,980 $ 143,162 $ 292,142 (4 )%
Net income attributable to common stockholders per share 2 $ 0.45 $ 0.07 $ 0.37 $ 1.25 $ 0.44 $ 0.42 $ 0.86 (7 )%
 
Adjustments:
Depreciation and amortization on real estate assets 212,908 224,688 235,101 887,126 234,726 220,346 455,072
Depreciation on real estate assets related to noncontrolling interest (1,964 ) (1,964 ) (1,926 ) (7,906 ) (2,075 ) (1,814 ) (3,889 )
Depreciation on real estate assets related to unconsolidated entities 1,464 1,445 2,982 7,353 1,989 1,220 3,209
Loss on re-measurement of equity interest upon acquisition, net 176 176
Gain on real estate dispositions (7,469 ) (265 ) (4,160 ) (18,580 ) (26,184 ) (5,739 ) (31,923 )
Loss (gain) on real estate dispositions related to unconsolidated entities 19 19 (536 ) 41 (495 )
Discontinued operations:
(Gain) loss on real estate dispositions (277 ) 48 (2 ) (231 ) 1 1
Depreciation and amortization on real estate assets 34,496     13,878         79,608                  
Subtotal: FFO add-backs 239,158 237,830 232,190 947,565 207,920 214,055 421,975
Subtotal: FFO add-backs per share   $ 0.72     $ 0.71     $ 0.69     $ 2.84     $ 0.61     $ 0.62     $ 1.24      
FFO (NAREIT) attributable to common stockholders $ 388,979 $ 260,682 $ 356,918 $ 1,365,408 $ 356,900 $ 357,217 $ 714,117 (8 %)
FFO (NAREIT) attributable to common stockholders per share   $ 1.16     $ 0.78     $ 1.06     $ 4.09     $ 1.05     $ 1.04     $ 2.10     (10 %)
 
Adjustments:
Change in fair value of financial instruments 70 (18 ) 454 460 (79 ) (7 ) (86 )
Non-cash income tax benefit (10,389 ) (12,477 ) (11,668 ) (42,384 ) (9,157 ) (12,286 ) (21,443 )
(Gain) loss on extinguishment of debt, net (39 ) 16,301 (486 ) 15,797 314 2,468 2,782
Gain on non-real estate dispositions related to unconsolidated entities (585 ) (585 )
Merger-related expenses, deal costs and re-audit costs 15,135 100,548 659 152,344 3,254 8,550 11,804
Amortization of other intangibles 591     438     438     2,058     438     438     876      
Subtotal: normalized FFO add-backs 5,368 104,792 (10,603 ) 128,275 (5,230 ) (1,422 ) (6,652 )
Subtotal: normalized FFO add-backs per share   $ 0.02     $ 0.31     $ (0.03 )   $ 0.38     $ (0.02 )   $ 0.00     $ (0.02 )    
Normalized FFO attributable to common stockholders $ 394,347 $ 365,474 $ 346,315 $ 1,493,683 $ 351,670 $ 355,795 $ 707,465 (10 %)
Normalized FFO attributable to common stockholders per share $ 1.18 $ 1.09 $ 1.03 $ 4.47 $ 1.04 $ 1.04 $ 2.08 (12 %)
Adjusted: Normalized FFO from CCP spin-off $ (69,306 ) $ (35,393 ) $ $ (173,400 ) $
Adjusted Normalized FFO per share from CCP spin-off $ (0.21 ) $ (0.11 ) $ $ (0.52 ) $ $ $
Comparable Normalized FFO attributable to common stockholders $ 325,041 $ 330,081 $ 346,315 $ 1,320,283 $ 351,670 $ 355,795 $ 707,465 9 %
Comparable Normalized FFO attributable to common stockholders per share   $ 0.97     $ 0.98     $ 1.03     $ 3.95     $ 1.04     $ 1.04     $ 2.08     7 %
 
Non-cash items included in normalized FFO:
Amortization of deferred revenue and lease intangibles, net (7,027 ) (5,682 ) (4,817 ) (24,129 ) (5,037 ) (5,053 ) (10,090 )
Other non-cash amortization, including fair market value of debt 1,428 2,142 2,397 5,448 2,446 2,241 4,687
Stock-based compensation 4,885 4,869 3,476 19,537 5,029 5,008 10,037
Straight-lining of rental income, net (8,082 )   (8,357 )   (8,674 )   (33,792 )   (9,845 )   (5,581 )   (15,426 )    
Subtotal: non-cash items included in normalized FFO (8,796 ) (7,028 ) (7,618 ) (32,936 ) (7,407 ) (3,385 ) (10,792 )
Capital expenditures   (23,520 )   (33,536 )   (33,496 )   (112,700 )   (24,987 )   (25,103 )   (50,090 )    
Normalized FAD attributable to common stockholders $ 362,031 $ 324,910 $ 305,201 $ 1,348,047 $ 319,276 $ 327,307 $ 646,583 (10 %)

Adjusted: Normalized FAD from CCP spin-off
$ (64,080 ) $ (29,987 ) $ $ (155,081 ) $ $
Comparable Normalized FAD attributable to common stockholders   $ 297,951     $ 294,923     $ 305,201     $ 1,192,966     $ 319,276     $ 327,307     $ 646,583     10 %
Merger-related expenses, deal costs and re-audit costs   (15,135 )   (100,548 )   (659 )   (152,344 )   (3,254 )   (8,550 )   (11,804 )    
FAD attributable to common stockholders $ 346,896 $ 224,362 $ 304,542 $ 1,195,703 $ 316,022 $ 318,757 $ 634,779 (8 %)
Adjusted: FAD from CCP spin-off $ (61,760 ) $ 7,204 $ 2,333 $ (108,677 ) $ 489 $ 148 $ 637
Comparable FAD attributable to common stockholders   $ 285,136     $ 231,566     $ 306,875     $ 1,087,026     $ 316,511     $ 318,905     $ 635,416     12 %
Weighted average diluted shares 334,026 336,338 336,406 334,007 339,202 342,571 340,851
 
1 Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to material changes in the Company's weighted average diluted share count, if any.
 
2 CCP impacts calculated based on net income related to discontinued operations, less the de minimis share of discontinued operations net income not related to CCP assets, assuming (a) G&A of $2.5 million in Q1'15 and Q2'15 ($0.01 per share per quarter) and $1.3 million in Q3'15 ($0.00 per share) and (b) interest expense of $6.9 million in Q1'15 and Q2'15 ($0.02 per share per quarter) and $4.3 million in Q3'15 ($0.01 per share); these adjustments differ from the respective amounts found in discontinued operations.
 

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers FFO, normalized FFO, FAD and normalized FAD to be appropriate supplemental measures of operating performance of an equity REIT. In particular, the Company believes that normalized FFO is useful because it allows investors, analysts and Company management to compare the Company's operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation. In some cases, the Company provides information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and Company management to assess the impact of those items on the Company's financial results.

The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net income attributable to common stockholders (computed in accordance with GAAP) excluding gains (or losses) from sales of real estate property, including gain (or loss) on re-measurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company defines normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of the Company's debt; (c) the non-cash effect of income tax benefits or expenses and derivative transactions that have non-cash mark-to-market impacts on the Company's income statement; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions related to unconsolidated entities; and (g) expenses related to the re-audit and re-review in 2014 of the Company's historical financial statements and related matters. Normalized FAD represents normalized FFO excluding non-cash components, straight-line rental adjustments and deducting capital expenditures, including tenant allowances and leasing commissions. FAD represents normalized FAD after subtracting merger-related expenses, deal costs and re-audit costs.

FFO, normalized FFO, FAD and normalized FAD presented herein may not be identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO, normalized FFO, FAD and normalized FAD should not be considered as alternatives to net income or income from continuing operations (both determined in accordance with GAAP) as indicators of the Company's financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company's liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company's needs. The Company believes that income from continuing operations is the most comparable GAAP measure because it provides insight into the Company's continuing operations. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO, normalized FFO, FAD and normalized FAD should be examined in conjunction with net income and income from continuing operations as presented elsewhere herein.

       
NON-GAAP FINANCIAL MEASURES RECONCILIATION

EPS, FFO and FAD Guidance Attributable to Common Stockholders 1,2
(Dollars in millions, except per share amounts)
 
 
Tentative / Preliminary and Subject to Change
FY2016 - Guidance 2016 - Per Share
Low   High Low   High
                 
Income from Continuing Operations   $506     $552     $1.46     $1.59  
 
Adjustments 3 109 89 0.31 0.26
                 
Net Income Attributable to Common Stockholders   $615     $641     $1.77     $1.84  
 
Depreciation and Amortization Adjustments 906 885 2.60 2.55
Other Adjustments 3 (111 ) (91 ) (0.32 ) (0.26 )
                 
FFO (NAREIT) Attributable to Common Stockholders   $1,410     $1,435     $4.05     $4.13  
 
Merger-Related Expenses, Deal Costs and Re-Audit Costs 26 31 0.08 0.09
Other Adjustments 3 (27 ) (30 ) (0.08 ) (0.09 )
                 
Normalized FFO Attributable to Common Stockholders $1,409 $1,436 $4.05 $4.13
% Year-Over-Year Comparable Growth           3 %   5 %
 
Non-Cash Items Included in Normalized FFO (17 ) (21 )
Capital Expenditures (109 ) (119 )
                 
Normalized FAD Attributable to Common Stockholders   $1,283     $1,296          
 
Merger-Related Expense, Deal Costs and Re-Audit Costs (26 ) (31 )
Other Adjustments 3 0 0
                 
FAD Attributable to Common Stockholders   $1,257     $1,265          
 
Weighted Average Diluted Shares 347,705 347,705

1
  The Company's guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company's expectations depending on factors discussed in the Company's filings with the Securities and Exchange Commission.

2
Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to changes in the Company's weighted average diluted share count, if any.

3
See page 12 for detailed breakout of "adjustments" for each respective category.

 

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Net Debt to Adjusted Pro Forma EBITDA
 
The following information considers the pro forma effect on net income attributable to common stockholders of the Company's investments and other capital transactions that were completed during the three months ended June 30, 2016, as if the transactions had been consummated as of the beginning of the period. The following table illustrates net debt to pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding gains or losses on extinguishment of debt, income or loss from noncontrolling interest and unconsolidated entities (excluding cash distributions), merger-related expenses and deal costs, expenses related to the re-audit and re-review in 2014 of the Company's historical financial statements, net gains on real estate activity, gains or losses on re-measurement of equity interest upon acquisition and changes in the fair value of financial instruments (including amounts in discontinued operations) ("Adjusted Pro Forma EBITDA") (dollars in thousands). The Company believes that Adjusted Pro Forma EBITDA and net debt to Adjusted Pro Forma EBITDA are important supplemental measures in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Adjusted Pro Forma EBITDA and net debt to Adjusted Pro Forma EBITDA are useful to investors, analysts and Company management because they allow the comparison of the Company's credit strength between periods and to other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual credit quality.
 
Income from continuing operations $ 137,849
Discontinued operations (148 )
Gain on real estate dispositions 5,739  
Net income 143,440
Net income attributable to noncontrolling interest 278  
Net income attributable to common stockholders 143,162
Pro forma adjustments for current period investments, capital transactions and dispositions 2,701  
Pro forma net income attributable to common stockholders for the three months ended June 30, 2016 145,863
Add back:
Pro forma interest 104,152
Pro forma depreciation and amortization 222,079
Stock-based compensation 5,008
Gain on real estate dispositions (5,738 )
Loss on extinguishment of debt, net 2,468
Income from unconsolidated entities (1,418 )
Pro forma noncontrolling interest 278
Income tax benefit (11,549 )
Change in fair value of financial instruments (16 )
Other taxes 947
Pro forma merger-related expenses, deal costs and re-audit costs 7,024  
Adjusted Pro Forma EBITDA 469,098  
Adjusted Pro Forma EBITDA annualized $ 1,876,392  
 
As of June 30, 2016:
Debt $ 10,901,131
Debt on held for sale assets 76,980
Cash (57,322 )
Net debt $ 10,920,789  
 
Net debt to Adjusted Pro Forma EBITDA 5.8   x

 

NON-GAAP FINANCIAL MEASURES RECONCILIATION

NOI and Same-Store Cash NOI
 
The Company considers NOI and same-store cash NOI to be important supplemental measures to net income because they allows investors, analysts and Company management to assess the Company's unlevered property-level operating results and to compare the Company's operating results with the operating results of other real estate companies and between periods on a consistent basis. The Company defines NOI as total revenues, less interest and other income, property-level operating expenses and medical office building services costs (including amounts in discontinued operations). Cash receipts may differ due to straight-line recognition of certain rental income and the application of other GAAP policies. The Company defines same-store cash NOI as the NOI for properties owned, consolidated and operational for the full period in both comparison periods excluding the impact of non-cash items such as straight-line rent and the impact of exchange rate movements across the comparison periods. In certain cases, results for same-store cash NOI may be adjusted to reflect non-recurring items and the receipt of cash payments and fees not fully recognized as NOI in the period. Same-store cash NOI excludes assets intended for disposition and, for the SHOP portfolio, those properties that transitioned operators after the start of the prior comparison period.
 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
Total Portfolio Same-Store Cash NOI
 
For the Three Months Ended Percentage
June 30, Increase
2016   2015
 
Total Revenues, Excluding Interest and Other Income $ 848,293 $ 811,746
Less:
Total Property-Level Operating Expenses (351,955 ) (342,662 )
Medical Office Building Services Costs (1,852 ) (5,764 )
Net Operating Income 494,486 463,320
 
Adjustments:
Second Quarter Modification Fee 3,500
NOI Not Included in Same-Store (40,064 ) (15,896 )
Straight-Lining of Rental Income (5,669 ) (8,062 )
Non-Cash Rental Income (4,383 ) (3,881 )
Non-Segment NOI (25,049 ) (25,735 )
Constant Currency Adjustment   (1,055 )
(71,665 ) (54,629 )
 
Cash NOI as Reported $ 422,821   $ 408,691   3.5 %

 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
Triple-Net Portfolio Same-Store Cash NOI
 
For the Three Months Ended Percentage
June 30, Increase
2016   2015
 
Total Revenues, Excluding Interest and Other Income $ 211,350 $ 183,145
Less:
Total Property-Level Operating Expenses
Medical Office Building Services Costs    
Net Operating Income 211,350 183,145
 
Adjustments:
Second Quarter Modification Fee 3,500
NOI Not Included in Same-Store (31,854 ) (8,795 )
Straight-Lining of Rental Income (2,833 ) (4,655 )
Non-Cash Rental Income (5,200 ) (4,659 )
Constant Currency Adjustment   (285 )
(36,387 ) (18,394 )
 
Cash NOI as Reported $ 174,963   $ 164,751   6.2 %
 
 
Adjustment:
Second Quarter Modification Fee (3,500 )  
(3,500 )  
 
Cash NOI as Adjusted $ 171,463   $ 164,751   4.1 %
 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
 
Senior Housing Operating Portfolio Same-Store Cash NOI
 
For the Three Months Ended Percentage
June 30, Increase
2016   2015
 
Total Revenues, Excluding Interest and Other Income $ 464,437 $ 454,645
Less:
Total Property-Level Operating Expenses (307,989 ) (299,252 )
Medical Office Building Services Costs    
Net Operating Income 156,448 155,393
 
Adjustments:
NOI Not Included in Same-Store (940 ) (2,276 )
Constant Currency Adjustment   (771 )
(940 ) (3,047 )
 
Cash NOI as Reported $ 155,508   $ 152,346   2.1 %

 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
 
MOB Portfolio Same-Store Cash NOI
 
For the Three Months Ended Percentage
June 30, Increase
2016   2015
 
Total Revenues, Excluding Interest and Other Income $ 147,456 $ 148,221
Less:
Total Property-Level Operating Expenses (43,966 ) (43,410 )
Medical Office Building Services Costs (1,852 ) (5,764 )
Net Operating Income 101,638 99,047
 
Adjustments:
NOI Not Included in Same-Store (7,271 ) (4,825 )
Straight-Lining of Rental Income (2,836 ) (3,407 )
Non-Cash Rental Income 817   779  
(9,290 ) (7,453 )
 
Cash NOI as Reported $ 92,348   $ 91,594   0.8 %

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