Upcoming AWS Coverage on Welltower Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 21, 2017 / Active Wall St. announces its post-earnings coverage on HCP, Inc. (NYSE: HCP). The Company disclosed its fourth quarter and fiscal 2016 financial results on February 13, 2017. The health care real estate investment trust surpassed markets FFO estimates. Register with us now for your free membership at:

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One of HCP, Inc.'s competitors within the REIT - Healthcare Facilities space, Welltower Inc. (NYSE: HCN), announced on January 23, 2017, that it will release its Q4 2016 financial results before the market opens on February 22, 2017. The Company will also host a conference call on February 22, 2017, at 10:00 a.m. ET to discuss these results. AWS will be initiating a research report on Welltower in the coming days following release of its results.

Today, AWS is promoting its earnings coverage on HCP; touching on HCN. Get our free coverage by signing up to:

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Earnings Reviewed

For the period ended December 31, 2016, HCP reported total revenues of $539.95 million compared to total revenue of $520.32 million in Q4 2015. For FY16, HCP generated total revenues of $2.13 billion compared to total revenue of $1.94 billion in FY15.

For Q4 2016, HCP posted diluted funds from operations (FFO) of $0.59 per share compared to diluted FFO of $0.80 per share for Q4 2015. The Company's FFO numbers were $0.02 better than analysts' estimates. HCP's FFO for FY16 came in at $2.74, which was toward the high-end of the $2.69 to $2.75 range the Company announced earlier.

Brookdale Asset Sales and Transitions

On November 01, 2016, HCP entered into definitive agreements to sell a portfolio of 64 properties leased to Brookdale Senior Living, Inc. for an aggregate sales price of $1.125 billion to affiliates of Blackstone Real Estate Partners VIII L.P.

During Q4 2016, HCP transitioned seven of the eight previously announced expiring Brookdale triple-net leases to RIDEA structures. In January 2017, the Company completed the previously announced sale of a 40% interest in its RIDEA II senior housing joint venture and the related financing of the venture, generating $480 million of proceeds which were used to pay down the Company's revolving credit facility.

HCP noted that the Brookdale transaction is scheduled to close in Q1 2017. In addition, the Company continues to market an additional 25 community's triple-net leased to Brookdale and expect to sell or transition these assets during FY17.

Dispositions and Transitions

During Q4 2016, HCP completed $472 million of dispositions, bringing its year-to-date total dispositions to $770 million. In November 2016, the Company sold four life science facilities in South San Francisco, California, encompassing 457,000 sq. ft. for $311 million to the current tenant. In October 2016, HCP sold seven of ten properties subject to a master lease to the current operator for an aggregate purchase price of $88 million. Concurrently, the Company modified the in-place master lease to transition the operations of the remaining three properties to a new regional operator.

Transitions

In October 2016, HCP transitioned four triple-net leased assets to RIDEA structures, three managed by Elmcroft Senior Living and one managed by Frontier Management.

Investment Transactions

During Q4 2016, HCP completed $345 million of acquisitions and loan funding, bringing its year-to-date total acquisitions and loan funding to $723 million. In November 2016, the Company entered into agreements with Maria Mallaband Care Group to acquire a portfolio of predominantly private pay prime care homes located in London/South-East England for $131 million (£105 million). HCP stated that in mid-2017, through the exercise of a call option, the Company intends to convert its bridge loan provided to Maria Mallaband in November into fee ownership and enter into a Master Lease with Maria Mallaband.

In December 2016, HCP acquired a 10-asset portfolio of MOBs, including nine on-campus, leased to affiliates of Community Health Systems for an aggregate purchase price of $163 million.

Balance Sheet and Financing Activities

During Q4 2016, HCP repaid $1.7 billion of debt. Furthermore, the Company repaid an additional $440 million through February 13, 2017, using proceeds generated from QCP financing, RIDEA II transaction, and other dispositions. The Company stated that it remains on track with its previously disclosed deleveraging plan and continue to target net debt to EBITDA in the low to mid six-time range and a target financial leverage in the 43% to 44% range by the end of 2017.

In November 2016, HCP repaid $500 million of 6.0% senior notes scheduled to mature in January 2017 and $600 million of 6.7% senior notes scheduled to mature in January 2018. In addition, during Q4 2016, the Company paid down $454 million on its revolving credit facility and $135 million of mortgage debt. As of February 13, 2017, HCP had $1.6 billion of liquidity from a combination of cash and availability under our credit facility.

Life Science and Medical office leasing

During Q4 2016, HCP completed 1.1 million sq. ft. of leasing in its life science and medical office portfolios, consisting of 450,000 sq. ft. of new leases and 668,000 sq. ft. of renewals.

HCP commenced the $211 million development of Phase III, which adds two Class A buildings representing up to 336,000 sq. ft., and expect it to be delivered by Q4 2018.

Dividend

On February 02, 2017, HCP's Board of Directors declared a quarterly cash dividend of $0.37 per common share. The dividend will be paid on March 02, 2017 to stockholders of record as of the close of business on February 15, 2017.

Leadership Announcement

HCP's Board of Directors elected Tom Herzog as CEO and to serve as a member of the Board and also elected Justin Hutchens as President. Both elections were effective January 01, 2017.

Peter Scott joined the company as Executive Vice President and Chief Financial Officer, effective February 13, 2017.

2017 GUIDANCE

For FY17, HCP is forecasting guidance for EPS of $1.32 ? $1.38, FFO per share of $1.88 ? $1.94, and FFO as adjusted per share of $1.89 ? $1.95, in-line with preliminary outlook provided on November 01, 2016. The Company is forecasting FY17 guidance for SPP Cash NOI growth of 2.5% ? 3.5%.

Stock Performance

At the closing bell, on Friday, February 17, 2017, HCP Inc.'s stock was slightly up by 0.29%, ending the trading session at $31.07. A total volume of 2.22 million shares were traded at the end of the day. In the last month and previous twelve months, shares of the Company have advanced 4.97% and 27.00%, respectively. Moreover, the stock gained 5.82% since the start of the year. The stock currently has a market cap of $14.54 billion and has a dividend yield of 4.76%.

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SOURCE: Active Wall Street