Table of ContentsContent

s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.1934
For the quarterly period ended September 30, 2017.March 31, 2023
OR
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 001-08895
HCP, INC.Healthpeak Properties, Inc.
(Exact name of registrant as specified in its charter)
Maryland33-0091377
Maryland33-0091377
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
1920 Main4600 South Syracuse Street, Suite 1200500
Irvine, CA 92614Denver, CO 80237
(Address of principal executive offices) (Zip Code)
(949) 407-0700(720) 428-5050
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par valuePEAKNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES Yes ☒ NO No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES Yes ☒ NO No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated Filer ☒filerAccelerated Filer ☐
Non-accelerated Filer ☐filer☐Smaller Reporting Company reporting company☐
(Do not check if a smaller reporting company)
Emerging growth companyEmerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  YES .  Yes ☐ NO  No ☒
At October 27, 2017,As ofApril 26, 2023, there were 469,108,449 546,995,686shares of the registrant’s $1.00 par value common stock outstanding.


HCP,
Table of Contents
EXPLANATORY NOTE
On February 7, 2023, Healthpeak Properties, Inc. announced its intent to implement a corporate reorganization into a new holding company structure commonly referred to as an umbrella partnership real estate investment trust (“UPREIT” and, such reorganization, the “Reorganization”). Through February 9, 2023, the business of the registrant was conducted by an entity known as Healthpeak Properties, Inc., a Maryland corporation (“Old Healthpeak”). As part of the Reorganization, Old Healthpeak formed New Healthpeak, Inc., a Maryland corporation (“New Healthpeak”), as a wholly owned subsidiary, and New Healthpeak formed Healthpeak Merger Sub, Inc., a Maryland corporation (“Merger Sub”), as a wholly owned subsidiary. On February 10, 2023, Merger Sub merged with and into Old Healthpeak, with Old Healthpeak continuing as the surviving corporation and a wholly owned subsidiary of New Healthpeak (the “Merger”). As a result, New Healthpeak became the publicly traded parent company of Old Healthpeak and Old Healthpeak’s subsidiaries, and New Healthpeak changed its name to Healthpeak Properties, Inc. In connection with the Reorganization and immediately following the Merger, Old Healthpeak converted from a Maryland corporation to a Maryland limited liability company named Healthpeak OP, LLC (“Healthpeak OP”). At the effective time of the Merger, each outstanding share of Old Healthpeak common stock was converted into one equivalent share of New Healthpeak common stock. Following the Reorganization, New Healthpeak’s business is conducted through Healthpeak OP and New Healthpeak does not have substantial assets or liabilities, other than through its investment in Healthpeak OP.
As a result of the Merger, New Healthpeak became the successor issuer to Old Healthpeak pursuant to Rule 12g-3(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a result, shares of New Healthpeak common stock were deemed registered under Section 12(b) of the Exchange Act. This Quarterly Report on Form 10-Q pertains to the business and results of operations of Old Healthpeak through February 9, 2023 and of New Healthpeak from and including February 10, 2023, for the quarter ended March 31, 2023, and all data, discussions or references to other periods prior to the effectiveness of the Merger pertain to Old Healthpeak. For additional information on our UPREIT Reorganization, please see our Current Report on Form 8-K12B filed with the Securities and Exchange Commission on February 10, 2023.
Throughout this Quarterly Report on Form 10-Q, unless the context requires otherwise, “Healthpeak,” the “Company,” “we,” “us” and “our” refer to Old Healthpeak through February 9, 2023 and to New Healthpeak from and including February 10, 2023.
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HEALTHPEAK PROPERTIES, INC.
INDEX
PART I. FINANCIAL INFORMATION
PART I. FINANCIAL INFORMATION
4
34
45
56
67
78
89
3532
5951
6052
PART II. OTHER INFORMATION 
Legal Proceedings
61
Item 1A. 
6153
6153
6154
6255
57



3
HCP,
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.  Financial Statements (Unaudited)
Healthpeak Properties, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
 September 30,
2017		 December 31,
2016
ASSETS 
  
Real Estate: 
  
Buildings and improvements$11,052,578
 $11,692,654
Development costs and construction in progress429,459
 400,619
Land1,752,890
 1,881,487
Accumulated depreciation and amortization(2,699,174) (2,648,930)
Net real estate10,535,753
 11,325,830
Net investment in direct financing leases715,104
 752,589
Loans receivable, net402,152
 807,954
Investments in and advances to unconsolidated joint ventures822,369
 571,491
Accounts receivable, net of allowance of $4,312 and $4,459, respectively34,571
 45,116
Cash and cash equivalents133,887
 94,730
Restricted cash27,135
 42,260
Intangible assets, net400,867
 479,805
Assets held for sale, net216,074
 927,866
Other assets, net616,169
 711,624
Total assets$13,904,081
 $15,759,265
LIABILITIES AND EQUITY 
  
Bank line of credit$605,837
 $899,718
Term loans226,205
 440,062
Senior unsecured notes6,393,926
 7,133,538
Mortgage debt145,417
 623,792
Other debt94,818
 92,385
Intangible liabilities, net53,427
 58,145
Liabilities of assets held for sale, net8,653
 3,776
Accounts payable and accrued liabilities381,189
 417,360
Deferred revenue140,378
 149,181
Total liabilities8,049,850
 9,817,957
Commitments and contingencies

 

Common stock, $1.00 par value: 750,000,000 shares authorized; 469,034,877 and 468,081,489 shares issued and outstanding, respectively469,035
 468,081
Additional paid-in capital8,224,531
 8,198,890
Cumulative dividends in excess of earnings(3,137,642) (3,089,734)
Accumulated other comprehensive income (loss)(24,491) (29,642)
Total stockholders' equity5,531,433
 5,547,595
Joint venture partners145,496
 214,377
Non-managing member unitholders177,302
 179,336
Total noncontrolling interests322,798
 393,713
Total equity5,854,231
 5,941,308
Total liabilities and equity$13,904,081
 $15,759,265

See accompanying Notes to the Unaudited Consolidated Financial Statements.


HCP, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues: 
  
    
Rental and related revenues$266,109
 $290,280
 $816,147
 $872,828
Tenant recoveries36,860
 34,809
 105,794
 99,715
Resident fees and services126,040
 170,752
 391,688
 500,717
Income from direct financing leases13,240
 14,234
 40,516
 44,791
Interest income11,774
 20,482
 50,974
 71,298
Total revenues454,023
 530,557
 1,405,119
 1,589,349
Costs and expenses: 
  
    
Interest expense71,328
 117,860
 235,834
 361,255
Depreciation and amortization130,588
 141,407
 397,893
 421,181
Operating155,338
 187,714
 467,582
 542,751
General and administrative23,523
 34,781
 67,287
 83,011
Acquisition and pursuit costs580
 2,763
 2,504
 6,061
Impairments (recoveries), net25,328
 —
 82,010
 —
Total costs and expenses406,685
 484,525
 1,253,110
 1,414,259
Other income (expense): 
  
    
Gain (loss) on sales of real estate, net5,182
 (9) 322,852
 119,605
Loss on debt extinguishments(54,227) —
 (54,227) —
Other income (expense), net(10,556) 1,432
 40,723
 5,064
Total other income (expense), net(59,601) 1,423
 309,348
 124,669
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures(12,263) 47,455
 461,357
 299,759
Income tax benefit (expense)5,481
 424
 14,630
 (1,101)
Equity income (loss) from unconsolidated joint ventures1,062
 (2,053) 4,571
 (4,028)
Income (loss) from continuing operations(5,720) 45,826
 480,558
 294,630
Discontinued operations: 
  
    
Income (loss) before transaction costs and income taxes—
 121,229
 —
 360,226
Transaction costs—
 (14,805) —
 (28,509)
Income tax benefit (expense)—
 1,789
 —
 (47,721)
Total discontinued operations—
 108,213
 —
 283,996
Net income (loss)(5,720) 154,039
 480,558
 578,626
Noncontrolling interests' share in earnings(1,937) (2,789) (7,687) (9,540)
Net income (loss) attributable to HCP, Inc.(7,657) 151,250
 472,871
 569,086
Participating securities' share in earnings(131) (326) (560) (977)
Net income (loss) applicable to common shares$(7,788) $150,924
 $472,311
 $568,109
Basic earnings per common share:       
Continuing operations$(0.02) $0.09
 $1.01
 $0.61
Discontinued operations—
 0.23
 —
 0.61
Net income (loss) applicable to common shares$(0.02) $0.32
 $1.01
 $1.22
Diluted earnings per common share:       
Continuing operations$(0.02) $0.09
 $1.01
 $0.61
Discontinued operations—
 0.23
 —
 0.61
Net income (loss) applicable to common shares$(0.02) $0.32
 $1.01
 $1.22
Weighted average shares used to calculate earnings per common share:       
Basic468,975
 467,628
 468,642
 466,931
Diluted468,975
 467,835
 468,828
 467,132
Dividends declared per common share$0.370
 $0.575
 $1.110
 $1.725
 March 31,
2023		December 31,
2022
ASSETS  
Real estate:  
Buildings and improvements$12,889,290 $12,784,078 
Development costs and construction in progress819,810 760,355 
Land2,674,942 2,667,188 
Accumulated depreciation and amortization(3,296,781)(3,188,138)
Net real estate13,087,261 13,023,483 
Loans receivable, net of reserves of $6,152 and $8,280
243,149 374,832 
Investments in and advances to unconsolidated joint ventures714,679 706,677 
Accounts receivable, net of allowance of $2,413 and $2,39957,705 53,436 
Cash and cash equivalents59,235 72,032 
Restricted cash57,990 54,802 
Intangible assets, net391,956 418,061 
Assets held for sale, net— 49,866 
Right-of-use asset, net235,591 237,318 
Other assets, net754,723 780,722 
Total assets$15,602,289 $15,771,229 
LIABILITIES AND EQUITY  
Bank line of credit and commercial paper$556,000 $995,606 
Term loans496,168 495,957 
Senior unsecured notes5,056,543 4,659,451 
Mortgage debt345,167 346,599 
Intangible liabilities, net149,604 156,193 
Liabilities related to assets held for sale, net— 4,070 
Lease liability207,734 208,515 
Accounts payable, accrued liabilities, and other liabilities688,994 772,485 
Deferred revenue878,444 844,076 
Total liabilities8,378,654 8,482,952 
Commitments and contingencies (Note 10)
Redeemable noncontrolling interests85,902 105,679 
Common stock, $1.00 par value: 750,000,000 shares authorized; 546,994,803 and 546,641,973 shares issued and outstanding546,995 546,642 
Additional paid-in capital10,360,058 10,349,614 
Cumulative dividends in excess of earnings(4,316,038)(4,269,689)
Accumulated other comprehensive income (loss)18,721 28,134 
Total stockholders’ equity6,609,736 6,654,701 
Joint venture partners320,363 327,721 
Non-managing member unitholders207,634 200,176 
Total noncontrolling interests527,997 527,897 
Total equity7,137,733 7,182,598 
Total liabilities and equity$15,602,289 $15,771,229 
See accompanying Notes to the Unaudited Consolidated Financial Statements.



4
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Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 Three Months Ended
March 31,
 20232022
Revenues:  
Rental and related revenues$392,431 $370,150 
Resident fees and services127,084 121,560 
Interest income6,163 5,494 
Income from direct financing leases— 1,168 
Total revenues525,678 498,372 
Costs and expenses:  
Interest expense47,963 37,586 
Depreciation and amortization179,225 177,733 
Operating223,088 207,247 
General and administrative24,547 23,831 
Transaction costs2,425 296 
Impairments and loan loss reserves (recoveries), net(2,213)132 
Total costs and expenses475,035 446,825 
Other income (expense):  
Gain (loss) on sales of real estate, net81,578 3,856 
Other income (expense), net772 18,316 
Total other income (expense), net82,350 22,172 
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures132,993 73,719 
Income tax benefit (expense)(302)(777)
Equity income (loss) from unconsolidated joint ventures1,816 2,084 
Income (loss) from continuing operations134,507 75,026 
Income (loss) from discontinued operations— 317 
Net income (loss)134,507 75,343 
Noncontrolling interests’ share in continuing operations(15,555)(3,730)
Net income (loss) attributable to Healthpeak Properties, Inc.118,952 71,613 
Participating securities’ share in earnings(1,254)(1,976)
Net income (loss) applicable to common shares$117,698 $69,637 
Basic earnings (loss) per common share:
Continuing operations$0.22 $0.13 
Discontinued operations— 0.00 
Net income (loss) applicable to common shares$0.22 $0.13 
Diluted earnings (loss) per common share:
Continuing operations$0.22 $0.13 
Discontinued operations— 0.00 
Net income (loss) applicable to common shares$0.22 $0.13 
Weighted average shares outstanding:
Basic546,842 539,352 
Diluted547,110 539,586 
See accompanying Notes to the Unaudited Consolidated Financial Statements.
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Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income (loss)$(5,720) $154,039
 $480,558
 $578,626
        
Other comprehensive income (loss):       
Change in net unrealized gains (losses) on securities(8) 4
 (2) (1)
Change in net unrealized gains (losses) on cash flow hedges:       
Unrealized gains (losses)(3,672) 1,184
 (10,105) 1,532
Reclassification adjustment realized in net income (loss)654
 154
 674
 494
Change in Supplemental Executive Retirement Plan obligation74
 70
 222
 211
Foreign currency translation adjustment5,750
 (838) 14,362
 (1,930)
Total other comprehensive income (loss)2,798
 574
 5,151
 306
Total comprehensive income (loss)(2,922) 154,613
 485,709
 578,932
Total comprehensive income (loss) attributable to noncontrolling interests(1,937) (2,789) (7,687) (9,540)
Total comprehensive income (loss) attributable to HCP, Inc.$(4,859) $151,824
 $478,022
 $569,392
 Three Months Ended
March 31,
 20232022
Net income (loss)$134,507 $75,343 
Other comprehensive income (loss):
Net unrealized gains (losses) on derivatives(9,477)— 
Change in Supplemental Executive Retirement Plan obligation and other64 100 
Total other comprehensive income (loss)(9,413)100 
Total comprehensive income (loss)125,094 75,443 
Total comprehensive (income) loss attributable to noncontrolling interests’ share in continuing operations(15,555)(3,730)
Total comprehensive income (loss) attributable to Healthpeak Properties, Inc.$109,539 $71,713 
See accompanying Notes to the Unaudited Consolidated Financial Statements.

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HCP,Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
(In thousands, except per share data)
(Unaudited)
For the three months ended March 31, 2023:
 Common Stock Additional Paid-In Capital Cumulative Dividends In Excess Of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Total Noncontrolling Interests 
Total
Equity
 Shares Amount      
January 1, 2017468,081
 $468,081
 $8,198,890
 $(3,089,734) $(29,642) $5,547,595
 $393,713
 $5,941,308
Net income (loss)—
 —
 —
 472,871
 —
 472,871
 7,687
 480,558
Other comprehensive income (loss)—
 —
 —
 —
 5,151
 5,151
 —
 5,151
Issuance of common stock, net998
 998
 16,352
 —
 —
 17,350
 —
 17,350
Conversion of DownREIT units to common stock68
 68
 2,003
 —
 —
 2,071
 (2,071) —
Repurchase of common stock(144) (144) (4,315) —
 —
 (4,459) —
 (4,459)
Exercise of stock options32
 32
 736
 —
 —
 768
 —
 768
Amortization of deferred compensation—
 —
 10,865
 —
 —
 10,865
 —
 10,865
Common dividends ($1.110 per share)—
 —
 —
 (520,779) —
 (520,779) —
 (520,779)
Distributions to noncontrolling interests—
 —
 —
 —
 —
 —
 (19,520) (19,520)
Issuances of noncontrolling interests—
 —
 —
 —
 —
 —
 1,050
 1,050
Deconsolidation of noncontrolling interests—
 —
 —
 —
 —
 —
 (58,061) (58,061)
September 30, 2017469,035
 $469,035
 $8,224,531
 $(3,137,642) $(24,491) $5,531,433
 $322,798
 $5,854,231
 Common StockAdditional Paid-In CapitalCumulative Dividends In Excess Of EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ EquityTotal Noncontrolling InterestsTotal
Equity		Redeemable Noncontrolling Interests
 SharesAmount
January 1, 2023546,642 $546,642 $10,349,614 $(4,269,689)$28,134 $6,654,701 $527,897 $7,182,598 $105,679 
Net income (loss)— — — 118,952 — 118,952 15,389 134,341 166 
Other comprehensive income (loss)— — — — (9,413)(9,413)— (9,413)— 
Issuance of common stock, net591 591 (417)— — 174 — 174 — 
Repurchase of common stock(238)(238)(6,229)— — (6,467)— (6,467)— 
Stock-based compensation— — (2,877)— — (2,877)7,442 4,565 — 
Common dividends ($0.30 per share)— — — (165,301)— (165,301)— (165,301)— 
Distributions to noncontrolling interests— — — — — — (22,731)(22,731)(72)
Contributions from noncontrolling interests— — — — — — — — 96 
Adjustments to redemption value of redeemable noncontrolling interests— — 19,967 — — 19,967 — 19,967 (19,967)
March 31, 2023546,995 $546,995 $10,360,058 $(4,316,038)$18,721 $6,609,736 $527,997 $7,137,733 $85,902 
For the three months ended March 31, 2022:
 Common Stock Additional Paid-In Capital Cumulative Dividends In Excess Of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Total Noncontrolling Interests Total
Equity
 Shares Amount      
January 1, 2016465,488
 $465,488
 $11,647,039
 $(2,738,414) $(30,470) $9,343,643
 $402,674
 $9,746,317
Net income (loss)—
 —
 —
 569,086
 —
 569,086
 9,540
 578,626
Other comprehensive income (loss)—
 —
 —
 —
 306
 306
 —
 306
Issuance of common stock, net2,290
 2,290
 53,421
 —
 —
 55,711
 —
 55,711
Conversion of DownREIT units to common stock145
 145
 5,948
 —
 —
 6,093
 (6,093) —
Repurchase of common stock(236) (236) (8,431) —
 —
 (8,667) —
 (8,667)
Exercise of stock options133
 133
 3,340
 —
 —
 3,473
 —
 3,473
Amortization of deferred compensation—
 —
 19,307
 —
 —
 19,307
 —
 19,307
Common dividends ($1.725 per share)—
 —
 —
 (806,243) —
 (806,243) —
 (806,243)
Distributions to noncontrolling interests—
 —
 (36) —
 —
 (36) (18,651) (18,687)
Issuances of noncontrolling interests—
 —
 —
 —
 —
 —
 4,785
 4,785
Deconsolidation of noncontrolling interests—
 —
 (36) 475
 —
 439
 67
 506
September 30, 2016467,820
 $467,820
 $11,720,552
 $(2,975,096) $(30,164) $9,183,112
 $392,322
 $9,575,434
 Common StockAdditional Paid-In CapitalCumulative Dividends In Excess Of EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ EquityTotal Noncontrolling InterestsTotal
Equity		Redeemable Noncontrolling Interests
 SharesAmount
January 1, 2022539,097 $539,097 $10,100,294 $(4,120,774)$(3,147)$6,515,470 $543,290 $7,058,760 $87,344 
Net income (loss)— — — 71,613 — 71,613 3,718 75,331 12 
Other comprehensive income (loss)— — — — 100 100 — 100 — 
Issuance of common stock, net766 766 (437)— — 329 — 329 — 
Repurchase of common stock(339)(339)(11,013)— — (11,352)— (11,352)— 
Stock-based compensation— — 6,144 — — 6,144 — 6,144 — 
Common dividends ($0.30 per share)— — — (163,780)— (163,780)— (163,780)— 
Distributions to noncontrolling interests— — — — — — (7,509)(7,509)— 
Contributions from noncontrolling interests— — — — — — — — 233 
Adjustments to redemption value of redeemable noncontrolling interests— — (10,301)— — (10,301)— (10,301)10,301 
March 31, 2022539,524 $539,524 $10,084,687 $(4,212,941)$(3,047)$6,408,223 $539,499 $6,947,722 $97,890 
See accompanying Notes to the Unaudited Consolidated Financial Statements.

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HCP,Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 2017 2016
Cash flows from operating activities:   
Net income (loss)$480,558
 $578,626
Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
Depreciation and amortization of real estate, in-place lease and other intangibles:   
Continuing operations397,893
 421,181
Discontinued operations—
 4,401
Amortization of deferred compensation10,865
 19,307
Amortization of deferred financing costs11,141
 15,598
Straight-line rents(12,236) (14,412)
Equity loss (income) from unconsolidated joint ventures(4,571) 4,028
Distributions of earnings from unconsolidated joint ventures27,692
 5,919
Loss (gain) on sales of real estate, net(322,852) (119,605)
Allowance for loan losses59,420
 —
Deferred income tax expense (benefit)(17,786) 47,195
Impairments (recoveries), net22,590
 —
Loss on extinguishment of debt54,227
 —
Casualty-related loss (recoveries), net9,912
 —
Foreign exchange and other losses (gains), net(986) (127)
Gain (loss) on sale of marketable securities(50,895) —
Other non-cash items(543) (2,035)
Changes in:   
Accounts receivable, net396
 7,558
Other assets, net(2,617) (9,674)
Accounts payable and accrued liabilities(24,312) 40,672
Net cash provided by (used in) operating activities637,896
 998,632
Cash flows from investing activities:   
Acquisitions of real estate(135,816) (257,242)
Development and redevelopment of real estate(261,510) (304,818)
Leasing costs, tenant improvements, and recurring capital expenditures(75,211) (64,501)
Proceeds from sales of real estate, net1,249,993
 211,810
Contributions to unconsolidated joint ventures(25,776) (10,169)
Distributions in excess of earnings from unconsolidated joint ventures4,845
 14,458
Net proceeds from the RIDEA II transaction480,614
 —
Proceeds from the sales of Four Seasons investments135,538
 —
Principal repayments on direct financing leases, loans receivable and other414,732
 221,179
Investments in loans receivable, direct financing leases and other(28,339) (129,335)
Decrease (increase) in restricted cash(3,247) 4,459
Net cash provided by (used in) investing activities1,755,823
 (314,159)
Cash flows from financing activities:   
Net borrowings (repayments) under bank line of credit23,419
 1,157,897
Repayments under bank line of credit(339,826) (135,000)
Repayment of term loans(234,459) —
Repayments of senior unsecured notes(750,000) (900,000)
Issuance of mortgage and other debt5,395
 —
Repayments of mortgage and other debt(482,487) (249,540)
Debt extinguishment costs(51,415) —
Deferred financing costs—
 (1,057)
Issuance of common stock and exercise of options18,118
 59,184
Repurchase of common stock(4,459) (8,667)
Dividends paid on common stock(520,779) (806,243)
Issuance of noncontrolling interests1,050
 4,785
Distributions to noncontrolling interests(19,520) (18,687)
Net cash provided by (used in) financing activities(2,354,963) (897,328)
Effect of foreign exchange on cash and cash equivalents401
 (754)
Net increase (decrease) in cash and cash equivalents39,157
 (213,609)
Cash and cash equivalents, beginning of period94,730
 346,500
Cash and cash equivalents, end of period$133,887
 $132,891
 Three Months Ended
March 31,
 20232022
Cash flows from operating activities:
Net income (loss)$134,507 $75,343 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of real estate, in-place lease, and other intangibles179,225 177,733 
Stock-based compensation amortization expense3,287 4,721 
Amortization of deferred financing costs2,821 2,689 
Straight-line rents(747)(11,158)
Amortization of nonrefundable entrance fees and above (below) market lease intangibles(25,690)(24,725)
Equity loss (income) from unconsolidated joint ventures(1,816)(2,148)
Distributions of earnings from unconsolidated joint ventures185 237 
Loss (gain) on sale of real estate under direct financing leases— (22,693)
Deferred income tax expense (benefit)(402)(79)
Impairments and loan loss reserves (recoveries), net(2,213)132 
Loss (gain) on sales of real estate, net(81,578)(3,785)
Casualty-related loss (recoveries), net529 — 
Other non-cash items1,698 (1,593)
Changes in:
Decrease (increase) in accounts receivable and other assets, net(19,949)(4,144)
Increase (decrease) in accounts payable, accrued liabilities, and deferred revenue(15,936)3,653 
Net cash provided by (used in) operating activities173,921 194,183 
Cash flows from investing activities:
Acquisitions of real estate(10,219)(134,067)
Development, redevelopment, and other major improvements of real estate(204,889)(178,285)
Leasing costs, tenant improvements, and recurring capital expenditures(22,789)(22,839)
Proceeds from sales of real estate, net141,559 13,265 
Investments in unconsolidated joint ventures(9,640)(1,486)
Distributions in excess of earnings from unconsolidated joint ventures3,210 3,875 
Proceeds from insurance recovery2,650 — 
Proceeds from sales/principal repayments on loans receivable, direct financing leases, and marketable debt securities158,381 75,435 
Investments in loans receivable and other(1,918)(1,860)
Net cash provided by (used in) investing activities56,345 (245,962)
Cash flows from financing activities:
Borrowings under bank line of credit and commercial paper3,372,255 3,732,668 
Repayments under bank line of credit and commercial paper(3,811,861)(3,567,830)
Issuances and borrowings of term loans, senior unsecured notes, and mortgage debt399,532 — 
Repayments and repurchases of term loans, senior unsecured notes, and mortgage debt(1,325)(1,270)
Payments for debt extinguishment and deferred financing costs(4,175)— 
Issuance of common stock and exercise of options, net of offering costs(151)(4)
Repurchase of common stock(6,467)(11,352)
Dividends paid on common stock(164,976)(163,447)
Distributions to and purchase of noncontrolling interests(22,803)(7,509)
Contributions from and issuance of noncontrolling interests96 233 
Net cash provided by (used in) financing activities(239,875)(18,511)
Net increase (decrease) in cash, cash equivalents, and restricted cash(9,609)(70,290)
Cash, cash equivalents, and restricted cash, beginning of period126,834 219,448 
Cash, cash equivalents, and restricted cash, end of period$117,225 $149,158 
See accompanying Notes to the Unaudited Consolidated Financial Statements.

8
HCP,
Table of Contents
Healthpeak Properties, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1.  Business
Overview
HCP,Healthpeak Properties, Inc., a Standard & Poor’s (“S&P”) 500 company, is a Maryland corporation that is organized to qualify as a real estate investment trust (“REIT”) which,that, together with its consolidated entities (collectively, “HCP”“Healthpeak” or the “Company”), invests primarily in real estate serving the healthcare industry in the United States (“U.S.”). The CompanyHealthpeak® acquires, develops, owns, leases, manages and disposes ofmanages healthcare real estate and provides financing to healthcare providers.estate. The Company’s diverse portfolio is comprised of investments in the following reportable healthcare segments: (i) senior housing triple-net;life science; (ii) senior housing operating portfoliomedical office; and (iii) continuing care retirement community (“SHOP”CCRC”); (iii) life science.
The Company’s corporate headquarters are in Denver, Colorado, and (iv) medical office.
Master Transactionsit has additional offices in California, Tennessee, and Cooperation Agreement with BrookdaleMassachusetts.
On November 1, 2017,February 7, 2023, Healthpeak Properties, Inc. announced its intent to complete an UPREIT reorganization. As part of the Companyreorganization, the company formerly known as Healthpeak Properties, Inc. (“Old Healthpeak”) formed New Healthpeak, Inc. (“New Healthpeak”) as a wholly owned subsidiary, and Brookdale Senior LivingNew Healthpeak formed Healthpeak Merger Sub, Inc. (“Brookdale”Merger Sub”) enteredas a wholly owned subsidiary. On February 10, 2023, Merger Sub merged with and into Old Healthpeak, with Old Healthpeak continuing as the surviving corporation and a Master Transactions and Cooperation Agreementwholly owned subsidiary of New Healthpeak (the “MTCA”“Merger”) to provide the Company with the ability to significantly reduce its concentration of assets leased to and/or managed by Brookdale. Through a series of dispositions and transitions of assets currently leased to and/or managed by Brookdale, as contemplated by the MTCA and further described below, the Company’s exposure to Brookdale is expected to be significantly reduced.
Master Lease Transactions. . In connection with the overall transaction pursuantMerger, New Healthpeak changed its name to Healthpeak Properties, Inc. In connection with the UPREIT reorganization and immediately following the Merger, Old Healthpeak converted from a Maryland corporation to a Maryland limited liability company named Healthpeak OP, LLC (“Healthpeak OP”). Following the UPREIT reorganization, New Healthpeak’s business is conducted through Healthpeak OP and New Healthpeak does not have material assets or liabilities, other than through its investment in Healthpeak OP. This Quarterly Report on Form 10-Q pertains to the MTCA,business and results of operations of Old Healthpeak through February 9, 2023 and of New Healthpeak from and including February 10, 2023, for the Company (through certain of its subsidiaries), and Brookdale (through certain of its subsidiaries) (the “Lessee”) entered into an Amended and Restated Master Lease and Security Agreement (the “Amended Master Lease”), which amended and restatedquarter ended March 31, 2023. For additional information on the then-existing triple-net leases between the parties for 78 assets (before giving effect to the contemplated sale or transition of 34 assets discussed below), which account for primarily all of the assets subject to triple-net leases between the Company and the Lessee. Under the Amended Master Lease, the Company will have the benefit of a guaranty from Brookdale of the Lessee’s obligations and, upon a change in control, will have various additional protections under the MTCA and the Amended Master Lease including:
A security deposit (which increases if specified leverage thresholds are exceeded);
A termination right if certain financial covenants and net worth test are not satisfied;
Enhanced reporting requirements and related remedies; and
The right to market for sale the CCRC portfolio.
Future changes in control of Brookdale are permitted pursuant to the Amended Master Lease, subject to certain conditions, including the purchaser either meeting experience requirements or retaining a majority of Brookdale’s principal officers.
The Amended Master Lease preserves the renewal terms and, with certain exceptions, the rents under the previously existing triple-net leases. In addition, the Company and Brookdale agreed to the following:
The Company will have the right to sell, or transition to other operators, 32 triple-net assets. If such sale or transition does not occur within one year, the triple-net lease with respect to such assets will convert to a cash flow lease (under which the Company will bear the risks and rewards of operating the assets) with a term of two years, provided that the Company has the right to terminate the cash flow lease at any time during the term without penalty;
The Company will provide an aggregate $5 million annual reduction in rent on three assets, effective January 1, 2018;
The Company will sell two triple-net assets to Brookdale or its affiliates for $35 million; and
The Company will have the right to convert five assets to a cash flow lease by December 31, 2017. The Company has the right to terminate the cash flow lease without penalty to facilitate the sale or transition of these additional assets, at its option.

Joint Venture Transactions. Also pursuant to the MTCA, the Company and Brookdale agreed to the following:
The Company, which currently owns 90% of the interests in its RIDEA I and RIDEA III joint ventures with Brookdale, will purchase Brookdale’s 10% noncontrolling interest in each joint venture. These joint ventures collectively own and operate 58 independent living, assisted living, memory care and/or skilled nursing facilities (the “RIDEA Facilities”);
The Company will have the right to sell, or transition to other managers, 36 of the RIDEA Facilities and terminate related management agreements with an affiliate of Brookdale without penalty. If the related management agreements are not terminated within one year, the base management fee (5% of gross revenues) increases by 1% of gross revenues per year over the following two years to a maximum of 7% of gross revenues;
The Company will sell four of the RIDEA Facilities to Brookdale or its affiliates for $239 million;
A Brookdale affiliate will continue to manage the remaining 18 RIDEA Facilities pursuant to amended and restated management agreements, which provide for extended terms on select assets, modified performance hurdles for extensions and incentive fees, and modified termination rights (including stricter performance-based termination rights, a staggered right to terminate seven agreements over a 10 year period beginning in 2021, and a right to terminate at will upon payment of a termination fee, in lieu of sale-related termination rights) and two other existing facilities managed in separate RIDEA structures; and
The Company will have the right to sell, to certain permitted transferees, its 49% ownership interest in joint ventures that own and operate a portfolio of continuing care retirement communities and in which Brookdale owns the other 51% interest (the “CCRC JV”), subject to certain conditions and a right of first offer in favor of Brookdale. Brookdale will have a corresponding right to sell its 51% interest in the CCRC JV to certain permitted transferees, subject to certain conditions, a right of first offer and a right to terminate management agreements following such sale of Brookdale’s interest, each in favor of HCP. Following a change in control of Brookdale, the Company will have the right to initiate a sale of the CCRC portfolio, subject to certain rights of first offer and first refusal in favor of Brookdale.
RIDEA II Sale Transaction
In January 2017, the Company completed the contribution of its ownership interest in RIDEA II to an unconsolidated JV owned by HCP and an investor group led by Columbia Pacific Advisors, LLC (“CPA”) (“HCP/CPA PropCo” and “HCP/CPA OpCo,” together, the “HCP/CPA JV”). In addition, RIDEA II was recapitalized with $602 million of debt, of which $360 million was provided by a third-party and $242 million was provided by HCP. In return for both transaction elements, the Company received combined proceeds of $480 million from the HCP/CPA JV and $242 million in loan receivables and retained an approximately 40% ownership interest in RIDEA II (the note receivable and 40% ownership interest are herein referred to as the “RIDEA II Investments”). This transaction resulted in the Company deconsolidating the net assets of RIDEA II and recognizing a net gain on sale of $99 million. The RIDEA II Investments are currently recognized and accounted for as equity method investments.
On November 1, 2017, the Company entered into a definitive agreement with an investor group led by CPA to sell its remaining 40% ownership interest in RIDEA II. The Company expects the transaction to close in 2018. CPA has also agreed to cause refinancing ofUPREIT reorganization, see the Company’s $242 million loan receivables from RIDEA II within one year followingCurrent Report on Form 8-K12B filed with the close of the transaction. Total expected proceeds to the Company from the transactionU.S. Securities and refinancing of the loan receivables from RIDEA II are $332 million.Exchange Commission (“SEC”) on February 10, 2023.
NOTE 2.  Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenuerevenues and expenses during the reporting period. Actual results could differ from management’s estimates.
The consolidated financial statements include the accounts of HCP,Healthpeak Properties, Inc., its wholly-owned subsidiaries, joint ventures (“JVs”), and variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, allAll adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations, and cash flows have been included. Operating results for the three and nine months ended September 30, 2017March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2023. The accompanying unaudited interim financial information should be read

in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the U.S. SecuritiesSEC.
Government Grant Income
On March 27, 2020, the federal government enacted the Coronavirus Aid, Relief, and Exchange CommissionEconomic Security Act (“SEC”CARES Act”).
Real Estate
On January 1, 2017 to provide financial aid to individuals, businesses, and state and local governments.During the three months ended March 31, 2023 and 2022, the Company adoptedreceived government grants under the CARES Act primarily to cover increased expenses and lost revenue during the coronavirus pandemic. Grant income is recognized to the extent that qualifying expenses and lost revenues exceed grants received and the Company will comply with all conditions attached to the grant. As of March 31, 2023, the amount of qualifying expenditures and lost revenue exceeded grant income recognized and the Company believes it has complied and will continue to comply with all grant conditions. In the event of non-compliance, all such amounts received are subject to recapture.
9
Table of Contents
The following table summarizes information related to government grant income received and recognized by the Company (in thousands):
Three Months Ended
March 31,
20232022
Government grant income recorded in other income (expense), net$137 $6,552 
Government grant income recorded in equity income (loss) from unconsolidated joint ventures228 648 
Government grant income recorded in income (loss) from discontinued operations— 206 
Total government grants received$365 $7,406 
Discontinued Operations
Senior Housing Triple-Net and Senior Housing Operating Portfolio Dispositions
In 2020, the Company concluded that the dispositions of its senior housing triple-net and Senior Housing Operating Property (“SHOP”) portfolios represented a strategic shift that had a major effect on its operations and financial results. Therefore, senior housing triple-net and SHOP assets are classified as discontinued operations in all periods presented herein. See Note 4 for further information.
Recent Accounting Pronouncements
Government Assistance. In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Clarifying2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which increases the Definitiontransparency of a Business (“ASU 2017-01”) which narrowsgovernment assistance including the Financial Accounting Standards Board’s (“FASB”) definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset, or a group of assets, or a business. ASU 2017-01 states that when substantially alldisclosure of the fair valuetypes of assistance, an entity’s accounting for assistance, and the effect of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. If this initial test is not met, a set cannot be considered a business unless it includesassistance on an acquired input and a substantive process that together significantly contribute to the ability to create outputs. In addition, ASU 2017-01 clarifies the requirements for a set of activities to be considered a business and narrows the definition of an output. This ASU is to be applied prospectively and the Company expects that a majority of its future real estate acquisitions and dispositions will be deemed asset transactions rather than business combinations. As a result, for asset acquisitions the Company will record identifiable assets acquired, liabilities assumed and any associated noncontrolling interests at cost on a relative fair value basis. In addition, for such asset acquisitions, no goodwill will be recognized, third party transaction costs will be capitalized and any associated contingent consideration will be recorded when the contingency is resolved. 
Reclassifications
Certain amounts in the Company’s consolidatedentity’s financial statements have been reclassified for prior periods to conform to the current period presentation. Certain prior period amounts have been reclassified on consolidated statements of operations for discontinued operations (see Note 4).
Recent Accounting Pronouncements
In February 2017, the FASB issued ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”).statements. The amendments in ASU 2017-05 clarify the scope of the FASB’s recently established guidance on nonfinancial asset derecognition which applies to the derecognition of all nonfinancial assets and in-substance nonfinancial assets. In addition, ASU 2017-05 clarifies the accounting for partial sales of nonfinancial assets and in-substance nonfinancial assets to align with the new revenue recognition standard (see below). ASU 2017-05 is effective for annual periods beginning after December 15, 2017, including interim periods within, and must be adopted in conjunction with the Revenue ASUs (as defined below). ASU 2017-05 can be adopted using a full retrospective approach or a modified retrospective approach, resulting in a cumulative-effect adjustment to equity as of the beginning of the fiscal year in which the guidance is effective. The Company has not yet elected a transition method and is evaluating the complete impact of the adoption of the Revenue ASUs (see below)ASU 2021-10 on January 1, 2018 to its consolidated financial position, results of operations and disclosures. The Company expects to complete its evaluation of the impacts of the Revenue ASUs during the fourth quarter of 2017.
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments held by financial institutions and other organizations. The amendments in ASU 2016-13 eliminate the “probable” initial threshold for recognition of credit losses in current accounting guidance and, instead, reflect an entity’s current estimate of all expected credit losses over the life of the financial instrument. Previously, when credit losses were measured under current accounting guidance, an entity generally only considered past events and current conditions in measuring the incurred loss. The amendments in ASU 2016-13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. A reporting entity is required to apply the amendments in ASU 2016-13 using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. Upon adoption of ASU 2016-13, the Company is required to reassess its financing receivables, including direct finance leases and loans receivable, and expects that application of ASU 2016-13 may result in the Company recognizing credit losses at an earlier date than would otherwise be recognized under current accounting guidance. The Company is evaluating the impact of the adoption of ASU 2016-13 on January 1, 2020 to its consolidated financial position and results of operations.
Between May 2014 and May 2016, the FASB issued three ASUs changing the requirements for recognizing and reporting revenue (together, herein referred to as the “Revenue ASUs”): (i) ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), (ii) ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”) and (iii) ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”). ASU 2014-09 provides guidance for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2016-08 is intended to

improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2016-12 provides practical expedients and improvements on the previously narrow scope of ASU 2014-09. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers(Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 defers the effective date of ASU 2014-09 by one year to fiscal years, and interim periods within, beginning after December 15, 2017. All subsequent ASUs related to ASU 2014-09, including ASU 2016-08 and ASU 2016-12, assumed the deferred effective date enforced by ASU 2015-14. Early adoption of the Revenue ASUs is permitted for annual periods, and interim periods within, beginning after December 15, 2016. A reporting entity may apply the amendments in the Revenue ASUs using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or full retrospective approach.
As the primary source of revenue for the Company is generated through leasing arrangements, which are excluded from the Revenue ASUs (as it relates to the timing and recognition of revenue), the Company expects that it may be impacted in its recognition of non-lease revenue, such as certain resident fees in its RIDEA structures (a portion of which are2022 did not generated through leasing arrangements), non-lease components of revenue from lease agreements and its recognition of real estate sale transactions. Under ASU 2014-09, revenue recognition for real estate sales is largely based on the transfer of control versus continuing involvement under current guidance. As a result, the Company generally expects that the new guidance will result in more transactions qualifying as sales of real estate and revenue being recognized at an earlier date than under current accounting guidance. Additionally, upon adoption of the Revenue ASUs in 2018, the Company anticipates that it will be required to separately disclose the components of its total revenue between lease revenue accounted for under existing lease guidance and service revenue accounted for under the new Revenue ASUs, including non-lease components such as certain services embedded in base leasing fees. The Company has not yet elected a transition method and is evaluating the complete impact of the adoption of the Revenue ASUs on January 1, 2018 to its consolidated financial position, results of operations and disclosures. The Company expects to complete its evaluation of the impacts of the Revenue ASUs during the fourth quarter of 2017.
In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 amends the current accounting for leases to: (i) require lessees to put most leases on their balance sheets, but continue recognizing expenses on their income statements in a manner similar to requirements under current accounting guidance, (ii) eliminate current real estate specific lease provisions and (iii) modify the classification criteria and accounting for sales-type leases for lessors. ASU 2016-02 is effective for fiscal years, and interim periods within, beginning after December 15, 2018. Early adoption is permitted. The transition method required by ASU 2016-02 varies based on the specific amendment being adopted. As a result of adopting ASU 2016-02, the Company will recognize all of its significant operating leases for which it is the lessee, including corporate office leases and ground leases, on its consolidated balance sheets and will capitalize fewer legal costs related to the drafting and execution of its lease agreements. From a lessor perspective, the Company expects that it will be required to further bifurcate lease agreements to separately recognize and disclose non-lease components that are executory in nature. Lease components will continue to be recognized on a straight-line basis over the lease term and certain non-lease components will be accounted for under the Revenue ASUs. The disaggregated disclosure of lease and executory non-lease components (e.g., maintenance) will be required upon the adoption of ASU 2016-02 . The Company anticipates that it will elect a practical expedient offered in ASU 2016-02 that allows an entity to not reassess the following upon adoption (must be elected as a group): (i) whether an expired or existing contract contains a lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. The Company does not expect the bifurcation of non-lease components from a lease agreement to significantly impact the existing revenue recognition pattern. The Company is still evaluating the complete impact of the adoption of ASU 2016-02 on January 1, 2019 to its consolidated financial position, results of operations and disclosures.
The following ASUs have been issued, but not yet adopted, and the Company does not expect a material impact to itson the Company’s consolidated financial position, results of operations, cash flows, or disclosures upon adoption:disclosures.
Reference Rate Reform. In March 2020, the FASB issued ASU No. 2017-12, Targeted Improvements2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period of time to Accountingease the potential burden in accounting for, Hedging Activities (“or recognizing the effects of, reference rate reform on financial reporting. In January 2021, the FASB issued ASU 2017-12”). No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2017-122021-01”), which amends the scope of ASU 2020-04 to include derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is effective for fiscal years, including interim periods within, beginning aftermodified as a result of reference rate reform. In December 15, 2018 and early adoption is permitted. For cash flow and net investments hedges existing at2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which defers the sunset date of adoption, a reporting entity must apply the reference rate reform guidance to December 31, 2024. The amendments in ASU 2017-12 using2020-04, ASU 2021-01, and ASU 2022-06 were effective immediately upon issuance. In 2022, the modified retrospective approachCompany elected to apply certain hedge accounting expedients provided by recording a cumulative-effect adjustment to equity asASU 2020-04 and ASU 2021-01, which preserves the hedging relationship of the beginning of the fiscal year of adoption. The presentation and disclosure amendments in ASU 2017-12 must be applied using a prospective approach.
ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 is effective for fiscal years, including interim periods within, beginning after December 15, 2019 (uponderivatives. During the first goodwill impairment test performed during that fiscal year). Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. A reporting entity must applyquarter of 2023, the amendments in ASU 2017-04 using a prospective approach.Company amended certain of its variable rate mortgage debt and the related interest rate swap agreements to change the interest rate benchmark from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). The Company plans to adopt ASU 2017-04 during the fourth quarter of 2017.
ASU No. 2016-18, Restricted Cash (“ASU 2016-18”). ASU 2016-18 is effective for fiscal years, and interim periods within, beginning after December 15, 2017. Early adoption is permitted. A reporting entity must apply the amendments

in ASU 2016-18 using a full retrospective approach. The Company plans to adopt ASU 2016-18 during the fourth quarter of 2017.
ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 is effective for fiscal years, and interim periods within, beginning after December 15, 2017. Early adoption is permitted as of the first interim period presented in any year following issuance. A reporting entity must apply the amendments in ASU 2016-16 using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. 
ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 is effective for fiscal years, and interim periods within, beginning after December 15, 2017. Early adoption is permitted. A reporting entity must apply the amendments in ASU 2016-15 using a full retrospective approach. The Company plans to adopt ASU 2016-15 during the fourth quarter of 2017.
ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 is effective for fiscal years, and interim periods within, beginning after December 15, 2017. Early adoption is permitted only for updates to certain disclosure requirements. A reporting entity is requiredelected to apply certain practical expedients provided by ASU 2020-04 and ASU 2021-01 related to cash flow hedges, which did not have a material impact on the amendments inCompany’s consolidated financial position, results of operations, cash flows, or disclosures. The expedients provided by ASU 2016-01 using2020-04, ASU 2021-01, and ASU 2022-06 and the effects of reference rate reform have not had, and are not expected to have, a modified retrospective approach by recording a cumulative-effect adjustment to equity asmaterial impact on the Company’s consolidated financial position, results of the beginning of the fiscal year of adoption.
operations, cash flows, or disclosures.
NOTE 3.  Real Estate Property Investments
Investments in2023 Real Estate
The following table summarizes the Company’s real estate acquisitions for the nine months ended September 30, 2017 (in thousands):
  Consideration Assets Acquired
Segment 
Cash Paid/
Debt Settled
 
Liabilities
Assumed
 Real Estate 
Net
Intangibles
Life science $87,467
 $2,841
 $91,208
 $(900)
Medical office 48,349
 837
 44,401
 4,785
  $135,816
 $3,678
 $135,609
 $3,885
The following table summarizes the Company’s real estate acquisitions for the nine months ended September 30, 2016 (in thousands):
  Consideration Assets Acquired
Segment 
Cash Paid/
Debt Settled
 
Liabilities
Assumed
 Real Estate 
Net
Intangibles
Senior housing triple-net $76,362
 $1,200
 $71,875
 $5,687
SHOP 113,971
 76,931
 177,551
 13,351
Life science 49,000
 —
 47,400
 1,600
Other non-reportable segments 17,909
 —
 16,596
 1,313
  $257,242
 $78,131
 $313,422
 $21,951
 Investment Acquisitions
In October 2017,January 2023, the Company entered into definitive agreements to acquireclosed a $228 million life science campus knownacquisition in Cambridge, Massachusetts for $9 million.
2022 Real Estate Investment Acquisitions
67 Smith Place
In January 2022, the Company closed a life science acquisition in Cambridge, Massachusetts for $72 million.
Vista Sorrento Phase II
In January 2022, the Company closed a life science acquisition in San Diego, California for $24 million.
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Webster MOB Portfolio
In March 2022, the Company acquired a portfolio of two medical office buildings (“MOBs”) in Houston, Texas for $43 million.
Northwest Medical Plaza
In May 2022, the Company acquired one MOB in Bentonville, Arkansas for $26 million.
Concord Avenue Land Parcels
In December 2022, the Company closed a life science acquisition in Cambridge, Massachusetts for $18 million.
Development Activities
The Company’s commitments, which are primarily related to development and redevelopment projects and Company-owned tenant improvements,decreased by $35 million, to $217 million at March 31, 2023, when compared to December 31, 2022, primarily as the Hayden Research Campus locateda result of construction spend on existing projects in the Boston suburbfirst quarter of Lexington, Massachusetts. The Company will own an interest in this campus through a consolidated joint venture with King Street Properties. The campus includes two existing buildings totaling 400,000 square feet and is currently 66% leased.2023, thereby decreasing the remaining commitment.
Impairments
NOTE 4.  Dispositions of Real Estate
During the third quarter 2017, the Company determined that 11 underperforming senior housing triple-net assets that are candidates for potential future sale were impaired. Accordingly, the Company wrote-down the carrying amount of these 11 assets to their fair value, which resulted in an aggregate impairment charge of $23 million. The fair value of the assets was based on forecasted sales prices which are considered to be Level 2 measurements within the fair value hierarchy.

Casualty-Related Losses
As a result of Hurricane Harvey and Hurricane Irma during the third quarter of 2017, the Company recorded an estimated $11 million of casualty-related losses, net of a small insurance recovery. The losses are comprised of $6 million of property damage and (ii) $5 million of other associated costs, including storm preparation, clean up, relocation and other costs. Of the total $11 million casualty losses incurred, $10 million was recorded in Other income (expense), net, and $1 million was recorded in Equity income (loss) from unconsolidated joint ventures as it relates to casualty losses for properties owned by certain of our unconsolidated joint ventures. In addition, the Company recorded a $2 million deferred tax benefit associated with the casualty-related losses.
NOTE 4. Discontinued Operations and
2023 Dispositions of Real Estate
Discontinued Operations - Quality Care Properties, Inc.
On October 31, 2016,In January 2023, the Company completed the spin-off (the “Spin-Off”)sold two life science facilities in Durham, North Carolina, which were classified as held for sale as of its subsidiary, Quality Care Properties, Inc. (“QCP”). The Spin-Off included 338 properties, primarily comprisedDecember 31, 2022, for $113 million, resulting in total gain on sales of the HCR ManorCare, Inc. (“HCRMC”) direct financing lease (“DFL”) investments and an equity investment$60 million. Additionally, in HCRMC. QCP is an independent, publicly-traded, self-managed and self-administrated REIT.
In connection with the Spin-Off,March 2023, the Company entered into a Transition Services Agreement (“TSA”) with QCP. Per the termssold two MOBs for $32 million, resulting in total gain on sales of the TSA, the Company agreed to provide certain administrative and support services to QCP on a transitional basis for established fees. The TSA terminated on October 31, 2017.$21 million.
Summarized financial information for discontinued operations for the three and nine months ended September 30, 2016 is as follows (in thousands):2022 Dispositions of Real Estate
 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
Revenues:   
Rental and related revenues$6,898
 $20,620
Tenant recoveries386
 1,147
Income from direct financing leases116,429
 345,940
Total revenues123,713
 367,707
Costs and expenses:   
Depreciation and amortization(1,467) (4,401)
Operating(1,033) (3,076)
General and administrative(6) (68)
Acquisition and pursuit costs(14,805) (28,509)
Other income (expense), net22
 64
Income (loss) before income taxes106,424
 331,717
Income tax benefit (expense)1,789
 (47,721)
Total discontinued operations$108,213
 $283,996
HCR ManorCare, Inc.
Discontinued operations is primarily comprised of QCP’s HCRMC DFL investments. During the nine months ended September 30, 2016, the Company received cash payments of $346 million from the HCRMC DFL investments.
No accretion related to its HCRMC DFL investments was recognized in 2016 due to the Company utilizing a cash basis method of accounting beginning January 1, 2016.
The Company’s acquisition of the HCRMC DFL investments in 2011 was subject to federal and state built-in gain tax of up to $2 billion if all the assets were sold within 10 years of the acquisition date. At the time of acquisition, the Company intended to hold the assets for at least 10 years, at which time the assets would no longer be subject to the built-in gain tax. In December 2015, the U.S. Federal Government passed legislation which permanently reduced the holding period, for federal tax purposes, to 5 years, which the Company satisfied in April 2016. This legislation was not extended to certain states, which maintain a 10 year requirement. During the three months ended March 31, 2016,2022, the Company determined that it may sell assets duringsold one life science facility in Salt Lake City, Utah for $14 million, resulting in a gain on sale of $4 million.
During the next five yearsthree months ended June 30, 2022, the Company sold threeMOBs and therefore, recorded a deferred tax liabilityone MOB land parcel for $27 million, resulting in total gain on sales of $49$10 million.
During the three months ended September 30, 2022, the Company sold two MOBs for $9 million, representing its estimated exposure to state built-inresulting in total gain tax.

Dispositionson sales of Real Estate$1 million.
Held for Sale and Discontinued Operations
At September 30, 2017, threeIn 2020, the Company concluded that the dispositions of its senior housing triple-net facilities and fourSHOP portfolios represented a strategic shift that had a major effect on its operations and financial results. Therefore, senior housing triple-net and SHOP assets are classified as discontinued operations in all periods presented herein.
At each of March 31, 2023 and December 31, 2022, the total assets and total liabilities classified as discontinued operations were zero.
As of March 31, 2023, no assets were classified as held for sale. As of December 31, 2022, two life science facilitiesassets were classified as held for sale, with an aggregate carrying value of $216$50 million, primarily comprised of net real estate assets of $199$44 million.
At As of December 31, 2016, 64 senior housing triple-net facilities, four life science facilities and a SHOP facility were classified as2022, liabilities related to these assets held for sale with an aggregate carrying value of $928 million, primarily comprised of real estatewere $4 million. These two life science assets of $809 million. All facilities held for sale at December 31, 2016 were sold in January 2023, as discussed above.
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The results of discontinued operations during the three months ended March 31, 2023 and 2022 are presented below (in thousands) and are included in the consolidated results of operations for the three months ended March 31, 2023 and 2022:
Three Months Ended
March 31,
20232022
Revenues:
Resident fees and services$— $2,655 
Total revenues— 2,655 
Costs and expenses:
Operating— 2,674 
Total costs and expenses— 2,674 
Other income (expense):
Gain (loss) on sales of real estate, net— (71)
Other income (expense), net— 3 
Total other income (expense), net— (68)
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures— (87)
Income tax benefit (expense)— 340 
Equity income (loss) from unconsolidated joint ventures— 64 
Income (loss) from discontinued operations$— $317 
Impairments of Real Estate
During the three months ended March 31, 2023 and 2022, the Company did not recognize any impairment charges.
Other Losses
During the three months ended March 31, 2022, the Company recognized $14 million of expenses within other income (expense), net on the Consolidated Statements of Operations for tenant relocation and other costs associated with the demolition of an MOB.
NOTE 5.  Leases
Lease Income
The following table summarizes the Company’s lease income, excluding discontinued operations (in thousands):
Three Months Ended
March 31,
20232022
Fixed income from operating leases$296,217 $287,292 
Variable income from operating leases96,214 82,858 
Interest income from direct financing leases— 1,168 
Direct Financing Leases
2022 Direct Financing Lease Sale
During the first quarter of 2017.
2017 Dispositions 
In January 2017,2022, the Company sold four life science facilities in Salt Lake City, Utahits remaining hospital under a direct financing lease (“DFL”) for $76 million, resulting in a net gain on sale of $45 million.
In March 2017, the Company sold 64 senior housing triple-net assets, previously under triple-net leases with Brookdale, for $1.125 billion to affiliates of Blackstone Real Estate Partners VIII, L.P., resulting in a net gain on sale of $170 million.
In April 2017, the Company sold a land parcel in San Diego, California for $27 million and one life science building in San Diego, California for $5 million and recognized a total net gain on sales of $1 million.
In August 2017, the Company sold two senior housing triple-net facilities for $15$68 million and recognized a gain on sale of $5 million.$23 million, which is included in other income (expense), net. Therefore, at March 31, 2023 and December 31, 2022, the Company had no leases classified as a DFL.
2016 Dispositions
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Straight-Line Rents
For operating leases with minimum scheduled rent increases, the Company recognizes income on a straight-line basis over the lease term when collectibility of future minimum lease payments is probable. If the Company determines that collectibility of future minimum lease payments is not probable, the straight-line rent receivable balance is written off and recognized as a decrease in revenue in that period and future revenue recognition is limited to amounts contractually owed and paid. The Company does not resume recognition of income on a straight-line basis unless it determines that collectibility of future payments related to these leases is probable.
During the ninethree months ended September 30, 2016,March 31, 2023, the Company sold five post-acute/skilled nursing facilities and two senior housing triple-net facilities for $130wrote off $9 million a life science facility for $74 million, three medical office buildings for $20 million and a SHOP facility for $6 million and recognized total gain on sales of $120 million.
NOTE 5.  Net Investment in Direct Financing Leases
Net investment in DFLs consistedstraight-line rent receivable associated with Sorrento Therapeutics, Inc., which commenced voluntary reorganization proceedings under Chapter 11 of the following (dollarsU.S. Bankruptcy Code during the period. This write-off was recognized as a reduction in thousands):
 September 30,
2017		 December 31,
2016
Minimum lease payments receivable$1,076,049
 $1,108,237
Estimated residual value504,457
 539,656
Less unearned income(865,402) (895,304)
Net investment in direct financing leases$715,104
 $752,589
Properties subject to direct financing leases29
 30
Certain DFLs contain provisions that allowrental and related revenues on the tenantsConsolidated Statements of Operations and future revenue related to elect to purchase the properties during or at the end of the lease terms for the aggregate initial investment amount plus adjustments, if any, as defined in the lease agreements. Certain leases also permit the Company to require the tenants to purchase the properties at the end of the lease terms.
In February 2017, the Company sold a hospital within a DFL in Palm Beach Gardens, Florida for $43 million to the currentthis tenant and recognized a gain on sale of $4 million.

Direct Financing Lease Internal Ratings
The following table summarizes the Company’s internal ratings for DFLs at September 30, 2017 (dollars in thousands):
  
Carrying
Amount
 
Percentage of
DFL Portfolio
 Internal Ratings
Segment   Performing DFLs Watch List DFLs Workout DFLs
Senior housing triple-net $630,500
 88% $273,383
 $357,117
 $—
Other non-reportable segments 84,604
 12 84,604
 —
 —
  $715,104
 100% $357,987
 $357,117
 $—
Beginning September 30, 2013, the Company placed a 14-property senior housing triple-net DFL (the “DFL Watchlist Portfolio”) on nonaccrual status and “Watch List” status. The Company determined that the collection of all rental payments was and continues towill be no longer reasonably assured; therefore, rental revenue for the DFL Watchlist Portfolio has been recognized on a cash basis. During the three months ended September 30, 2017 and 2016, the Company recognized income from DFLs of $4 million and $3 million, respectively, and received cash payments of $5 million from the DFL Watchlist Portfolio. During the nine months ended September 30, 2017 and 2016, the Company recognized income from DFLs of $10 million and received cash payments of $14 million and $15 million, respectively, from the DFL Watchlist Portfolio. The carrying value of the DFL Watchlist Portfolio was $357 million and $361 million at September 30, 2017 and December 31, 2016, respectively.
NOTE 6.  Loans Receivable
The following table summarizes the Company’s loans receivable (in thousands):
 March 31,
2023		December 31,
2022
Secured loans(1)
$214,238 $350,837 
CCRC resident loans36,470 33,083 
Unamortized discounts, fees, and costs(1,407)(808)
Reserve for loan losses(6,152)(8,280)
Loans receivable, net$243,149 $374,832 
_______________________________________
 September 30, 2017 December 31, 2016
 
Real Estate
Secured
 
Other
Secured
 Total 
Real Estate
Secured
 
Other
Secured
 Total
Mezzanine(1)
$—
 $277,299
 $277,299
 $—
 $615,188
 $615,188
Other(2)
184,880
 —
 184,880
 195,946
 —
 195,946
Unamortized discounts, fees and costs(1)
—
 (607) (607) 413
 (3,593) (3,180)
Allowance for loan losses(3)
—
 (59,420) (59,420) —
 —
 —
 $184,880
 $217,272
 $402,152
 $196,359
 $611,595
 $807,954
(1)At each of March 31, 2023 and December 31, 2022, the Company had$40 million remaining of commitments to fund additional loans for senior housing redevelopment and capital expenditure projects.

Sunrise Senior Housing Portfolio Seller Financing
(1)At December 31, 2016, included £282 million ($348 million) outstanding and £2 million ($3 million) of associated unamortized discounts, fees and costs, both related to the HC-One Facility, which paid off in June 2017.
(2)At September 30, 2017 and December 31, 2016, included £122 million ($163 million) and £113 million ($140 million), respectively, outstanding primarily related to Maria Mallaband loans.
(3)Related to the Company’s mezzanine loan facility to Tandem Health Care discussed below.
In conjunction with the sale of 32 SHOP facilities for $664 million in January 2021, the Company provided the buyer with initial financing of $410 million. The remainder of the sales price was received in cash at the time of sale. Additionally, the Company agreed to provide up to $92 million of additional financing for capital expenditures (up to 65% of the estimated cost of capital expenditures). As of March 31, 2023, the additional financing was reduced to $40 million, of which $0.4 million had been funded. The initial and additional financing is secured by the buyer’s equity ownership in each property.
In June 2021, February 2022, July 2022, and December 2022, the Company received principal repayments of $246 million, $8 million, $27 million, and $10 million, respectively, in conjunction with the disposition of the underlying collateral. At each of March 31, 2023 and December 31, 2022, this secured loan had an outstanding principal balance of$120 million.
Other Seller Financing
In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021, the Company provided the buyer with financing of $150 million. The remainder of the sales price was received in cash at the time of sale. The financing is secured by the buyer’s equity ownership in each property. Upon maturity in January 2023, the borrower did not make the required principal repayment. In February 2023, the borrower made a partial principal repayment of $102 million and the remaining balance owed was refinanced with the Company. In connection with the refinance, the maturity date of the loan was extended to January 2024 and the interest rate on the loan was increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) plus 6.0% for the first six months of the extended term, increasing to 7.0% for the last six months of the extended term. The Company also received a $1 million extension fee in connection with the refinance, which is recognized in interest income over the remaining term of the loan.
2023 Other Loans Receivable Transactions
In February 2023, the Company received full repayment of the outstanding balance of one $35 million secured loan. In April 2023, the Company received full repayment of the outstanding balance of one $14 million secured loan.
2022 Other Loans Receivable Transactions
In May 2022, the Company received full repayment of the outstanding balance of a $2 million secured loan.
In November 2022, the Company received full repayment of the outstanding balance of a $1 million mezzanine loan.
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In December 2022, the Company extended the maturity dates of four secured loans with an aggregate outstanding balance of $61 million, originally scheduled to mature in December 2022, by one year to December 2023. In connection with the extensions, the interest rates on the loans were increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) with a floor of 8.5% for the first six months of the extended term, increasing to a floor of 10.5% for the last six months of the extended term. Two of these secured loans were repaid during 2023 as discussed above.
CCRC Resident Loans
For certain residents that qualify, CCRCs may offer to lend residents the necessary funds to satisfy the entrance fee requirements so that they are able to move into a community while still continuing the process of selling their previous home. The loans are due upon sale of the previous residence. At March 31, 2023 and December 31, 2022, the Company held$36 million and $33 million, respectively, of such notes receivable.
Loans Receivable Internal Ratings
The following table summarizesIn connection with the Company’s internal ratings forquarterly review process or upon the occurrence of a significant event, loans receivable at September 30, 2017 (dollarsare reviewed and assigned an internal rating of Performing, Watch List, or Workout. Loans that are deemed Performing meet all present contractual obligations, and collection and timing of all amounts owed is reasonably assured. Watch List Loans are defined as loans that do not meet the definition of Performing or Workout. Workout Loans are defined as loans in thousands):
  
Carrying
Amount
 
Percentage of
Loan Portfolio
 Internal Ratings
Investment Type   Performing Loans Watch List Loans Workout Loans
Real estate secured $184,880
 46% $184,880
 $—
 $—
Other secured 217,272
 54 19,898
 —
 197,374

 $402,152
 100% $204,778
 $—
 $197,374
Real Estate Secured Loans
Four Seasons Health Care. In March 2017,which the Company sold its investment in Four Seasons Health Care’s (“Four Seasons”) senior secured term loan at par plus accrued interest for £29 million ($35 million).

Other Secured Loans
HC-One Facility. On June 30, 2017, the Company received £283 million ($367 million) from the repayment of its HC-One mezzanine loan.
Tandem Health Care Loan. On July 31, 2012, the Company closed a mezzanine loan facility to lend up to $205 million to Tandem Health Care (“Tandem”), as part of the recapitalization of a post-acute/skilled nursing portfolio (the “Tandem Portfolio”). The Company funded $100 million (the “First Tranche”) at closinghas determined, based on current information and funded an additional $102 million (the “Second Tranche”) in June 2013. In May 2015, the Company increased and extended the mezzanine loan facility with Tandem to:events, that: (i) fund $50 million (the “Third Tranche”) and $5 million (the “Fourth Tranche”), which proceeds were used to repay a portion of Tandem’s existing senior and mortgage debt, respectively; (ii) extend its maturity to October 2018; and (iii) extend the prepayment penalty period through January 2017. The tranches (collectively, the “Tandem Mezzanine Loan”) bear interest at fixed annual rates of 12%, 14%,  6% and 6% per annum for the First, Second, Third and Fourth Tranches, respectively. The blended rate for the Tandem Mezzanine Loan is 11.5% per year.
Tandem leases the entire Tandem Portfolio to Consulate Health Care (“Consulate”) under a master lease (the “Tandem and Consulate Lease”). At September 30, 2017, as a result of the Tandem Portfolio’s operating performance, there are outstanding events of default under the Tandem and Consulate Lease (“Events of Default”) due to: (i) Consulate’s failure to meet certain financial covenants under the Tandem and Consulate Lease and (ii) events of default under Consulate’s working capital facility, which, through a cross-default provision, are Events of Default. Starting in April 2017, Consulate failed to pay the full amount of its rent under the Tandem and Consulate Lease which triggered another Event of Default. Through cross-default provisions, these Events of Default are also events of default under the Tandem Mezzanine Loan and Tandem’s senior mortgage debt (each, a “Loan Event of Default”). The Tandem Mezzanine Loan requires Tandem to pay default interest at a rate of 16.5% per year during periods in which there is an outstanding Loan Event of Default. Tandem did not pay the additional 5% default interest rate spread above the 11.5% and, therefore, created a monetary event of default under the Tandem Mezzanine Loan.
Although Tandem continues to remain current on its non-default interest payment obligations under the Tandem Mezzanine Loan, the Company believes that it is probable it will be unable to collect all interest and principal payments, including default interest payments,amounts due according to the contractual terms of the Tandem Mezzanine Loan. Asagreement, (ii) the Tandem Mezzanine Loanborrower is deemed collateral-dependent anddelinquent on making payments under the carrying amountcontractual terms of the Tandem Mezzanine Loan exceededagreement, and (iii) the fair value ofCompany has commenced action or anticipates pursuing action in the underlying collateral at June 30, 2017, as partnear term to seek recovery of its investment.
The following table summarizes, by year of origination, the Company’s internal ratings for loans receivable, net of unamortized discounts, fees, and reserves for loan losses, as of March 31, 2023 (in thousands):
Investment TypeYear of OriginationTotal
20232022202120202019Prior
Secured loans
Risk rating:
Performing loans$— $— $163,562 $43,117 $— $— $206,679 
Watch list loans— — — — — — — 
Workout loans— — — — — — — 
Total secured loans$— $— $163,562 $43,117 $— $— $206,679 
Current period gross write-offs$— $— $— $— $— $— $— 
Current period recoveries— — — — — — — 
Current period net write-offs$— $— $— $— $— $— $— 
CCRC resident loans
Risk rating:
Performing loans$14,482 $21,910 $— $78 $— $— $36,470 
Watch list loans— — — — — — — 
Workout loans— — — — — — — 
Total CCRC resident loans$14,482 $21,910 $— $78 $— $— $36,470 
Current period gross write-offs$— $— $— $— $— $— $— 
Current period recoveries— — — — — — — 
Current period net write-offs$— $— $— $— $— $— $— 
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Reserve for Loan Losses
The Company evaluates the liquidity and creditworthiness of its borrowers on a quarterly review process,basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. The determination of loan losses also considers concentration of credit risk associated with the senior housing industry to which its loans receivable relate. The Company’s borrowers furnish property, portfolio, and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis, which the Company recorded an impairment chargeutilizes to calculate the debt service coverages used in its assessment of internal ratings, which is a primary credit quality indicator. Debt service coverage information is evaluated together with other property, portfolio, and operator performance information, including revenue, expense, NOI, occupancy, rental rates, capital expenditures, and EBITDA (defined as earnings before interest, tax, and depreciation and amortization), along with other liquidity measures.
In its assessment of current expected credit losses for loans receivable and unfunded loan commitments, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each loan to estimate a probability of default and a resulting loss for each loan receivable. Future economic conditions are based primarily on near-term economic forecasts from the Federal Reserve and reasonable assumptions for long-term economic trends.
The following table summarizes the Company’s reserve for loan losses (in thousands):
 March 31, 2023December 31, 2022
 Secured Loans
Other(1)
TotalSecured Loans
Other(1)
Total
Reserve for loan losses, beginning of period$8,280 $— $8,280 $1,804 $9 $1,813 
Provision for expected loan losses(171)— (171)6,527 7 6,534 
Expected loan losses (recoveries) related to loans sold or repaid(1,957)— (1,957)(51)(16)(67)
Reserve for loan losses, end of period$6,152 $— $6,152 $8,280 $— $8,280 

(1)Includes CCRC resident loans and other loan activity.
Additionally, at March 31, 2023 and December 31, 2022, a liability of$0.7 millionand $0.8 million, respectively, related allowance of $57 millionto expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities.
The change in the reserve for expected loan losses during the three months ended June 30, 2017, reducing the carrying valueMarch 31, 2023 is primarily due to $200 million, which approximated the fair valueprincipal repayments on seller financing, partially offset by increased interest rates on variable rate loans.
15
Table of the collateral as of June 30, 2017. The decline in fair value of the collateral was driven by a variety of factors, including recent operating results of the underlying real estate assets, as well as market and industry data, that reflect a declining trend in admissions and a continuing shift away from higher-rate Medicare plans in the post-acute/skilled nursing sector. The calculation of the fair value of the collateral was primarily based on an income approach and relies on forecasted EBITDAR (defined as earnings before interest, taxes, depreciation and amortization, and rent) and market data, including, but not limited to, sales price per unit/bed, rent coverage ratios, and real estate capitalization rates. All valuation inputs are considered to be Level 2 measurements within the fair value hierarchy.Contents
The Company entered into a forbearance agreement with Tandem on May 1, 2017, pursuant to which it agreed to forbear from exercising remedies, including waiving default interest, with respect to the above-described Loan Events of Default under the Tandem Mezzanine Loan until June 30, 2017, which was subsequently extended to July 31, 2017 with certain modifications.
On July 31, 2017, subsequent to its second quarter 2017 quarterly review process and the aforementioned impairment, the Company entered into a binding agreement (“Agreement”) with the borrowers to provide an option to repay the Tandem Mezzanine Loan at a discounted value of $197 million (the “Repayment Value”). Upon execution of the Agreement, the borrowers posted a $2 million non-refundable deposit and secured the right to repay the Tandem Mezzanine Loan by October 25, 2017 (at the Repayment Value). A second non-refundable deposit of $2 million was posted by the borrowers on August 31, 2017. The borrowers also retained the option to extend the term of the Agreement to December 31, 2017 upon satisfaction of one of the following requirements: (i) posting of an additional $4 million non-refundable deposit, (ii) providing evidence of a commitment letter(s) for financing to satisfy the full Repayment Value, which is subject to the Company’s approval and may be granted or withheld in the Company’s sole discretion, or (iii) paying down the principal balance of the Tandem Mezzanine Loan by at least $50 million. On October 25, 2017, the borrowers exercised their option to extend the term of the Agreement to December 31, 2017 by posting an additional $4 million non-refundable deposit. The borrowers are obligated to continue making interest payments based on the $257 million par value of the Tandem Mezzanine Loan through the repayment date, adjusted for any principal payments received from Tandem. As part of the Agreement, the Company agreed to forbear from exercising remedies, including waiving default interest, with respect to the above-described Loan Events of Default under the Tandem Mezzanine Loan, through December 31, 2017. If the option is not exercised, the entire $257 million par value of the Tandem Mezzanine Loan is due on October 31, 2018.
During the third quarter of 2017, the Company recorded an additional $3 million impairment charge to write down the carrying value of the Tandem Mezzanine Loan to the Repayment Value and assigned the Tandem Mezzanine Loan an internal rating of

Workout. The repayment of the Tandem Mezzanine Loan is subject to customary closing conditions and may not occur within the anticipated timeframe or at all.
Beginning in the first quarter of 2017, the Company elected to recognize interest income on a cash basis. During both the three months ended September 30, 2017 and 2016, the Company recognized interest income and received cash payments of $8 million from Tandem. During both the nine months ended September 30, 2017 and 2016, the Company recognized interest income and received cash payments of $23 million from Tandem. The carrying value of the Tandem Mezzanine Loan was $197 million and $256 million at September 30, 2017 and December 31, 2016, respectively.

NOTE 7.  Investments in and Advances to Unconsolidated Joint Ventures
The Company owns interests in the following entities that are accounted for under the equity method (dollars in thousands):
      Carrying Amount
        September 30, December 31,
Entity(1)
 Segment Ownership% 2017 2016
CCRC JV(2)
 SHOP  49  $427,159
 $439,449
RIDEA II SHOP  40  257,766
 —
Life Science JVs(3)
 Life science 
50 - 63
 64,111
 67,879
MBK JV(2)
 SHOP  50  38,366
 38,909
Development JVs(5)
 SHOP  50 - 90  19,867
 10,459
Medical Office JVs(4)
 Medical office  20 - 67  13,620
 13,438
K&Y JVs(6)
 Other non-reportable segments  80  1,465
 1,342
Advances to unconsolidated joint ventures, net       15
 15
        $822,369
 $571,491
  Carrying Amount
   March 31,December 31,
Entity(1)
Segment
Property Count(2)
Ownership %(2)
20232022
SWF SH JVOther1954$343,873 $345,978 
South San Francisco JVs(3)
Life science770319,535 309,969 
Life Science JVLife science14926,817 26,601 
Needham Land Parcel JV(4)
Life science—3815,658 15,391 
Medical Office JVs(5)
Medical office320 - 678,796 8,738 
  $714,679 $706,677 

(1)These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.
(1)These entities are not consolidated because the Company does not control, through voting rights or other means, the JV.
(2)Includes two unconsolidated JVs in a RIDEA structure (PropCo and OpCo).
(3)Includes the following unconsolidated partnerships (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%).
(4)Includes three unconsolidated medical office partnerships (and the Company’s ownership percentage): HCP Ventures IV, LLC (20%); HCP Ventures III, LLC (30%); and Suburban Properties, LLC (67%).
(5)Includes four unconsolidated SHOP development partnerships (and the Company’s ownership percentage): (i) Vintage Park Development JV (85%); (ii) Waldwick JV (85%); (iii) Otay Ranch JV (90%); and (iv) MBK Development JV (50%).
(6)Includes three unconsolidated joint ventures.
See Note 1(2)Property counts and ownership percentages are as of March 31, 2023.
(3)In August 2022, the Company sold a 30% interest in seven life science assets in South San Francisco, California to a sovereign wealth fund. This transaction resulted in the recognition of seven unconsolidated life science joint ventures in which the Company holds a 70% ownership percentage in each joint venture. These joint ventures have been aggregated herein due to similarity of the investments and operations.
(4)Land held for further information ondevelopment is excluded from the deconsolidationproperty count as of RIDEA II.March 31, 2023.
(5)Includes two unconsolidated medical office joint ventures in which the Company holds an ownership percentage as follows: (i) Ventures IV (20%) and (ii) Suburban Properties, LLC (67%). These joint ventures have been aggregated herein due to similarity of the investments and operations. In April 2023, the Company acquired the remaining 80% interest in one of the two properties in the Ventures IV unconsolidated joint venture for $4 million.
NOTE 8.  Intangibles
The following tables summarize the Company’s intangibleIntangible assets primarily consist of lease-up intangibles and above market tenant lease assets and liabilities (in thousands):
Intangible lease assets September 30,
2017		 December 31,
2016
Gross intangible lease assets $775,848
 $911,697
Accumulated depreciation and amortization (374,981) (431,892)
Net intangible lease assets $400,867
 $479,805
Intangible lease liabilities September 30,
2017		 December 31,
2016
Gross intangible lease liabilities $124,454
 $163,924
Accumulated depreciation and amortization (71,027) (105,779)
Net intangible lease liabilities $53,427
 $58,145

NOTE 9.  Other Assets
intangibles. The following table summarizes the Company’s otherintangible lease assets (in(dollars in thousands):
Intangible lease assetsMarch 31,
2023
December 31,
2022(1)
Gross intangible lease assets$767,224 $770,285 
Accumulated depreciation and amortization(375,268)(352,224)
Intangible assets, net$391,956 $418,061 
Weighted average remaining amortization period in years55
_______________________________________
(1)Excludes intangible assets reported in assets held for sale of $2 million.
Intangible liabilities consist of below market lease intangibles. The following table summarizes the Company’s intangible lease liabilities (dollars in thousands):
Intangible lease liabilitiesMarch 31,
2023		December 31,
2022
Gross intangible lease liabilities$236,831 $237,464 
Accumulated depreciation and amortization(87,227)(81,271)
Intangible liabilities, net$149,604 $156,193 
Weighted average remaining amortization period in years77
During the three months ended March 31, 2023, no intangible assets or liabilities were acquired.
During the year ended December 31, 2022, in conjunction with the Company’s acquisitions of real estate, the Company acquired intangible assets of $7 million and intangible liabilities of $6 million. The intangible assets and liabilities acquired had a weighted average amortization period at acquisition of 7 years and 11 years, respectively.
16
 September 30,
2017		 December 31,
2016
Straight-line rent receivables, net of allowance of $22,705 and $25,059, respectively$313,627
 $311,776
Leasing costs and inducements, net102,557
 156,820
Deferred tax assets60,254
 42,458
Goodwill47,019
 42,386
Marketable debt securities, net18,567
 68,630
Other74,145
 89,554
Total other assets, net$616,169
 $711,624
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Four Seasons Health Care Senior Notes NOTE 9.  Debt
In March 2017, pursuantconnection with the UPREIT reorganization, Old Healthpeak converted to a shift inHealthpeak OP, which is the Company’s investment strategy,consolidated operating subsidiary. Healthpeak OP is the borrower under, and the Company sold its £138.5 million par value Four Seasons senior notes (the “Four Seasons Notes”) for £83 million ($101 million). The dispositionis the guarantor of, all of the Four Seasons Notes generated a £42 million ($51 million) gain on sale, recognized in other income, net,unsecured debt discussed below, which includes the Revolving Facility, Term Loan Facilities, Commercial Paper Program (each as defined below), and senior unsecured notes. The Company’s guarantee of the sales price was above the previously-impaired carrying value of £41 million ($50 million).  
NOTE 10.  Debt
senior unsecured notes is full and unconditional and applicable to existing and future senior unsecured notes.
Bank Line of Credit and Term Loans
The Company’s $2.0On May 23, 2019, the Company executed a $2.5 billion unsecured revolving line of credit facility, with a maturity date of May 23, 2023 and two six-month extension options, subject to certain customary conditions. In September 2021, the Company executed an amended and restated unsecured revolving line of credit (the “Facility”“Revolving Facility”) matures on March 31, 2018to increase total revolving commitments from $2.5 billion to $3.0 billion and contains a committed one-yearextend the maturity date to January 20, 2026. This maturity date may be further extended pursuant to two six-month extension option, at a cost of 30 basis points.options, subject to certain customary conditions. Borrowings under the Revolving Facility accrue interest at LIBORthe applicable interest rate benchmark plus a margin that depends on the credit ratings of the Company’s credit ratings.senior unsecured long-term debt. On February 10, 2023, the Company executed an amendment to the Revolving Facility to convert the interest rate benchmark from LIBOR to SOFR. The Company also pays a facility fee on the entire revolving commitment that depends on its credit ratings. Additionally, the Revolving Facility includes a sustainability-linked pricing component whereby the applicable margin may be reduced by up to 0.025% based on the Company’s achievement of specified sustainability-linked metrics, subject to certain conditions. Based on the Company’s credit ratings at September 30, 2017,March 31, 2023, and inclusive of achievement of a sustainability-linked metric during the year ended December 31, 2021, the margin on the Revolving Facility was 1.05%0.85% and the facility fee was 0.20%0.15%. The Facility also includes a feature that allows the Company to increase the borrowing capacity by an aggregate amountAt each of up to $500 million, subject to securing additional commitments. During the nine months ended September 30, 2017,March 31, 2023 and December 31, 2022, the Company had net repayments of $316 million primarily using proceeds from the RIDEA II joint venture disposition, the sale of its Four Seasons Notes and the repayment of its HC-One Facility. At September 30, 2017, the Company had $606 million, including £105 million ($141 million),no balance outstanding under the Facility, with a weighted average effective interest rate of 2.40%.Revolving Facility.
On October 19, 2017, the Company terminated theThe Revolving Facility and executed a new $2.0 billion unsecured revolving line of credit facility (the “New Facility”) maturing on October 19, 2021. Borrowings under the New Facility accrue interest at LIBOR plus a margin that depends on the Company’s credit ratings (1.00% initially). The Company pays a facility fee on the entire revolving commitment that depends on its credit ratings (0.20% initially). The New Facility contains two, six-month extension options and includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments.
On July 30, 2012,August 22, 2022, the Company executed a term loan agreement (the “Term Loan Agreement”) that provided for two senior unsecured delayed draw term loans in an aggregate principal amount of up to $500 million (the “Term Loan Facilities”). The Term Loan Facilities were available to be drawn from time to time during a 180-day period after closing, subject to customary borrowing conditions, and the Company drew the entirety of the $500 million under the Term Loan Facilities in October 2022. $250 million of the Term Loan Facilities has an initial stated maturity of 4.5 years, which may be extended for a one-year period subject to certain customary conditions. The other $250 million of the Term Loan Facilities has a stated maturity of 5 years with no option to extend. At each of March 31, 2023 and December 31, 2022, the Company had $500 million outstanding under the Term Loan Facilities.
Loans outstanding under the Term Loan Facilities accrue interest at Term SOFR plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. The Term Loan Agreement also includes a sustainability-linked pricing component whereby the applicable margin under the Term Loan Facilities may be reduced by 0.01% based on the Company’s achievement of specified sustainability-linked metrics. Based on the Company’s credit ratings as of March 31, 2023, the margin on the Term Loan Facilities was 0.95%. The Term Loan Agreement includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to an additional $500 million, subject to securing additional commitments.
In August 2022, the Company entered into a credit agreement with a syndicate of banks for a £137 million unsecured term loan (the “2012 Term Loan”). In March 2017, the Company repaid the 2012 Term Loan.
On June 30, 2017, the Company repaid £51 million of its four-year unsecured term loan entered into in January 2015 (the “2015 Term Loan”). Concurrently, the Company terminated its three-yeartwo forward-starting interest rate swap which fixed the interest of the 2015instruments that are designated as cash flow hedges (see Note 17). The Term Loan and therefore, beginning June 30, 2017,Facilities associated with these interest rate swap instruments are reported as fixed rate debt due to the 2015 Term Loan accruesCompany having effectively established a fixed interest at a rate of British pound sterling (“GBP”) LIBOR plus 1.15%, subject to adjustments basedfor the underlying debt instruments. Based on the Company’s credit ratings. At September 30, 2017ratings as of March 31, 2023, the CompanyTerm Loan Facilities had £169 million ($226 million) outstanding ona blended fixed effective interest rate of 3.77%, inclusive of the 2015 Term Loan.impact of these interest rate swap instruments and amortization of the related debt issuance costs.
The Revolving Facility (and following its termination, the New Facility) and 2015 Term Loan containFacilities are subject to certain financial restrictions and other customary requirements, including financial covenants and cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements:applicable agreement: (i) limit the ratio of ConsolidatedEnterprise Total Indebtedness to Consolidated TotalEnterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Consolidated TotalEnterprise Gross Asset Value to 30%40%; (iii) limit the ratio of Enterprise Unsecured Debt to ConsolidatedEnterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a Minimumminimum Consolidated Tangible Net Worth of $6.5$7.7 billion. At September 30, 2017, theThe Company believes it was in compliance with each of these restrictions and requirementscovenants at March 31, 2023.
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Commercial Paper Program
In September 2019, the Company established an unsecured commercial paper program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, the Company may issue, from time to time, unsecured short-term debt securities with varying maturities. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time. At each of March 31, 2023 and December 31, 2022, the maximum aggregate face or principal amount that can be outstanding at any one time was $2.0 billion. Amounts borrowed under the Commercial Paper Program will be sold on terms that are customary for the U.S. commercial paper market and will be at least equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company uses its Revolving Facility as a liquidity backstop for the repayment of unsecured short-term debt securities issued under the Commercial Paper Program. At March 31, 2023, the Company had $556 million of securities outstanding under the Commercial Paper Program, with original maturities of approximately 16 days and 2015 Term Loan.

a weighted average interest rate of 5.53%. At December 31, 2022, the Company had $996 million of securities outstanding under the Commercial Paper Program, with original maturities of approximately two months and a weighted average interest rate of 4.90%.
Senior Unsecured Notes
At September 30, 2017,March 31, 2023 and December 31, 2022, the Company had senior unsecured notes outstanding with an aggregate principal balance of $6.5 billion.$5.1 billion and $4.7 billion, respectively. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions, and other customary terms. The Company believes it was in compliance with these covenants at September 30, 2017.March 31, 2023.
The following table summarizes the Company’s senior unsecured note payoffs for the nine months ended September 30, 2017 (dollars in thousands):
Date Amount Coupon Rate
May 1, 2017 $250,000
 5.625%
July 27, 2017(1)
 $500,000
 5.375%

(1)The Company recorded a $54 million loss on debt extinguishment related to the repurchase of senior notes.
The following table summarizes the Company’s senior unsecured notes payoffs forissuances during the three months ended March 31, 2023 (dollars in thousands):
Issue DateAmountCoupon RateMaturity Year
January 17, 2023$400,000 5.25 %2032
During the three months ended March 31, 2023, there were no repurchases or redemptions of senior unsecured notes.
During the year ended December 31, 2016 (dollars in thousands):
Date Amount Coupon Rate
February 1, 2016 $500,000
 3.750%
September 15, 2016 $400,000
 6.300%
November 30, 2016 $500,000
 6.000%
November 30, 2016 $600,000
 6.700%
There2022, there were no issuances, repurchases, or redemptions of senior unsecured notes issuances for the nine months ended September 30, 2017 and the year ended December 31, 2016.notes.
Mortgage Debt
At September 30, 2017,March 31, 2023 and December 31, 2022, the Company had $139$344 millionand $345 million, respectively, in aggregate principal of mortgage debt outstanding, which iswas secured by 16 healthcare facilities (including redevelopment properties)15 MOBs and 3 CCRCs, with aan aggregate carrying value of $303 million. In$785 million and $793 million, respectively.
Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets, and is non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires insurance on the assets, and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets.
During each of the three months ended March 2017,31, 2023 and 2022, the Company paid off $472made aggregate principal repayments of mortgage debt of$1 million.
The Company has $142 million of mortgage debt.debt secured by a portfolio of 13 MOBs that matures in May 2026. In April 2022, the Company terminated its existing interest rate cap instruments associated with this variable rate mortgage debt and entered into two interest rate swap instruments that are designated as cash flow hedgesand mature in May 2026. In February 2023, the agreements associated with this variable rate mortgage debt were amended to change the interest rate benchmarks from LIBOR to SOFR, effective March 2023. Concurrently, the Company modified the related interest rate swap instruments to reflect the change in the interest rate benchmarks from LIBOR to SOFR (see Note 17). The variable rate mortgage debt associated with these interest rate swap instruments is reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument.
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Debt Maturities
The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at September 30, 2017 (inMarch 31, 2023 (dollars in thousands):
Year 
Bank Line of
Credit(1)
 
2015 Term Loan(2)
 
Senior
Unsecured
Notes(3)
 
Mortgage
Debt(4)
 
Total(5)
2017 (three months) $—
 $—
 $—
 $847
 $847
2018 605,837
 —
 —
 3,512
 609,349
2019 —
 226,680
 450,000
 3,700
 680,380
2020 —
 —
 800,000
 3,758
 803,758
2021 —
 —
 700,000
 11,117
 711,117
Thereafter —
 —
 4,500,000
 116,481
 4,616,481
  605,837
 226,680
 6,450,000
 139,415
 7,421,932
(Discounts), premium and debt costs, net —
 (475) (56,074) 6,002
 (50,547)
  $605,837
 $226,205
 $6,393,926
 $145,417
 $7,371,385
Senior Unsecured
Notes(2)
Mortgage
Debt(3)
YearBank Line 
of Credit
Commercial Paper(1)
Term LoansAmountInterest RateAmountInterest RateTotal
2023$— $— $— $— — %$88,765 3.80 %$88,765 
2024— — — — — %7,024 6.48 %7,024 
2025— — — 800,000 3.92 %3,209 3.82 %803,209 
2026— 556,000 — 650,000 3.40 %244,523 4.44 %1,450,523 
2027— — 500,000 450,000 1.54 %366 5.91 %950,366 
Thereafter— — — 3,200,000 3.74 %— — %3,200,000 
 — 556,000 500,000 5,100,000 343,887 6,499,887 
Premiums, (discounts), and debt issuance costs, net— — (3,832)(43,457)1,280 (46,009)
$— $556,000 $496,168 $5,056,543 $345,167 $6,453,878 

(1)Includes £105 million translated into U.S. dollars (“USD”). The Bank Line of Credit was terminated on October 19, 2017 and the Company executed a New Facility which matures in October 2021.
(2)Represents £169 million translated into USD.
(3)Effective interest rates on the notes ranged from 2.79% to 6.88% with a weighted average effective interest rate of 4.19% and a weighted average maturity of six years.
(4)Interest rates on the mortgage debt ranged from 2.01% to 5.91% with a weighted average effective interest rate of 4.19% and a weighted average maturity of 20 years.
(5)Excludes $95 million of other debt that have no scheduled maturities.

(1)Commercial Paper Program borrowings are backstopped by the Revolving Facility. As such, the Company calculates the weighted average remaining term of its Commercial Paper Program borrowings using the maturity date of the Revolving Facility.

(2)Effective interest rates on the senior unsecured notes range from 1.54% to 6.87% with a weighted average effective interest rate of 3.53% and a weighted average maturity of 6 years.
(3)Effective interest rates on the mortgage debt range from 3.44% to 8.52% with a weighted average effective interest rate of 4.31% and a weighted average maturity of 3 years. These interest rates include the impact of designated interest rate swap instruments, which effectively fix the interest rate on certain variable rate debt.
NOTE 11.10.  Commitments and Contingencies
Commitments
From October 31, 2016 through June 2017, HCP was the sole lender to QCP of an unsecured revolving credit facility (the “Unsecured Revolving Credit Facility”) which had a total commitment of $100 million at inception. The Unsecured Revolving Credit Facility was available to be drawn upon by QCP through October 31, 2017 with any drawn amounts due on October 31, 2018. Commitments under the Unsecured Revolving Credit Facility automatically and permanently decreased each calendar month by an amount equal to 50% of QCP’s and its restricted subsidiaries’ retained cash flow for the prior calendar month. All borrowings under the Unsecured Revolving Credit Facility were subject to the satisfaction of certain conditions, including (i) QCP’s senior secured revolving credit facility being unavailable, (ii) the failure of HCRMC to pay rent and (iii) other customary conditions, including the absence of a default and the accuracy of representations and warranties. QCP could only draw on the Unsecured Revolving Credit Facility prior to the one-year anniversary of the completion of the Spin-Off. Borrowings under the Unsecured Revolving Credit Facility would have born interest at a rate equal to LIBOR, subject to a 1.00% floor, plus an applicable margin of 6.25%. In addition to paying interest on outstanding principal under the Unsecured Revolving Credit Facility, QCP was required to pay a facility fee equal to 0.50% per annum of the unused capacity under the Unsecured Revolving Credit Facility to HCP, payable quarterly. No amounts were drawn on the Unsecured Revolving Credit Facility and the total commitment was reduced to zero at June 30, 2017.
Legal Proceedings
From time to time, the Company is a party to or has a significant relationship to, legal proceedings, lawsuits and other claims. Except as described below,claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations, or cash flows. The Company’s policy is to expense legal costs as they are incurred.
Class ActionDownREITs and Other Partnerships
On May 9, 2016,In connection with the formation of certain limited liability companies (“DownREITs”), members may contribute appreciated real estate to a purported stockholderDownREIT in exchange for DownREIT units. These contributions are generally tax-deferred, so that the pre-contribution gain related to the property is not taxed to the member. However, if a contributed property is later sold by the DownREIT, the unamortized pre-contribution gain that exists at the date of sale is specifically allocated and taxed to the contributing members. In many of the DownREITs, the Company filedhas entered into indemnification agreements with those members who contributed appreciated property into the DownREIT. Under these indemnification agreements, if any of the appreciated real estate contributed by the members is sold by the DownREIT in a putative class action complaint, Boynton Beach Firefighters’ Pension Fund v. HCP, Inc., et altaxable transaction within a specified number of years, the Company will reimburse the affected members for the federal and state income taxes associated with the pre-contribution gain that is specially allocated to the affected member under the Internal Revenue Code (“make-whole payments”)., Case No. 3:16-cv-01106-JJH, These make-whole payments include a tax gross-up provision. These indemnification agreements have expirations terms that range through 2039 on a total of 29 properties.
Additionally, the Company owns a 49% interest in the U.S. District CourtLife Science JV (see Note 7). If the property in the joint venture is sold in a taxable transaction, the Company is generally obligated to indemnify its joint venture partner for its federal and state income taxes associated with the gain that existed at the time of the contribution to the joint venture.
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NOTE 11.  Equity and Redeemable Noncontrolling Interests
Dividends
On April 27, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.30 per share. The common stock cash dividend will be paid on May 19, 2023 to stockholders of record as of the close of business on May 8, 2023.
During each of the three months ended March 31, 2023 and 2022, the Company declared and paid common stock cash dividends of $0.30 per share.
At-The-Market Equity Offering Program
In February 2023, in connection with the UPREIT reorganization, the Company terminated the previous at-the-market equity offering program (as amended from time to time, the “2020 ATM Program”) and established a new at-the-market equity offering program (the “2023 ATM Program” and, together with the 2020 ATM Program, the “ATM Programs”). The ATM Programs allow for the Northern Districtsale of Ohio againstshares of common stock having an aggregate gross sales price of up to $1.5 billion (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement (each, an “ATM forward contract”). The use of ATM forward contracts allows the Company to lock in a share price on the sale of shares at the time the ATM forward contract is effective, but defer receiving the proceeds from the sale of shares until a later date.
ATM forward contracts generally have a one to two year term. At any time during the term, the Company may settle a forward sale by delivery of physical shares of common stock to the forward seller or, at the Company’s election, in cash or net shares. The forward sale price the Company expects to receive upon settlement of outstanding ATM forward contracts will be the initial forward price established upon the effective date, subject to adjustments for: (i) accrued interest, (ii) the forward purchasers’ stock borrowing costs, and (iii) certain of its officers, HCRMC, and certain of its officers, asserting violationsfixed price reductions during the term of the federal securities laws. The suit asserts claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and alleges that the Company made certain false or misleading statements relating to the value of and risks concerning its investment in HCRMC by allegedly failing to disclose that HCRMC had engaged in billing fraud, as alleged by the U.S. Department of Justice in a pending suit against HCRMC arising from the False Claims Act. The plaintiff in the suit demands compensatory damages (in an unspecified amount), costs and expenses (including attorneys’ fees and expert fees), and equitable, injunctive, or other relief as the Court deems just and proper. As the Boynton Beach action is in its early stages and a lead plaintiff has not yet been named, the defendants have not yet responded to the complaint. The Company believes the suit to be without merit and intends to vigorously defend against it.ATM forward contract.
Derivative Actions
On June 16, 2016 and July 5, 2016, purported stockholders of the Company filed two derivative actions, respectively Subodh v. HCR ManorCare Inc., et al., Case No. 30-2016-00858497-CU-PT-CXC and Stearns v. HCR ManorCare, Inc., et al., Case No. 30-2016-00861646-CU-MC-CJC, in the Superior Court of California, County of Orange, against certain At March 31, 2023,$1.5 billionof the Company’s current and former directors and officers and HCRMC.common stock remained available for sale under the 2023 ATM Program.
ATM Forward Contracts
During the year ended December 31, 2021, the Company utilized the forward provisions under the 2020 ATM Program to allow for the sale of an aggregate of 9.1 million shares of its common stock at an initial weighted average net price of $35.25 per share, after commissions. The Company is named asdid not enter into any forward contracts under the 2020 ATM Program during the year ended December 31, 2022. In December 2022, the Company settled all 9.1 million shares previously outstanding under ATM forward contracts at a nominal defendant. As both derivative actions contained substantiallyweighted average net price of $34.01 per share, after commissions, resulting in net proceeds of $308 million. During the same allegations, they have been consolidated intothree months ended March 31, 2023, the Company did not utilize the forward provisions under the ATM Programs.
ATM Direct Issuances
During each of the three months ended March 31, 2023 and March 31, 2022, there were no direct issuances of shares of common stock under the ATM Programs.
Share Repurchase Program
On August 1, 2022, the Company’s Board of Directors approved a single action. The consolidated action alleges thatshare repurchase program under which the defendants engaged in various actsCompany may acquire shares of wrongdoing, including, among other things, breaching fiduciary duties by publicly making false or misleading statements of fact regarding HCRMC’s finances and prospects, and failing to maintain adequate internal controls. As the Subodh/Stearns action isits common stock in the early stages, defendants have not yet respondedopen market up to an aggregate purchase price of $500 million (the “Share Repurchase Program”). Purchases of common stock under the complaint. On April 18, 2017,Share Repurchase Program may be exercised at the Court approvedCompany’s discretion with the parties’ stipulation staying the action pending further developments,timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in the related securities class action litigation. The Court also adjourned the status conference scheduled for April 27, 2017 to January 10, 2018.
On April 10, 2017,August 2024 and may be suspended or terminated at any time without prior notice. Under Maryland General Corporation Law, outstanding shares of common stock acquired by a purported stockholder ofcorporation become authorized but unissued shares, which may be re-issued. In August 2022, the Company filedrepurchased 2.1 million shares of its common stock at a derivative action, Weldon v. Martin et al., Case No. 3:17-cv-755, in federal court inweighted average price of $27.16 per share for a total of $56 million. During the Northern District of Ohio, Western Division, against certainthree months ended March 31, 2023, there were no repurchases under the Share Repurchase Program. Therefore, at March 31, 2023, $444 million of the Company’s current and former directors and officers and HCRMC. The Company is named as a nominal defendant. The Weldon complaint asserts similar claims to those asserted incommon stock remained available for repurchase under the California derivative actions. In addition, the complaint asserts a claim under Section 14(a)Share Repurchase Program.
20
Table of the Exchange Act , alleging that the Company made false statements in its 2016 proxy statement by not disclosing that the Company’s performance issues in 2015 were the direct result of billing fraud at HCRMC. On April 18, 2017, the Court re-assigned and transferred this action to the judge presiding over the related federal securities class action. Defendants have not yet been served or responded to the complaint. On July 11, 2017, the Court approved a stipulation by the parties to stay the case pending disposition of the motion to dismiss the class action.Contents

On July 21, 2017, a purported stockholder of the Company filed another derivative action, Kelley v. HCR Manorcare, Inc., et al., Case No. 8:17-cv-01259, in federal court in the Central District of California, against certain of the Company’s current and former directors and officers and HCRMC. The Company is named as a nominal defendant. The Kelley complaint asserts similar claims to those asserted in Weldon and in the California derivative actions. Like Weldon, the Kelley complaint also additionally alleges that the Company made false statements in its 2016 proxy statement, and asserts a claim for a violation of Section 14(a) of the Exchange Act. The case is currently before Judge James V. Selna. On September 25, 2017, Defendants moved to transfer the action to the Northern District of Ohio (i.e., the court where the class action and other federal derivative action are pending) or, in the alternative, to stay the action.  Oral argument is currently scheduled for December 4, 2017. Judge Selna granted the Company’s joint stipulation to stay the time to respond to the complaint until 60 days after the transfer or stay motion is decided.
Welltower v. Scott M. Brinker
On May 15, 2017, Welltower, Inc. filed a complaint in the Court of Common Pleas in Lucas County, Ohio, against Scott M. Brinker, alleging that he violated his non-competition obligations to Welltower prior to and upon acceptance of an offer of employment with the Company. In connection with Mr. Brinker’s hiring, the Company agreed to indemnify him for legal fees and any losses that result from the action. The matter is scheduled to be heard the week of November 6, 2017. The Company believes the suit to be without merit.
The Company is unable to estimate the amount of loss or range of reasonably possible losses with respect to the matters discussed above at September 30, 2017.
NOTE 12.  Equity
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the Company’s accumulated other comprehensive income (loss) (in thousands):
 September 30,
2017		 December 31,
2016
Cumulative foreign currency translation adjustment$(8,455) $(22,817)
Unrealized gains (losses) on cash flow hedges, net(13,073) (3,642)
Supplemental Executive Retirement plan minimum liability(2,907) (3,129)
Unrealized gains (losses) on available for sale securities(56) (54)
Total other comprehensive income (loss)$(24,491) $(29,642)

NOTE 13.  Segment Disclosures
 March 31,
2023		December 31,
2022
Unrealized gains (losses) on derivatives, net$20,668 $30,145 
Supplemental Executive Retirement Plan minimum liability(1,947)(2,011)
Total accumulated other comprehensive income (loss)$18,721 $28,134 
The Company evaluates its business and allocates resourceshas a defined benefit pension plan, known as the Supplemental Executive Retirement Plan, with one plan participant, a former Chief Executive Officer (“CEO”) of the Company who departed in 2003. Changes to the Supplemental Executive Retirement Plan minimum liability are reflected in other comprehensive income (loss).
Noncontrolling Interests
Redeemable Noncontrolling Interests
Arrangements with noncontrolling interest holders are assessed for appropriate balance sheet classification based on its reportable business segments: (i) senior housing triple-net, (ii) SHOP, (iii) life sciencethe redemption and (iv) medical office. Underother rights held by the medical office and life science segments, the Company invests through the acquisition and development of medical office buildings (“MOBs”) and life science facilities, which generally require a greater level of property management. The Company’s senior housing facilities are managed utilizing triple-net leases and RIDEA structures. The Company has non-reportable segments that are comprised primarilynoncontrolling interest holder. Certain of the Company’s debt investments, hospital propertiesnoncontrolling interest holders have the ability to put their equity interests to the Company upon specified events or after the passage of a predetermined period of time. Each put option is payable in cash and care homessubject to increases in redemption value in the United Kingdom (“U.K.”). The accounting policies ofevent that the segments areunderlying property generates specified returns for the same as those in Note 2Company and meets certain promote thresholds pursuant to the Consolidated Financial Statements inrespective agreements. Accordingly, the Company’s 2016 Annual Report on Form 10-K filed withCompany records redeemable noncontrolling interests outside of permanent equity and presents the SEC, as updated by Note 2 herein. redeemable noncontrolling interests at the greater of their carrying amount or redemption value at the end of each reporting period.
During the year ended December 31, 2016, 17 senior housing triple-net facilities2022, one of the redeemable noncontrolling interests met the conditions for redemption, but was not yet exercised as of March 31, 2023. The three remaining redeemable noncontrolling interests had not yet met the conditions for redemption as of March 31, 2023 or December 31, 2022. Two of the interests will become redeemable following the passage of a predetermined amount of time, which will occur during 2023 and 2024. The third interest will become redeemable at the earlier of a predetermined passage of time or stabilization of the underlying development property, which is expected to occur in 2024. The redemption values are subject to change based on the assessment of redemption value at each redemption date.
Healthpeak OP
Immediately following the Reorganization, Healthpeak Properties, Inc. was the initial sole member and 100% owner of Healthpeak OP. Subsequent to the Reorganization, certain employees of the Company (“OP Unitholders”) were transitionedissued noncontrolling, non-managing member units in Healthpeak OP (“OP Units”). As of March 31, 2023, Healthpeak Properties, Inc. owned 99.6% of Healthpeak OP, with the OP Unitholders owning the remaining 0.4%. When certain conditions are met, the OP Unitholders have the right to a RIDEA structure (reported inrequire redemption of part or all of their OP Units for cash or shares of the Company’s SHOP segment). Duringcommon stock, at the nine months ended September 30, 2017, four senior housing triple-net facilities were transferredCompany’s option as managing member of Healthpeak OP. The per unit redemption amount is equal to either one share of the Company’s common stock or cash equal to the fair value of a share of common stock at the time of redemption. The Company classifies the OP Units in permanent equity because it may elect, in its sole discretion, to issue shares of its common stock to OP Unitholders who choose to redeem their OP Units rather than using cash. None of the outstanding OP Units met the criteria for redemption as of March 31, 2023.
DownREITs
The non-managing member units of the Company’s SHOP segment,DownREITs are exchangeable for an amount of cash approximating the then-current market value of shares of the Company’s common stock or, at the Company’s option, shares of the Company’s common stock (subject to certain adjustments, such as stock splits and reclassifications). Upon exchange of DownREIT units for the Company’s common stock, the carrying amount of the DownREIT units is reclassified to stockholders’ equity. At March 31, 2023, there werefive millionDownREIT units (seven millionshares of Healthpeak common stock are issuable upon conversion) outstanding insevenDownREIT LLCs, for all of which one was transitioned to a RIDEA structure. Thethe Company evaluates performance based upon: (i) property net operating income from continuing operations (“NOI”)acts as the managing member. At March 31, 2023, the carrying and (ii) Adjusted NOImarket values of the combined consolidatedfive millionDownREIT units were$200 million and unconsolidated investments in each segment. NOI$160 million, respectively. At December 31, 2022, the carrying and market values of the five million DownREIT units were$200 million and $183 million, respectively.
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Table of Contents
NOTE 12.  Earnings Per Common Share
Basic income (loss) per common share (“EPS”) is defined as rental and related revenues, including tenant recoveries, resident fees and services, andcomputed based on the weighted average number of common shares outstanding. Diluted income from DFLs, less property level operating expenses. Adjusted NOI(loss) per common share is calculated as NOI after eliminatingcomputed based on the effectsweighted average number of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, non-refundable entrance fees, net of entrance fee amortization and lease termination fees andcommon shares outstanding plus the impact of deferred community fee incomeforward equity sales agreements using the treasury stock method, common shares issuable from the assumed conversion of DownREIT units, stock options, certain performance restricted stock units, and expense. The adjustments to NOI and resulting Adjusted NOI for SHOP have been restated for prior periods presented to conform to the current period presentation for the adjustment to exclude theunvested restricted stock units. Only those instruments having a dilutive impact of deferred community fee income and expense, resulting in recognition as cash is received and expenses are paid.
Non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities and, if any, real estate held for sale. Interest expense, depreciation and amortization, and non-property specific revenues and expenses are not allocated to individual segments in evaluatingon the Company’s segment-level performance. See Note 17 for other information regarding concentrations of credit risk.

The following tables summarize information for the reportable segments (in thousands):
For the three months ended September 30, 2017:
  Senior Housing Triple-Net SHOP Life Science Medical Office Other Non-reportable Corporate Non-segment Total
Rental revenues(1)
 $77,220
 $126,040
 $90,174
 $119,847
 $28,968
 $—
 $442,249
HCP share of unconsolidated JV revenues —
 81,936
 2,031
 496
 421
 —
 84,884
Operating expenses (934) (86,821) (19,960) (46,486) (1,137) —
 (155,338)
HCP share of unconsolidated JV operating expenses —
 (65,035) (433) (143) (20) —
 (65,631)
NOI 76,286
 56,120
 71,812
 73,714
 28,232
 —
 306,164
Adjustments to NOI(2)
 (600) 4,551
 (751) (582) (1,283) —
 1,335
Adjusted NOI 75,686
 60,671
 71,061
 73,132
 26,949
 —
 307,499
Addback adjustments 600
 (4,551) 751
 582
 1,283
 —
 (1,335)
Interest income —
 —
 —
 —
 11,774
 —
 11,774
Interest expense (640) (933) (87) (126) (618) (68,924) (71,328)
Depreciation and amortization (25,547) (24,884) (30,851) (42,047) (7,259) —
 (130,588)
General and administrative —
 —
 —
 —
 —
 (23,523) (23,523)
Acquisition and pursuit costs —
 —
 —
 —
 —
 (580) (580)
Recoveries (impairments), net —
 —
 —
 —
 (25,328) —
 (25,328)
Gain (loss) on sales of real estate, net (6) 5,180
 8
 —
 —
 —
 5,182
Loss on debt extinguishments —
 —
 —
 —
 —
 (54,227) (54,227)
Other income (expense), net —
 —
 —
 —
 —
 (10,556) (10,556)
Income tax benefit (expense) —
 —
 —
 —
 —
 5,481
 5,481
Less: HCP share of unconsolidated JV NOI —
 (16,901) (1,598) (353) (401) —
 (19,253)
Equity income (loss) from unconsolidated JVs —
 (245) 789
 274
 244
 —
 1,062
Net income (loss) $50,093
 $18,337
 $40,073
 $31,462
 $6,644
 $(152,329) $(5,720)

(1)Represents rental and related revenues, tenant recoveries, resident fees and services, and income from DFLs.
(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.


For the three months ended September 30, 2016:
  Senior Housing Triple-Net SHOP Life Science Medical Office Other Non-reportable Corporate Non-segment Total
Rental revenues(1)
 $104,262
 $170,739
 $90,847
 $113,653
 $30,574
 $—
 $510,075
HCP share of unconsolidated JV revenues —
 50,973
 1,929
 502
 410
 —
 53,814
Operating expenses (1,794) (121,502) (18,487) (44,738) (1,193) —
 (187,714)
HCP share of unconsolidated JV operating expenses —
 (42,463) (406) (148) (20) —
 (43,037)
NOI 102,468
 57,747
 73,883
 69,269
 29,771
 —
 333,138
Adjustments to NOI(2)
 (1,003) 4,081
 (314) (814) (1,140) —
 810
Adjusted NOI 101,465
 61,828
 73,569
 68,455
 28,631
 —
 333,948
Addback adjustments 1,003
 (4,081) 314
 814
 1,140
 —
 (810)
Interest income —
 —
 —
 —
 20,482
 —
 20,482
Interest expense (644) (8,130) (634) (1,608) (2,260) (104,584) (117,860)
Depreciation and amortization (34,030) (26,837) (31,967) (41,111) (7,462) —
 (141,407)
General and administrative —
 —
 —
 —
 —
 (34,781) (34,781)
Acquisition and pursuit costs —
 —
 —
 —
 —
 (2,763) (2,763)
Gain (loss) on sales of real estate, net —
 —
 —
 (9) —
 —
 (9)
Other income (expense), net —
 —
 —
 —
 —
 1,432
 1,432
Income tax benefit (expense) —
 —
 —
 —
 —
 424
 424
Less: HCP share of unconsolidated JV NOI —
 (8,510) (1,523) (354) (390) —
 (10,777)
Equity income (loss) from unconsolidated JVs —
 (3,517) 778
 462
 224
 —
 (2,053)
Discontinued operations —
 —
 —
 —
 —
 108,213
 108,213
Net income (loss) $67,794
 $10,753
 $40,537
 $26,649
 $40,365
 $(32,059) $154,039

(1)Represents rental and related revenues, tenant recoveries, resident fees and services, and income from DFLs.
(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.


For the nine months ended September 30, 2017:
  Senior Housing Triple-Net SHOP Life Science Medical Office Other Non-reportable Corporate Non-segment Total
Rental revenues(1)
 $255,332
 $391,684
 $262,224
 $357,381
 $87,524
 $—
 $1,354,145
HCP share of unconsolidated JV revenues —
 239,667
 5,975
 1,481
 1,256
 —
 248,379
Operating expenses (2,927) (267,226) (56,024) (137,930) (3,475) —
 (467,582)
HCP share of unconsolidated JV operating expenses —
 (190,049) (1,234) (431) (58) —
 (191,772)
NOI 252,405
 174,076
 210,941
 220,501
 85,247
 —
 943,170
Adjustments to NOI(2)
 (2,844) 12,229
 (1,094) (2,321) (3,164) —
 2,806
Adjusted NOI 249,561
 186,305
 209,847
 218,180
 82,083
 —
 945,976
Addback adjustments 2,844
 (12,229) 1,094
 2,321
 3,164
 —
 (2,806)
Interest income —
 —
 —
 —
 50,974
 —
 50,974
Interest expense (1,898) (6,950) (288) (382) (3,541) (222,775) (235,834)
Depreciation and amortization (77,478) (75,657) (95,648) (127,261) (21,849) —
 (397,893)
General and administrative —
 —
 —
 —
 —
 (67,287) (67,287)
Acquisition and pursuit costs —
 —
 —
 —
 —
 (2,504) (2,504)
Recoveries (impairments), net —
 —
 —
 —
 (82,010) —
 (82,010)
Gain (loss) on sales of real estate, net 268,227
 5,313
 45,922
 (406) 3,796
 —
 322,852
Loss on debt extinguishments —
 —
 —
 —
 —
 (54,227) (54,227)
Other income (expense), net —
 —
 —
 —
 —
 40,723
 40,723
Income tax benefit (expense) —
 —
 —
 —
 —
 14,630
 14,630
Less: HCP share of unconsolidated JV NOI —
 (49,618) (4,741) (1,050) (1,198) —
 (56,607)
Equity income (loss) from unconsolidated JVs —
 683
 2,322
 846
 720
 —
 4,571
Net income (loss) $441,256
 $47,847
 $158,508
 $92,248
 $32,139
 $(291,440) $480,558

(1)Represents rental and related revenues, tenant recoveries, resident fees and services, and income from DFLs.
(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.


For the nine months ended September 30, 2016:
  Senior Housing Triple-Net SHOP Life Science Medical Office Other Non-reportable Corporate Non-segment Total
Rental revenues(1)
 $319,989
 $500,704
 $269,994
 $331,881
 $95,483
 $—
 $1,518,051
HCP share of unconsolidated JV revenues —
 152,424
 5,628
 1,503
 1,224
 —
 160,779
Operating expenses (5,521) (350,949) (53,191) (129,715) (3,375) —
 (542,751)
HCP share of unconsolidated JV operating expenses —
 (125,244) (1,173) (452) (30) —
 (126,899)
NOI 314,468
 176,935
 221,258
 203,217
 93,302
 —
 1,009,180
Adjustments to NOI(2)
 (8,464) 14,648
 (1,545) (2,361) (1,926) —
 352
Adjusted NOI 306,004
 191,583
 219,713
 200,856
 91,376
 —
 1,009,532
Addback adjustments 8,464
 (14,648) 1,545
 2,361
 1,926
 —
 (352)
Interest income —
 —
 —
 —
 71,298
 —
 71,298
Interest expense (8,859) (23,818) (1,904) (4,899) (7,067) (314,708) (361,255)
Depreciation and amortization (101,737) (78,124) (97,640) (120,432) (23,248) —
 (421,181)
General and administrative —
 —
 —
 —
 —
 (83,011) (83,011)
Acquisition and pursuit costs —
 —
 —
 —
 —
 (6,061) (6,061)
Gain (loss) on sales of real estate, net 23,940
 —
 29,428
 8,333
 57,904
 —
 119,605
Other income (expense), net —
 —
 —
 —
 —
 5,064
 5,064
Income tax benefit (expense) —
 —
 —
 —
 —
 (1,101) (1,101)
Less: HCP share of unconsolidated JV NOI —
 (27,180) (4,455) (1,051) (1,194) —
 (33,880)
Equity income (loss) from unconsolidated JVs —
 (8,477) 2,263
 1,541
 645
 —
 (4,028)
Discontinued operations —
 —
 —
 —
 —
 283,996
 283,996
Net income (loss) $227,812
 $39,336
 $148,950
 $86,709
 $191,640
 $(115,821) $578,626

(1)Represents rental and related revenues, tenant recoveries, resident fees and services, and income from DFLs.
(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.
The following table summarizes the Company’s revenues by segment (in thousands):
  Three Months Ended September 30, Nine Months Ended September 30,
Segment 2017 2016 2017 2016
Senior housing triple-net $77,220
 $104,262
 $255,332
 $319,989
SHOP 126,040
 170,739
 391,684
 500,704
Life science 90,174
 90,847
 262,224
 269,994
Medical office 119,847
 113,653
 357,381
 331,881
Other non-reportable segments 40,742
 51,056
 138,498
 166,781
Total revenues $454,023
 $530,557
 $1,405,119
 $1,589,349
See Notes 3 and 4 for significant transactions impacting the Company’s segment assetsbasic income (loss) per share are included in diluted income (loss) per share during the periods presented.

NOTE 14.  Earnings Per Common Share
Restricted stock and certain performanceCertain restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, and require use of the two-class method when computing basic and diluted earnings per share.
ForRefer to Note 11 for a discussion of the sale of shares under and settlement of forward sales agreements during the periods presented. The Company considered the potential dilution resulting from the forward agreements to the calculation of earnings per share. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. However, the Company uses the treasury stock method to calculate the dilution, if any, resulting from the forward sales agreements during the period of time prior to settlement. The aggregate effect on the Company’s diluted weighted-average common shares for each of the three months ended September 30, 2017, diluted loss per shareMarch 31, 2023 and 2022 waszeroweighted-average incremental shares from continuing operations is calculated using the weighted-average common shares outstanding during the period, as the effect of shares issuable under employee compensation plans and upon DownREIT unit conversions would have been anti-dilutive. All DownREIT units and approximately 1 million stock options were anti-dilutive for all periods presented.
Additionally, during the three months ended September 30, 2016, 6 million shares, issuable upon conversion of 4 million DownREIT units, were not included because they are anti-dilutive. For the nine months ended September 30, 2017 and 2016, 7 million and 6 million shares, respectively, issuable upon conversion of 4 million and 4 million DownREIT units, were not included because they are anti-dilutive.forward equity sales agreements. 
The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):
 Three Months Ended
March 31,
 20232022
Numerator
Income (loss) from continuing operations$134,507 $75,026 
Noncontrolling interests' share in continuing operations(15,555)(3,730)
Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.118,952 71,296 
Less: Participating securities' share in continuing operations(1,254)(1,976)
Income (loss) from continuing operations applicable to common shares117,698 69,320 
Income (loss) from discontinued operations— 317 
Net income (loss) applicable to common shares - basic and diluted$117,698 $69,637 
Denominator  
Basic weighted average shares outstanding546,842 539,352 
Dilutive potential common shares - equity awards(1)
268 234 
Diluted weighted average common shares547,110 539,586 
Basic earnings (loss) per common share
Continuing operations$0.22 $0.13 
Discontinued operations— 0.00 
Net income (loss) applicable to common shares$0.22 $0.13 
Diluted earnings (loss) per common share  
Continuing operations$0.22 $0.13 
Discontinued operations— 0.00 
Net income (loss) applicable to common shares$0.22 $0.13 

(1)For all periods presented, represents the dilutive impact of 1 million outstanding equity awards (restricted stock units and stock options).
For the three months ended March 31, 2023, forward equity sales agreements had no dilutive impact as no shares were outstanding under ATM forward contracts during the period. For the three months ended March 31, 2022, the 9.1 million shares under forward equity sales agreements that had not been settled during the three months then ended were anti-dilutive.
For the three months ended March 31, 2023 and 2022, all 7 million shares issuable upon conversion of DownREIT units were not included because they were anti-dilutive.
22
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Numerator       
Net income (loss) from continuing operations$(5,720) $45,826
 $480,558
 $294,630
Noncontrolling interests' share in earnings(1,937) (2,789) (7,687) (9,540)
Net income (loss) attributable to HCP, Inc.(7,657) 43,037
 472,871
 285,090
Less: Participating securities' share in earnings(131) (326) (560) (977)
Income (loss) from continuing operations applicable to common shares(7,788) 42,711
 472,311
 284,113
Discontinued operations—
 108,213
 —
 283,996
Net income (loss) applicable to common shares$(7,788) $150,924
 $472,311
 $568,109

       
Denominator 
  
    
Basic weighted average shares outstanding468,975
 467,628
 468,642
 466,931
Dilutive potential common shares - equity awards—
 207
 186
 201
Diluted weighted average common shares468,975
 467,835
 468,828
 467,132
Basic earnings per common share       
Continuing operations$(0.02) $0.09
 $1.01
 $0.61
Discontinued operations—
 0.23
 —
 0.61
Net income (loss) applicable to common shares$(0.02) $0.32
 $1.01
 $1.22
Diluted earnings per common share 
  
    
Continuing operations$(0.02) $0.09
 $1.01
 $0.61
Discontinued operations—
 0.23
 —
 0.61
Net income (loss) applicable to common shares$(0.02) $0.32
 $1.01
 $1.22
Table of Contents

NOTE 13.  Segment Disclosures

The Company’s reportable segments, based on how its chief operating decision maker (“CODM”) evaluates the business and allocates resources, are as follows: (i) life science, (ii) medical office, and (iii) CCRC. The Company has non-reportable segments that are comprised primarily of the Company’s interests in an unconsolidated JV that owns 19 senior housing assets (the “SWF SH JV”), loans receivable, and marketable debt securities. These non-reportable segments have been presented on an aggregate basis within the Notes to the Consolidated Financial Statements herein. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC, as updated by Note 2 herein.
The Company evaluates performance based on property Adjusted NOI. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, income from direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses; NOI excludes all other financial statement amounts included in net income (loss). Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense.
NOI and Adjusted NOI are non-GAAP supplemental measures that are calculated as NOI and Adjusted NOI from consolidated properties, plus the Company’s share of NOI and Adjusted NOI from unconsolidated joint ventures (calculated by applying the Company’s actual ownership percentage for the period), less noncontrolling interests’ share of NOI and Adjusted NOI from consolidated joint ventures (calculated by applying the Company’s actual ownership percentage for the period). Management utilizes its share of NOI and Adjusted NOI in assessing its performance as the Company has various joint ventures that contribute to its performance. The Company does not control its unconsolidated joint ventures, and the Company’s share of amounts from unconsolidated joint ventures do not represent the Company’s legal claim to such items. The Company’s share of NOI and Adjusted NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP. Management believes that Adjusted NOI is an important supplemental measure because it provides relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and presenting it on an unlevered basis. Additionally, management believes that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as alternative measures of operating performance to net income (loss) as defined by GAAP since they do not reflect various excluded items.
Non-segment assets consist of assets in the Company’s other non-reportable segments and corporate non-segment assets. Corporate non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, loans receivable, marketable debt securities, other assets, real estate assets held for sale and discontinued operations, and liabilities related to assets held for sale.
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The following tables summarize information for the reportable segments (in thousands):
For the three months ended March 31, 2023:
Life ScienceMedical OfficeCCRCOther Non-reportableCorporate Non-segmentTotal
Total revenues$205,464 $186,967 $127,084 $6,163 $— $525,678 
Government grant income(1)
— — 137 — — 137 
Less: Interest income— — — (6,163)— (6,163)
Healthpeak’s share of unconsolidated joint venture total revenues2,165 745 — 20,346 — 23,256 
Healthpeak’s share of unconsolidated joint venture government grant income— — — 228 — 228 
Noncontrolling interests’ share of consolidated joint venture total revenues(143)(8,963)— — — (9,106)
Operating expenses(57,566)(64,398)(101,124)— — (223,088)
Healthpeak’s share of unconsolidated joint venture operating expenses(1,182)(305)— (15,006)— (16,493)
Noncontrolling interests’ share of consolidated joint venture operating expenses40 2,595 — — — 2,635 
Adjustments to NOI(2)
(832)(3,821)50 (21)— (4,624)
Adjusted NOI147,946 112,820 26,147 5,547 — 292,460 
Plus: Adjustments to NOI(2)
832 3,821 (50)21 — 4,624 
Interest income— — — 6,163 — 6,163 
Interest expense— (1,920)(1,816)— (44,227)(47,963)
Depreciation and amortization(75,582)(71,158)(32,485)— — (179,225)
General and administrative— — — — (24,547)(24,547)
Transaction costs(158)(132)(219)— (1,916)(2,425)
Impairments and loan loss reserves, net— — — 2,213 — 2,213 
Gain (loss) on sales of real estate, net60,498 21,312 — (232)— 81,578 
Other income (expense), net4 204 (667)— 1,231 772 
Less: Government grant income— — (137)— — (137)
Less: Healthpeak’s share of unconsolidated joint venture NOI(983)(440)— (5,568)— (6,991)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI103 6,368 — — — 6,471 
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures132,660 70,875 (9,227)8,144 (69,459)132,993 
Income tax benefit (expense)— — — — (302)(302)
Equity income (loss) from unconsolidated joint ventures598 189 — 1,029 — 1,816 
Income (loss) from continuing operations133,258 71,064 (9,227)9,173 (69,761)134,507 
Income (loss) from discontinued operations— — — — — — 
Net income (loss)$133,258 $71,064 $(9,227)$9,173 $(69,761)$134,507 

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).
(2)Represents straight-line rents, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.


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For the three months ended March 31, 2022:
 Life ScienceMedical OfficeCCRCOther Non-reportableCorporate Non-segmentTotal
Total revenues$194,055 $177,263 $121,560 $5,494 $— $498,372 
Government grant income(1)
— — 6,552 — — 6,552 
Less: Interest income— — — (5,494)— (5,494)
Healthpeak’s share of unconsolidated joint venture total revenues1,431 732 — 18,045 — 20,208 
Healthpeak’s share of unconsolidated joint venture government grant income— — 333 315 — 648 
Noncontrolling interests’ share of consolidated joint venture total revenues(57)(8,820)— — — (8,877)
Operating expenses(48,189)(61,170)(97,888)— — (207,247)
Healthpeak’s share of unconsolidated joint venture operating expenses(483)(299)— (14,055)— (14,837)
Noncontrolling interests’ share of consolidated joint venture operating expenses19 2,602 — — — 2,621 
Adjustments to NOI(2)
(14,112)(3,546)— (8)— (17,666)
Adjusted NOI132,664 106,762 30,557 4,297 — 274,280 
Plus: Adjustments to NOI(2)
14,112 3,546 — 8 — 17,666 
Interest income— — — 5,494 — 5,494 
Interest expense— (1,036)(1,865)— (34,685)(37,586)
Depreciation and amortization(78,138)(67,773)(31,822)— — (177,733)
General and administrative— — — — (23,831)(23,831)
Transaction costs(292)(4)— — — (296)
Impairments and loan loss reserves, net— — — (132)— (132)
Gain (loss) on sales of real estate, net3,856 — — — — 3,856 
Other income (expense), net(9)10,937 6,511 (32)909 18,316 
Less: Government grant income— — (6,552)— — (6,552)
Less: Healthpeak’s share of unconsolidated joint venture NOI(948)(433)(333)(4,305)— (6,019)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI38 6,218 — — — 6,256 
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures71,283 58,217 (3,504)5,330 (57,607)73,719 
Income tax benefit (expense)— — — — (777)(777)
Equity income (loss) from unconsolidated joint ventures966 200 539 379 — 2,084 
Income (loss) from continuing operations72,249 58,417 (2,965)5,709 (58,384)75,026 
Income (loss) from discontinued operations— — — — 317 317 
Net income (loss)$72,249 $58,417 $(2,965)$5,709 $(58,067)$75,343 

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).
(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.
See Notes 3, 4, 5, 6, 7, and 15 for significant transactions impacting the Company’s segment assets during the periods presented.

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Table of Contents
NOTE 15.14.  Supplemental Cash Flow Information
The following table provides supplemental cash flow information (in thousands):
Nine Months Ended September 30, Three Months Ended March 31,
2017 2016 20232022
Supplemental cash flow information: 
  
Supplemental cash flow information:  
Interest paid, net of capitalized interest$261,799
 $401,628
Interest paid, net of capitalized interest$65,367 $58,487 
Income taxes paid9,897
 5,734
Income taxes paid (refunded)Income taxes paid (refunded)160 (1,947)
Capitalized interest12,607
 8,490
Capitalized interest14,093 8,305 
Supplemental schedule of non-cash investing and financing activities:   Supplemental schedule of non-cash investing and financing activities:
Increase in ROU asset in exchange for new lease liability related to operating leasesIncrease in ROU asset in exchange for new lease liability related to operating leases80 179 
Accrued construction costs63,515
 60,897
Accrued construction costs161,774 163,277 
Non-cash acquisitions and dispositions settled with receivables and restricted cash held in connection with Section 1031 transactions—
 15,570
Vesting of restricted stock units and conversion of non-managing member units into common stock2,464
 6,620
Mortgages and other liabilities assumed with real estate acquisitions3,678
 78,131
Unrealized gains (losses) on available-for-sale securities and derivatives designated as cash flow hedges, net(56) 1,531
Operating, investing, and financing cash flows in the Consolidated Statements of Cash Flows are reported inclusive of both cash flows from continuing operations and cash flows from discontinued operations. The following table summarizes certain cash flow information related to discontinued operations (in thousands):
Three Months Ended March 31,
20232022
Leasing costs, tenant improvements, and recurring capital expenditures$— $18 
Development, redevelopment, and other major improvements of real estate— — 
Depreciation and amortization of real estate, in-place lease, and other intangibles— — 
The following table summarizes cash, cash equivalents, and restricted cash (in thousands):
Three Months Ended March 31,
202320222023202220232022
Continuing operationsDiscontinued operationsTotal
Beginning of period:
Cash and cash equivalents$72,032 $158,287 $— $7,707 $72,032 $165,994 
Restricted cash54,802 53,454 — — 54,802 53,454 
Cash, cash equivalents, and restricted cash$126,834 $211,741 $— $7,707 $126,834 $219,448 
End of period:
Cash and cash equivalents$59,235 $89,066 $— $7,989 $59,235 $97,055 
Restricted cash57,990 52,103 — — 57,990 52,103 
Cash, cash equivalents, and restricted cash$117,225 $141,169 $— $7,989 $117,225 $149,158 
Cash and Cash Equivalents
The Company maintains its cash and cash equivalents at financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. However, as the account balances at certain institutions exceed the FDIC insurance coverage, there is a concentration of credit risk related to amounts in excess of such coverage.
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Table of Contents
NOTE 16.15.  Variable Interest Entities
Operating Subsidiary
In February 2023, in connection with the UPREIT reorganization, Old Healthpeak converted to Healthpeak OP, which is the Company’s operating subsidiary and a limited liability company that has governing provisions that are the functional equivalent of a limited partnership. The Company holds a membership interest in Healthpeak OP, acts as the managing member of Healthpeak OP, and exercises full responsibility, discretion, and control over the day-to-day management of Healthpeak OP. Because the noncontrolling interests in Healthpeak OP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights, we have determined that Healthpeak OP is a VIE. The Company, as managing member, has the power to direct the core activities of Healthpeak OP that most significantly affect Healthpeak OP’s performance, and through its interest in Healthpeak OP, has both the right to receive benefits from and the obligation to absorb losses of Healthpeak OP. Accordingly, the Company is the primary beneficiary of Healthpeak OP and consolidates Healthpeak OP. As the Company conducts its business and holds its assets and liabilities through Healthpeak OP, the total consolidated assets and liabilities, income (losses), and cash flows of Healthpeak OP represent substantially all of the total consolidated assets and liabilities, income (losses), and cash flows of the Company.
Unconsolidated Variable Interest Entities
At September 30, 2017,March 31, 2023, the Company had investments in two unconsolidated VIE joint ventures. At December 31, 2022, the Company had investments in: (i) fivetwo unconsolidated VIE JVs,joint ventures and (ii) 48 properties leased to VIE tenants, (iii) marketable debt securities of one VIE and (iv) three loans to VIE borrowers.VIE. The Company has determined that it is not the primary beneficiary of and therefore does not consolidate these VIEs because it does not have the ability to control the activities that most significantly impact their economic performance. Except for the Company’s equity interest in the unconsolidated JVs (CCRC OpCo, RIDEA II PropCo, Vintage Park Development JV, Waldwick JV and thejoint ventures (the LLC investment and Needham Land Parcel JV discussed below), it has no formal involvement in these VIEs beyond its investments.
TheDebt Securities Investment. At December 31, 2022, the Company holdsheld $22 million of commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (commonly referred to as Freddie Mac) through a 49% ownership interest in CCRC OpCo, a joint venturespecial purpose entity formed in August 2014 that operates senior housing properties in a RIDEA structure and hashad been identified as a VIE (see Note 7).because it was “thinly capitalized.” The equity members of CCRC OpCo “lack power” because they share certain operating rights with Brookdale, as manager of the CCRCs. The assets of CCRC OpCo primarily consist of the CCRCs that it owns and leases, resident fees receivable, notes receivable, and cash and cash equivalents; its obligations primarily consist of operating lease obligations to CCRC PropCo, debt service payments and capital expenditures for the properties, and accounts payable and expense accruals associated with the cost of its CCRCs’ operations. Assets generatedCMBS issued by the CCRC operations (primarily rents from CCRC residents) of CCRC OpCo may only be used to settle its contractualVIE were backed by mortgage debt obligations (primarily from debt service payments, capital expenditures, and rental costs and operating expenses incurred to manage such facilities).
In January 2017,on real estate assets. These securities were classified as a result of the partial sale of its interest in RIDEA II,held-to-maturity because the Company concluded that it should deconsolidate RIDEA II as it is no longerhad the primary beneficiary ofintent and ability to hold the joint venture. The HCP/CPA JV is the primary beneficiary of both RIDEA II PropCosecurities until maturity. These securities matured on December 31, 2022, and RIDEA II OpCo as it controls the significant activities of RIDEA II PropCo and, of the group that controls the significant activities of RIDEA II OpCo, is most closely associated to the entity. Furthermore, control over the HCP/CPA JV is shared between HCP and CPA, and as such, the Company does not consolidatereceived the HCP/CPA JV. Subsequent to the partial sale of its interestrelated proceeds in RIDEA II, the Company continues to hold a direct investment in RIDEA II PropCo, which has been identified as a VIE as Brookdale, the non-managing member, does not have any substantive participating rights or kick-out rights over the managing member, HCP/CPA PropCo (see Notes 4 and 7). The assets of RIDEA II PropCo primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of a combination of third-party and HCP debt (see Note 4). Assets generated by RIDEA II PropCo (primarily from RIDEA II OpCo lease payments) may only be used to settle its contractual obligations (primarily debt service payments on the third-party and HCP debt).January 2023.
The Company holds an 85% ownership interest in two development joint ventures (Vintage Park Development JV and Waldwick JV) (see Note 7), which have been identified as VIEs as power is shared with a member that does not have a substantive equity investment at risk. The assets of each joint venture primarily consist of an in-progress senior housing facility development project that it owns and cash and cash equivalents; its obligations primarily consist of accounts payable and expense accruals associated

with the cost of its development obligations. Any assets generated by each joint venture may only be used to settle its respective contractual obligations (primarily development expenses and debt service payments).
LLC Investment.The Company holds a limited partner ownership interest in an unconsolidated LLC that has been identified as a VIE. The Company’s involvement in the entity is limited to its equity investment as a limited partner and it does not have any substantive participating rights or kick-out rights over the general partner. The assets and liabilities of the entity primarily consist of those associated with itsthree hospitals as well as senior housing real estate. Any assets generated by the entity may only be used to settle its contractual obligations (primarily capital expenditures and debt service payments).
Needham Land Parcel JV. In December 2021, the Company acquired a 38% interest in a life science development joint venture in Needham, Massachusetts for $13 million. Current equity at risk is not sufficient to finance the joint venture’s activities. The assets and liabilities of the entity primarily consist of real estate and development activities.debt service obligations. Any assets generated by the entity may only be used to settle its contractual obligations (primarily development expensescosts and debt service payments).
The Company leases 48 properties to a total See Note 7 for additional descriptions of seven tenants that have also been identified as VIEs (“VIE tenants”). These VIE tenants are “thinly capitalized” entities that rely on the nature, purpose, and operating cash flows generated from the senior housing facilities to pay operating expenses, including the rent obligations under their leases.
The Company holds commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (commonly referred to as Freddie MAC) through a special purpose entity that has been identified as a VIE because it is “thinly capitalized.” The CMBS issued by the VIE are backed by mortgage debt obligations on real estate assets.
The Company provided a £105 million ($131 million at closing) bridge loan to Maria Mallaband Care Group Ltd. (“MMCG”) to fund the acquisitionactivities of a portfolio of care homes in the U.K. MMCG created a special purpose entity to acquire the portfolio and funded it entirely using the Company’s bridge loan. As such, the special purpose entity has been identified as a VIE because it is “thinly capitalized.” The Company retains a three-year call option to acquire all the shares of the special purpose entity, which it can only exercise upon the occurrence of certain events.
The Company provided seller financing of $10 million related to its sale of seven senior housing triple-net facilities. The financing was provided in the form of a secured five-year mezzanine loan to a “thinly capitalized” borrower created to acquire the facilities.
Between 2012unconsolidated VIEs and 2015, the Company funded a $257 million mezzanine loan facility to Tandem as part of a recapitalization of the Tandem Portfolio (see Note 6). Due to a decline in the fair value of the Tandem Portfolio over time, there is no longer sufficient equity at risk in Tandem and it has become a “thinly capitalized” borrower.interests therein.
The classification of the related assets and liabilities and the maximum loss exposure as a result of the Company’s involvement with these VIEs at September 30, 2017March 31, 2023 was as follows (in thousands):
VIE Type Asset/Liability Type 
Maximum Loss
Exposure
and Carrying
Amount(1)
VIE tenants - DFLs(2)
 Net investment in DFLs $602,501
VIE tenants - operating leases(2)
 Lease intangibles, net and straight-line rent receivables 5,183
CCRC OpCo Investments in unconsolidated joint ventures 214,140
RIDEA II PropCo Investments in unconsolidated joint ventures 251,419
Development JVs Investments in unconsolidated joint ventures 11,202
Tandem Health Care Loans Receivable, net 197,374
Loan - Senior Secured Loans Receivable, net 141,574
Loan - Seller Financing Loans Receivable, net 10,000
CMBS and LLC investment Marketable debt and cost method investment 33,630

(1)VIE TypeThe Company’s maximum loss exposure represents the aggregate carrying amount of such investments (including accrued interest).Asset Type
Maximum Loss
Exposure and
Carrying Amount(1)
LLC investmentOther assets, net$14,985 
(2)Needham Land Parcel JVThe Company’s maximum loss exposure may be mitigated by re-leasing the underlying propertiesInvestments in and advances to new tenants upon an event of default.unconsolidated joint ventures15,658 

At September 30, 2017,(1)The Company’s maximum loss exposure represents the aggregate carrying amount of such investments.
As of March 31, 2023, the Company had not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including under circumstances in which it could be exposed to further losses (e.g., cash shortfalls).
See Notes 4, 6, and 7 for additional descriptions
27
Table of the nature, purpose and operating activities of the Company’s unconsolidated VIEs and interests therein.Contents

Consolidated Variable Interest Entities
HCP, Inc.’sThe Company’s consolidated total assets and total liabilities at September 30, 2017March 31, 2023 and December 31, 20162022 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to HCP, Inc. Total assets at September 30, 2017 and December 31, 2016 include VIE assets as follows (in thousands):
 September 30, 2017 December 31, 2016
Assets   
Building and improvements$2,833,834
 $3,522,310
Developments in process22,860
 31,953
Land227,682
 327,241
Accumulated depreciation(584,621) (676,276)
Net real estate2,499,755
 3,205,228
Investments in and advances to unconsolidated joint ventures2,119
 3,641
Accounts receivable, net9,964
 19,996
Cash and cash equivalents36,262
 35,844
Restricted cash2,137
 22,624
Intangible assets, net132,905
 169,027
Other assets, net56,854
 69,562
Total assets$2,739,996
 $3,525,922
Liabilities   
Mortgage debt45,067
 520,870
Intangible liabilities, net9,170
 8,994
Accounts payable and accrued expenses102,780
 120,719
Deferred revenue18,162
 23,456
Total liabilities$175,179
 $674,039
RIDEA I.  The Company holds a 90% ownership interest in JV entities formed in September 2011 that own and operate senior housing properties in a RIDEA structure (“RIDEA I”). The Company has historically classified RIDEA I OpCo as a VIE and, as a result of the adoption of ASU No. 2015-02, Amendments to the Consolidation Analysis (“ASU 2015-02”), also classifies RIDEA I PropCo as a VIE due to the non-managing member lacking substantive participation rights in the management of RIDEA I PropCo or kick-out rights over the managing member. The Company consolidates RIDEA I PropCo and RIDEA I OpCo as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of RIDEA I PropCo primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of notes payable to a non-VIE consolidated subsidiary of the Company. The assets of RIDEA I OpCo primarily consist of leasehold interests in senior housing facilities (operating leases), resident fees receivable, and cash and cash equivalents; its obligations primarily consist of lease payments to RIDEA I PropCo and operating expenses of its senior housing facilities (accounts payable and accrued expenses). Assets generated by the senior housing operations (primarily from senior housing resident rents) of the RIDEA I structure may only be used to settle its contractual obligations (primarily from the rental costs, operating expenses incurred to manage such facilities and debt costs).
RIDEA III.  The Company holds a 90% ownership interest in JV entities formed in June 2015 that own and operate senior housing properties in a RIDEA structure. The Company has historically classified RIDEA III OpCo as a VIE and, as a result of the adoption of ASU 2015-02, also classifies RIDEA III PropCo as a VIE due to the non-managing member lacking substantive participation rights in the management of RIDEA III PropCo or kick-out rights over the managing member. The Company consolidates RIDEA III PropCo and RIDEA III OpCo as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of RIDEA III PropCo primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of a note payable to a non-VIE consolidated subsidiary of the Company. The assets of RIDEA III OpCo primarily consist of leasehold interests in senior housing facilities (operating leases), resident fees receivable, and cash and cash equivalents; its obligations primarily consist of lease payments to RIDEA III PropCo and operating expenses of its senior housing facilities (accounts payable and accrued expenses). Assets generated by the senior housing operations (primarily from senior housing resident rents) of the RIDEA III structure may only be used to settle its contractual obligations (primarily from the rental costs, operating expenses incurred to manage such facilities and debt costs).

HCP Ventures V, LLC.  The Company holds a 51% ownership interest in and is the managing member of a JVjoint venture entity formed in October 2015 that owns and leases MOBs (“HCP Ventures V”). Upon adoption of ASU 2015-02, theThe Company classified HCPclassifies Ventures V as a VIE due to the non-managing member lacking substantive participation rights in the management of HCP Ventures V or kick-out rights over the managing member. The Company consolidates HCP Ventures V as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of HCP Ventures V primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of capital expenditures for the properties. Assets generated by HCP Ventures V may only be used to settle its contractual obligations (primarily from capital expenditures).obligations.
Vintage Park JV.Life Science JVs.  The Company holds a 90%98% or greater ownership interest in multiple joint venture entities that own and lease life science assets (the “Life Science JVs”). The Life Science JVs are VIEs as the members share in certain decisions of the entities, but substantially all of the activities are performed on behalf of the Company. The Company consolidates the Life Science JVs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the Life Science JVs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of capital expenditures for the properties. Assets generated by the Life Science JVs may only be used to settle their contractual obligations. Refer to Note 11 for a JVdiscussion of certain put options associated with the Life Science JVs.
MSREI MOB JV. The Company holds a 51% ownership interest in, and is the managing member of, a joint venture entity formed in January 2015August 2018 that owns an 85% interest in an unconsolidated development VIE (“Vintage Parkand leases MOBs (the “MSREI JV”). Upon adoption of ASU 2015-02, the Company classified Vintage ParkThe MSREI JV asis a VIE due to the non-managing member lacking substantive participation rights in the management of the Vintage Park JVjoint venture or kick-out rights over the managing member. The Company consolidates Vintage Parkthe MSREI JV as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of Vintage Parkthe MSREI JV primarily consist of an investment in the Vintage Park Development JVleased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of fundingcapital expenditures for the ongoing development of the Vintage Park Development JV.properties. Assets generated by the Vintage ParkMSREI JV may only be used to settle its contractual obligations (primarily from the funding of the Vintage Park Development JV).obligations.
DownREITs.  The Company holds a controlling ownership interest in and is the managing member of fiveseven DownREITs. Upon adoption of ASU 2015-02, theThe Company classifiedclassifies the DownREITs as VIEs due to the non-managing members lacking substantive participation rights in the management of the DownREITs or kick-out rights over the managing member. The Company consolidates the DownREITs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the DownREITs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the DownREITs (primarily from resident rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures).
Other Consolidated Real Estate Partnerships.The Company holds a controlling ownership interest in and is the general partner (or managing member) of multiple partnerships that own and lease real estate assets (the “Partnerships”). Upon adoption of ASU 2015-02, theThe Company classifiedclassifies the Partnerships as VIEs due to the limited partners (non-managing members) lacking substantive participation rights in the management of the Partnerships or kick-out rights over the general partner (managing member). The Company consolidates the Partnerships as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the Partnerships primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the Partnerships (primarily from resident rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures).
Other consolidated VIEs.  The Company made a loan to an entity that entered into a tax credit structure (“Tax Credit Subsidiary”)
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Total assets and a loan to an entity that made an investment in a development JV (“Development JV”) both of which are considered VIEs. The Company consolidates the Tax Credit Subsidiary and Development JV as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIEs’ economic performance. Thetotal liabilities include VIE assets and liabilities, excluding those of the Tax Credit SubsidiaryHealthpeak OP, as follows (in thousands):
 March 31,
2023		December 31,
2022
Assets  
Buildings and improvements$2,348,215 $2,356,905 
Development costs and construction in progress54,319 58,499 
Land322,014 324,714 
Accumulated depreciation and amortization(615,936)(623,244)
Net real estate2,108,612 2,116,874 
Accounts receivable, net9,024 6,893 
Cash and cash equivalents21,631 20,586 
Restricted cash422 354 
Intangible assets, net69,477 73,860 
Assets held for sale, net— 30,355 
Right-of-use asset, net98,893 99,376 
Other assets, net73,107 73,690 
Total assets$2,381,166 $2,421,988 
Liabilities  
Mortgage debt$144,668 $144,604 
Intangible liabilities, net14,255 15,066 
Liabilities related to assets held for sale, net— 401 
Lease liability99,185 99,039 
Accounts payable, accrued liabilities, and other liabilities66,477 68,979 
Deferred revenue47,410 39,661 
Total liabilities$371,995 $367,750 
Total assets and Development JV substantially consist of a development in progress, notes receivable, prepaid expenses, notes payable, and accounts payable and accruedtotal liabilities generated from their operating activities. Any assets generated by the operating activities of the Tax Credit Subsidiary and Development JV may only be used to settle their contractual obligations.
NOTE 17.  Concentration of Credit Risk
Concentrations of credit risk arise when one or more tenants, operators or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, includingassets held for sale include VIE assets and liabilities, excluding those to the Company, to be similarly affected by changes in economic conditions. The Company regularly monitors various segments of its portfolio to assess potential concentrations of credit risks.Healthpeak OP, as follows (in thousands):
The following tables provide information regarding the Company’s concentrations of credit risk with respect to certain tenants:
  Percentage of Gross Assets
  Total Company Senior Housing Triple-Net
  September 30, December 31, September 30, December 31,
Tenant 2017 2016 2017 2016
Brookdale(1)
 11% 17% 42% 69%

  Percentage of Revenues
  Total Company Revenues Senior Housing Triple-Net Revenues
  Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,
Tenant 2017 2016 2017 2016 2017 2016 2017 2016
Brookdale(1)
 8% 12% 10% 12% 48% 60% 53% 59%

(1)Includes assets and revenues from 64 senior housing triple-net facilities that were classified as held for sale at March 31,
2023		December 31, 2016
2022
Assets
Buildings and sold in March 2017. improvements$— $39,934 
Land— 1,926 
Accumulated depreciation and amortization— (15,612)
Net real estate— 26,248 
Intangible assets, net— 215 
Other assets, net— 3,892 
Total assets$— $30,355 
Liabilities
Deferred revenue$— $401 
Total liabilities$— $401 
At September 30, 2017 and December 31, 2016, Brookdale managed or operated, in the Company’s SHOP segment, approximately 13% and 18%, respectively,
29
Table of the Company’s real estate investments based on gross assets. Because an operator manages the Company’s facilities in exchange for the receipt of a management fee, the Company is not directly exposed to the credit risk of its operators in the same manner or to the same extent as its triple-net tenants. At September 30, 2017, Brookdale provided comprehensive facility management and accounting services with respect to 59 of the Company’s SHOP facilities and 62 SHOP facilities owned by its unconsolidated joint ventures, for which the Company or joint venture pay annual management fees pursuant to long-term management agreements. Most of the management agreements have terms ranging from 10 to 15 years, with three to four 5-year renewal periods. The base management fees are 4.5% to 5.0% of gross revenues (as defined) generated by the RIDEA facilities. In addition, there are incentive management fees payable to Brookdale if operating results of the RIDEA properties exceed pre-established EBITDAR (as defined) thresholds.Contents
Brookdale is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. The information related to Brookdale contained or referred to in this report has been derived from SEC filings made by Brookdale or other publicly available information, or was provided to the Company by Brookdale, and the Company has not verified this information through an independent investigation or otherwise. The Company has no reason to believe that this information is inaccurate in any material respect, but the Company cannot assure the reader of its accuracy. The Company is providing this data for informational purposes only, and encourages the reader to obtain Brookdale’s publicly available filings, which can be found on the SEC’s website at www.sec.gov.
See Note 1 for further information on the reduction of concentration related to Brookdale.
To mitigate the credit risk of leasing properties to certain senior housing and post-acute/skilled nursing operators, leases with operators are often combined into portfolios that contain cross-default terms, so that if a tenant of any of the properties in a portfolio defaults on its obligations under its lease, the Company may pursue its remedies under the lease with respect to any of the properties in the portfolio. Certain portfolios also contain terms whereby the net operating profits of the properties are combined for the purpose of securing the funding of rental payments due under each lease.
NOTE 18.16.  Fair Value Measurements
Financial assets and liabilities measured at fair value on a recurring basis at September 30, 2017 in the consolidated balance sheets are immaterial.

The table below summarizes the carrying amounts and fair values of the Company’s financial instruments either recorded or disclosed on a recurring basis (in thousands):
 
March 31, 2023(3)
December 31, 2022(3)
 Carrying
Value		Fair ValueCarrying
Value		Fair Value
Loans receivable, net(2)
$243,149 $245,125 $374,832 $369,425 
Marketable debt securities(2)
— — 21,702 21,702 
Interest rate swap instruments(2)
20,782 20,782 30,259 30,259 
Bank line of credit and commercial paper(2)
556,000 556,000 995,606 995,606 
Term loans(2)
496,168 496,168 495,957 495,957 
Senior unsecured notes(1)
5,056,543 4,712,340 4,659,451 4,238,124 
Mortgage debt(2)
345,167 330,856 346,599 330,867 
_______________________________________
 
September 30, 2017(4)
 
December 31, 2016(4)
 
Carrying
Value
 Fair Value 
Carrying
Value
 Fair Value
Loans receivable, net(2)  
$402,152
 $402,267
 $807,954
 $807,505
Marketable debt securities(2)  
18,567
 18,567
 68,630
 68,630
Marketable equity securities(1)  
74
 74
 76
 76
Warrants(3)  
58
 58
 19
 19
Bank line of credit(2)  
605,837
 605,837
 899,718
 899,718
Term loans(2)  
226,205
 226,205
 440,062
 440,062
Senior unsecured notes(1)  
6,393,926
 6,769,010
 7,133,538
 7,386,149
Mortgage debt(2)  
145,417
 131,419
 623,792
 609,374
Other debt(2)  
94,818
 94,818
 92,385
 92,385
Interest-rate swap liabilities(2)  
2,980
 2,980
 4,857
 4,857
Currency swap asset(2)  
—
 —
 2,920
 2,920
Cross currency swap liability(2)  
9,469
 9,469
 —
 —
(1)Level 1: Fair value is calculated based on quoted prices in active markets.

(2)Level 2: Fair value is based on (i) for marketable debt securities, quoted prices for similar or identical instruments in active or inactive markets, respectively, or (ii) for loans receivable, net, mortgage debt, and interest rate swap instruments, standardized pricing models in which significant inputs or value drivers are observable in active markets. For bank line of credit, commercial paper, and term loans, the carrying values are a reasonable estimate of fair value because the borrowings are primarily based on market interest rates and the Company’s credit rating.
(3)During the three months ended March 31, 2023 and year ended December 31, 2022, there wereno material transfers of financial assets or liabilities within the fair value hierarchy.
NOTE 17.  Derivative Financial Instruments
(1)Level 1: Fair value calculated based on quoted prices in active markets.  
(2)Level 2: Fair value based on (i) for marketable debt securities, quoted prices for similar or identical instruments in active or inactive markets, respectively, or (ii) or for loans receivable, net, mortgage debt, and swaps, calculated utilizing standardized pricing models in which significant inputs or value drivers are observable in active markets. For bank line of credit, term loans and other debt, the carrying values are a reasonable estimate of fair value because the borrowings are primarily based on market interest rates and the Company’s credit rating.
(3)Level 3: Fair value determined based on significant unobservable market inputs using standardized derivative pricing models.
(4)During the nine months ended September 30, 2017 and year ended December 31, 2016, there were no material transfers of financial assets or liabilities within the fair value hierarchy.
NOTE 19.  Derivative Financial Instruments
The following table summarizes the Company’s outstanding interest-rate and cross currency swap contracts at September 30, 2017 (dollars and GBP in thousands):
Date Entered Maturity Date Hedge Designation Notional Pay Rate Receive Rate 
Fair Value(1)
Interest rate:      
    
  
July 2005(2)
 July 2020 Cash Flow $44,000
 3.82% BMA Swap Index
 $(2,980)
Cross currency swap:            
April 2017(3) 
 February 2019 Net Investment £105,000 / $131,400
 2.58% 3.75% $(9,469)

(1)Derivative assets are recorded in other assets, net and derivative liabilities are recorded in accounts payable and accrued liabilities on the consolidated balance sheets.
(2)Represents three interest-rate swap contracts, which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows.
(3)Represents a cross currency swap to pay 2.584% on £105 million and receive 3.75% on $131 million through February 1, 2019, with an initial and final exchange of principals at origination and maturity at a rate of 1.251 USD/GBP. Hedges the risk of changes in the USD equivalent value of a portion of the Company’s net investment in its consolidated GBP subsidiaries’ attributable to changes in the USD/GBP exchange rate.
The Company uses derivative instruments to mitigate the effects of interest rate and foreign currency fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest rates and foreign currency ratestheir related to the potential impact these changes could have on future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes. AssumingAt March 31, 2023, a one percentage point shiftincrease or decrease in the underlying interest rate curve would result in a corresponding increase or decrease in the estimatedfair value of the derivative instruments by approximately $22 million.
In April 2021, the Company executed two interest rate cap instruments on $142 million of variable rate mortgage debt secured by a portfolio of MOBs (see Note 9). During the three months ended March 31, 2022, the Company recognized a $2 million increase in the fair value of the interest rate cap instruments within other income (expense), net. In April 2022, the Company terminated these interest rate cap instruments and entered into two interest rate swap instruments that are designated as cash flow hedges and mature in May 2026. In February 2023, the Company modified its two interest rate swap instruments totaling a $142 million notional value to reflect the change in the related variable rate mortgage debt’s interest rate benchmarks from LIBOR to SOFR (see Note 9). The Company applied certain practical expedients provided by ASU 2020-04 and ASU 2021-01 in connection with the modifications to these cash flow hedges (see Note 2).
In August 2022, the Company entered into two forward-starting interest rate swap instruments on the $500 million aggregate principal amount of the Term Loan Facilities (see Note 9). The interest rate swap instruments are designated as cash flow hedges.
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The following table summarizes the Company’s interest rate swap instruments (in thousands):
Fair Value(2)
Date EnteredMaturity DateHedge DesignationNotional Amount
Pay Rate(1)
Receive Rate(1)
March 31,
2023		December 31,
2022
April 2022(3)
May 2026Cash flow$51,100 4.99 %USD-SOFR w/ -5 Day Lookback + 2.50%$1,675 $2,300 
April 2022(3)
May 2026Cash flow91,000 4.54 %USD-SOFR w/ -5 Day Lookback + 2.05%2,983 4,096 
August 2022(3)
February 2027Cash flow250,000 2.60 % 1 mo. USD-SOFR CME Term7,658 11,299 
August 2022(3)
August 2027Cash flow250,000 2.54 % 1 mo. USD-SOFR CME Term8,466 12,564 
_____________________________
(1)Pay rates and receive rates are as of March 31, 2023. As of December 31, 2022, the interest rate swap instrument with a $51 million notional amount had a pay rate of 5.08% and a receive rate of 1 mo. USD-LIBOR-BBA + 2.50%. As of December 31, 2022, the interest rate swap instrument with a $91 million notional amount had a pay rate of 4.63% and a receive rate of 1 mo. USD-LIBOR-BBA + 2.05%.
(2)At each of March 31, 2023 and December 31, 2022, the interest rate swap instruments were in an asset position. Derivative assets are recorded at fair value in other assets, net on the Consolidated Balance Sheets.
(3)Represents interest rate swap instruments that hedge fluctuations in interest payments on variable rate debt by converting the interest rates to fixed interest rates. The changes in fair value of each of the underlying derivative instruments would not exceed $2 million. Assuming a one percentage point shift in the underlying foreign currency exchange rates, the estimated change in fair value of each of the underlying derivative instruments would not exceed $2 million.
At September 30, 2017, £150 million of the Company’s GBP-denominated borrowings under the 2015 Term Loan and a £105 million cross currency swap are designated as a hedge of a portion of the Company’s net investments in GBP-functional subsidiaries

to mitigate its exposure to fluctuations in the GBP to USD exchange rate. For instrumentsderivatives that are designated and qualify as net investmentcash flow hedges the variability in the foreign currency to USD exchange rate of the instrument isare recorded as part of the cumulative translation adjustment component of accumulated other comprehensive income (loss). Accordingly, the remeasurement value of the designated £150 million GBP-denominated borrowings and £105 million cross currency swap due to fluctuations in the GBP to USD exchange rate are reported in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.
NOTE 18.    Accounts Payable, Accrued Liabilities, and Other Liabilities
The following table summarizes the Company’s accounts payable, accrued liabilities, and other liabilities (in thousands):
 March 31,
2023		December 31,
2022
Refundable entrance fees$264,065 $268,972 
Accrued construction costs161,774 178,626 
Accrued interest39,065 59,291 
Other accounts payable and accrued liabilities(1)
224,090 265,596 
Accounts payable, accrued liabilities, and other liabilities$688,994 $772,485 

(1)As of March 31, 2023 and December 31, 2022, includes $12 million and $15 million, respectively,of severance-related charges associated with the departure of a former CEO in October 2022 that had not yet been paid.
NOTE 19.    Deferred Revenue
The following table summarizes the Company’s deferred revenue, excluding deferred revenue related to assets classified as held for sale (in thousands):
March 31,
2023		December 31,
2022
Nonrefundable entrance fees(1)
$527,476 $518,573 
Other deferred revenue(2)
350,968 325,503 
Deferred revenue$878,444 $844,076 

(1)During the hedging relationshipthree months ended March 31, 2023 and 2022, the Company collected nonrefundable entrance fees of $29 million and $21 million, respectively. During the three months ended March 31, 2023 and 2022, the Company recognized amortization of $20 million and$19 million, respectively, which is consideredincluded within resident fees and services on the Consolidated Statements of Operations.
(2)Other deferred revenue is primarily comprised of prepaid rent, deferred rent, and tenant-funded tenant improvements owned by the Company. During the three months ended March 31, 2023 and 2022, the Company recognized amortization related to be effective. The cumulative balanceother deferred revenue of $13 million and $9 million,respectively, which is included in rental and related revenues on the remeasurement value will be reclassified to earnings when the hedged investment is sold or substantially liquidated.Consolidated Statements of Operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
AllOn February 7, 2023, we announced our intent to complete an UPREIT reorganization. As part of the reorganization, the company formerly known as Healthpeak Properties, Inc. (“Old Healthpeak”) formed New Healthpeak, Inc. (“New Healthpeak”) as a wholly owned subsidiary, and New Healthpeak formed Healthpeak Merger Sub, Inc. (“Merger Sub”) as a wholly owned subsidiary. On February 10, 2023, Merger Sub merged with and into Old Healthpeak, with Old Healthpeak continuing as the surviving corporation and a wholly owned subsidiary of New Healthpeak (the “Merger”). In connection with the Merger, New Healthpeak changed its name to Healthpeak Properties, Inc. In connection with the UPREIT reorganization and immediately following the Merger, Old Healthpeak converted from a Maryland corporation to a Maryland limited liability company named Healthpeak OP, LLC (“Healthpeak OP”). This Quarterly Report on Form 10-Q pertains to the business and results of operations of Old Healthpeak through February 9, 2023 and of New Healthpeak from and including February 10, 2023.
Unless the context requires otherwise, all references in this report to “HCP,“Healthpeak,” the “Company,” “we,” “us” or “our” mean HCP, Inc.,refer to Old Healthpeak through February 9, 2023 and to New Healthpeak from and including February 10, 2023, in each case together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “HCP,“Healthpeak Properties, Inc.” mean the parent company without its subsidiaries.
Cautionary Language Regarding Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q that are not historical factual statements are “forward-looking statements.” We intend to have our forward-looking statements covered bystatements” within the safe harbor provisionsmeaning of Section 27A of the Private Securities Litigation Reform Act of 19951933, as amended, and include this statement for purposesSection 21E of complying with those provisions.the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,” “potential,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof. Forward-looking statements reflect our current expectations and views about future events and are subject to known and unknown risks and uncertainties that could significantly affectcause actual results, including our future financial condition and results of operations.operations, to differ materially from those expressed or implied by any forward-looking statements. You are urged to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance.
Forward-looking statements are based on certain assumptions and analysis made in light of our experience and perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate under the circumstances. While forward-looking statements reflect our good faith belief and assumptions we believe to be reasonable based upon current information, we can give no assurance that our expectations or forecasts will be attained. Further, we cannot guarantee the accuracy of any such forward-looking statement contained in this Quarterly Report on Form 10-Q.
As more fully set forth under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016,2022 and in Part II, Item 1A. “Risk Factors” in ourthis Quarterly Report on Form 10-Q, for the fiscal quarter ended March 31, 2017, risks and uncertainties that may cause our actual results to differ materially from the expectations contained in the forward-looking statements include, among other things:
our reliance on a concentration of a small number of tenants•macroeconomic trends, including inflation, interest rates, labor costs, and operators for a significant portion of our revenues, with our concentration of assets operated by Brookdale Senior Living, Inc. (“Brookdale”) increasing as a result of the consummation of the spin-off of Quality Care Properties, Inc. (“QCP”) on October 31, 2016 (the “Spin-Off”);unemployment;
the financial condition of our existing and future tenants, operators and borrowers, including potential bankruptcies and downturns in their businesses, and their legal and regulatory proceedings, which results in uncertainties regarding our ability to continue to realize the full benefit of such tenants’ and operators’ leases and borrowers’ loans;
•the ability of our existing and future tenants, operators, and borrowers to conduct their respective businesses in a manner sufficient to maintain or increase their revenues and to generatethat generates sufficient income to make rent and loan payments to usus;
•the financial condition of our tenants, operators, and our ability to recover investments made, if applicable,borrowers, including potential bankruptcies and downturns in their operations;businesses, and their legal and regulatory proceedings;
competition for tenants and operators, including with respect to new leases and mortgages and the renewal or rollover of existing leases;
•our concentration of real estate investments in the healthcare property sector, particularly in senior housing, life sciences, medical office buildings and hospitals, which makes our profitabilityus more vulnerable to a downturn in a specific sector thatthan if we were investing ininvested across multiple industries;sectors;
availability•the illiquidity of suitable properties to acquire at favorable prices, the competition for the acquisition and financing of those properties, and the costs of associated property development;real estate investments;
•our ability to negotiateidentify and secure new or replacement tenants and operators;
•our property development, redevelopment, and tenant improvement activity risks, including project abandonments, project delays, and lower profits than expected;
•changes within the samelife science industry;
•significant regulation, funding requirements, and uncertainty faced by our life science tenants;
•the ability of the hospitals on whose campuses our medical office buildings (“MOBs”) are located and their affiliated healthcare systems to remain competitive or better terms with new tenantsfinancially viable;
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•our ability to develop, maintain, or operators if existing leases are not renewed or we exercise our right to foreclose on loan collateral or replace an existing tenant or operator upon default;expand hospital and health system client relationships;
the•operational risks associated with third party management contracts, including the additional regulation and liabilities of our properties operated through structures permitted by the Housing and Economic Recovery Act of 2008, which includes most of the provisions previously proposed in the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”);
•economic conditions, natural disasters, weather, and other conditions that negatively affect geographic areas where we have concentrated investments;
•uninsured or underinsured losses, which could result in significant losses and/or performance declines by us or our tenants and operators;
•our investments in joint ventures and unconsolidated entities, including our lack of sole decision making authority and our reliance on our partners’ financial condition and continued cooperation;
•our use of fixed rent escalators, contingent rent provisions, and/or rent escalators based on the Consumer Price Index;
•competition for suitable healthcare properties to grow our investment portfolio;
•our ability to achieve the benefitsforeclose or exercise rights on collateral securing our real estate-related loans;
•investment of investments within expectedsubstantial resources and time framesin transactions that are not consummated;
•our ability to successfully integrate or at all, or within expected cost projections;operate acquisitions;
operational risks associated with third party management contracts, including the additional regulation and liabilities of our RIDEA lease structures;
•the potential impact on us and our tenants, operators, and borrowers from current and future litigation matters, including the possibility of larger than expected litigationrising liability and insurance costs;
•environmental compliance costs adverse results and related developments;liabilities associated with our real estate investments;
the effect on our tenants and operators of legislation, executive orders and•epidemics, pandemics, or other legal requirements,infectious diseases, including the Affordable Care Actcoronavirus disease (“Covid”), and licensure, certificationhealth and inspection requirements, as well as laws addressing entitlement programs and related services, including Medicare and Medicaid, which may result in future reductions in reimbursements;safety measures intended to reduce their spread;
changes in federal, state•the loss or local laws and regulations, including those affecting the healthcare industry that affect our costs of compliance or increase the costs, or otherwise affect the operations,limited availability of our tenantskey personnel;
•our reliance on information technology systems and operators;the potential impact of system failures, disruptions, or breaches;

•increased borrowing costs, including due to rising interest rates;
volatility or uncertainty in the capital markets, •cash available for distribution to stockholders and our ability to make dividend distributions at expected levels;
•the availability and cost of external capital as impacted byon acceptable terms or at all, including due to rising interest rates, changes in our credit ratings and the value of our common stock, volatility or uncertainty in the capital markets, and other conditions that may adversely impact our ability to fund our obligations or consummate transactions, or reduce the earnings from potential transactions;factors;
changes in global, national and local economic conditions, and currency exchange rates;
•our ability to manage our indebtedness level and covenants in and changes into the terms of such indebtedness;
competition for skilled management•bank failures or other events affecting financial institutions;
•the failure of our tenants, operators, and borrowers to comply with federal, state, and local laws and regulations, including resident health and safety requirements, as well as licensure, certification, and inspection requirements;
•required regulatory approvals to transfer our senior housing properties;
•compliance with the Americans with Disabilities Act and fire, safety, and other key personnel;regulations;
•laws or regulations prohibiting eviction of our tenants;
•the requirements of, or changes to, governmental reimbursement programs such as Medicare or Medicaid;
•legislation to address federal government operations and administrative decisions affecting the Centers for Medicare and Medicaid Services;
•our participation in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Provider Relief Fund and other Covid-related stimulus and relief programs;
•our ability to maintain our qualification as a real estate investment trust (“REIT”).;
•changes to U.S. federal income tax laws, and potential deferred and contingent tax liabilities from corporate acquisitions;
•calculating non-REIT tax earnings and profits distributions;
•ownership limits in our charter that restrict ownership in our stock; and
•provisions of Maryland law and our charter that could prevent a transaction that may otherwise be in the interest of our stockholders.
Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.
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Overview
The information set forth in this Item 2 is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations. We will discuss and provide our analysis in the following order:
•Executive Summary
2017 Transaction Overview•Market Trends and Uncertainties
Dividends•Overview of Transactions
•Dividends
•Results of Operations
•Liquidity and Capital Resources
Off-Balance Sheet Arrangements
•Non-GAAP Financial Measures Reconciliations
•Critical Accounting PoliciesEstimates
Recent Accounting Pronouncements
Executive Summary
HCP,Healthpeak Properties, Inc.,is a Standard & Poor’s (“S&P”) 500 company invests primarily inthat acquires, develops, owns, leases, and manages healthcare real estate serving the healthcare industry inacross the United States.States (“U.S.”). Our company was originally founded in 1985. As noted above, we completed an UPREIT reorganization on February 10, 2023, and following that date, we hold substantially all of our assets and conduct our operations through the operating subsidiary, Healthpeak OP, LLC, a consolidated subsidiary of which we are the managing member. We are a Maryland corporation organized in 1985 and qualify as a self-administered REIT. We acquire, develop, lease, manageOur corporate headquarters are located in Denver, Colorado, and disposewe have additional offices in California, Tennessee, and Massachusetts.
Our strategy is to invest in a diversified portfolio of high-quality healthcare properties across our three core asset classes of life science, medical office, and continuing care retirement community (“CCRC”) real estate. Under the life science and medical office segments, we invest through the acquisition, development, and management of life science facilities, MOBs, and hospitals. Under the CCRC segment, our properties are operated through RIDEA structures. We have other non-reportable segments that are comprised primarily of loans receivable, marketable debt securities, and an interest in an unconsolidated joint venture that owns 19 senior housing assets (our “SWF SH JV”). These non-reportable segments have been presented on an aggregate basis herein.
At September 30, 2017,March 31, 2023, our portfolio of investments, including properties in our unconsolidated joint ventures, (“JVs”), consisted of interests in 818476 properties. The following table summarizes information for our reportable and other non-reportable segments, excluding discontinued operations, for the three months ended March 31, 2023 (dollars in thousands):
Segment
Total Portfolio Adjusted NOI(1)
Percentage of Total Portfolio Adjusted NOINumber of Properties
Life science$147,946 50.6 %147 
Medical office112,820 38.6 %295 
CCRC26,147 8.9 %15 
Other non-reportable5,547 1.9 %19 
$292,460 100 %476 

(1)Total Portfolio metrics include results of operations from disposed properties through the disposition date. See “Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional information regarding Adjusted NOI and see Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).
For a description of our significant activities during 2023, see “Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of Transactions” in this report.
In 2020, we concluded that the dispositions of our senior housing triple-net and senior housing operating property (“SHOP”) portfolios represented a strategic shift that had a major effect on our operations and financial results. Therefore, senior housing triple-net and SHOP assets are classified as discontinued operations in all periods presented herein. See Note 4 to the Consolidated Financial Statements for further information regarding discontinued operations.
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Business Strategy
We invest in and manage our real estate portfolio for the long-term to maximize the benefit to our stockholders and support the growth of our dividends. TheOur strategy consists of four core elements of our strategy are: elements:
(i) to acquire, develop, lease, own and manage a diversifiedOur real estate: Our portfolio of quality healthcareis grounded in high-quality properties across multiple geographic locations and business segments including senior housing,in desirable locations. We focus on three purposely selected private pay asset classes—life science, medical office, and life science, among others; (ii) continuing care retirement community—to align ourselvesprovide stability through inevitable market cycles.
(ii)Our financials: We maintain a strong investment-grade balance sheet with leading healthcare companies, operators and service providers, which over theample liquidity as well as long-term should result in higher relative rental rates, net operating cash flows and appreciation of property values; (iii) to maintain adequate liquidity with long-term fixed ratefixed-rate debt financing with staggered maturities which supports the longer-term nature of our investments, while reducingto reduce our exposure to interest rate volatility and refinancing risk at any point in the interest rate or credit cycles; and (iv) to continue to manage our balance sheet with a targeted financial leverage of 40% relative to our assets.risk.
We believe that our real estate portfolio holds the potential for increased future cash flows as it is well-maintained and in desirable locations within markets where new supply is generally limited by the lack of available sites and the difficulty of obtaining the necessary licensing, other approvals and/or financing. (iii)Our strategy for maximizing the benefits from these opportunities is to: (i)partnerships: We work with new or existing tenantsleading pharmaceutical and biotechnology companies, healthcare companies, operators, and service providers and are responsive to address their space and capital needs and (ii)needs. We provide high-quality property management services in order to motivateencourage tenants to renew, expand, orand relocate into our properties.properties, which drives increased occupancy, rental rates, and property values.
The delivery(iv)Our platform: We have a people-first culture that we believe attracts, develops, and retains top talent. We continually strive to create and maintain an industry-leading platform, with systems and tools that allow us to effectively and efficiently manage our assets and investment activity.
Market Trends and Uncertainties
Our operating results have been and will continue to be impacted by global and national economic and market conditions generally and by the local economic conditions where our properties are located.
Rising interest rates, high inflation, supply chain disruptions, ongoing geopolitical tensions, and increased volatility in public and private equity and fixed income markets have led to increased costs and limited the availability of healthcare services requirescapital. In addition, bank failures and other adverse conditions in the financial or credit markets impacting financial institutions, or concerns or rumors about such events, may lead to disruptions in access to bank deposits and the ability of financial institutions to meet their obligations. To the extent our tenants or operators experience increased costs, liquidity constraints, or financing difficulties due to the foregoing macroeconomic and market conditions, they may be unable or unwilling to make payments or perform their obligations when due. In addition, increased interest rates could affect our borrowing costs and the fair value of our fixed rate instruments.
We have also been affected by significant inflation in construction costs over the past couple of years, which, together with rising costs of capital, have negatively affected the expected yields on our development and redevelopment projects. In addition, labor shortages and global supply chain disruptions, including procurement delays and long lead times on certain materials, have adversely impacted and could continue to adversely impact the scheduled completion and/or costs of these projects.
Further, the full, long-term economic impact of the Covid pandemic on the operations of our CCRCs and the senior housing facilities owned by our SWF SH JV remains uncertain. Many factors cannot be predicted and will remain unpredictable, including the impact, duration, and severity of new variants and outbreaks. Due to these uncertainties, at this time, we are not able to estimate the full impact of Covid on our consolidated financial position, results of operations, and cash flows in the future.
We continuously monitor the effects of domestic and global events, including but not limited to inflation, labor shortages, supply chain matters, rising interest rates, and distress in the financial markets on our operations and financial position, as well as on the operations and financial position of our tenants, operators, and borrowers, to ensure that we remain responsive and adaptable to the dynamic changes in our operating environment.
See Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for additional discussion of the risks posed by macroeconomic conditions, as well as the uncertainties we and our tenants, operators, and borrowers may face as a result.
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Overview of Transactions
In February 2023, we completed our planned UPREIT reorganization. This reorganization provides prospective sellers an alternative for disposing of property that has appreciated in value in a tax-deferred manner to Healthpeak OP and aligns the Company’s corporate structure with other publicly traded U.S. real estate investment trusts. Following the UPREIT reorganization, Healthpeak OP is the borrower under, and as a result, tenants and operators depend on real estate, in part, to maintain and grow their businesses. We believe thatwe are the healthcare real estate market provides investment opportunities due to the: (i) compelling long-term demographics driving the demand for healthcare services; (ii) specialized natureguarantor of, healthcare real estate investing; and (iii) ongoing consolidation of the fragmented healthcare real estate sector.
While we emphasize healthcare real estate ownership, we may also provide real estate secured financing to, or invest in equity or debt securities of, healthcare operators or other entities engaged in healthcare real estate ownership. We may also acquire all or substantially all of the securities or assetsunsecured debt, which includes the Revolving Facility, Term Loan Facilities (each as defined below), commercial paper program, and senior unsecured notes. Our guarantee of other REITs, operating companies or similar entities where such investments would be consistent with our investment strategies. We may co-invest alongside institutional or development investors through partnerships or limited liability companies.

We monitor, but dothe senior unsecured notes is full and unconditional and applicable to existing and future senior unsecured notes. The reorganization did not limit, our investments basedhave a material impact on the percentage of our total assets that may be invested in any one property type, investment vehicleCompany’s financial position, consolidated financial statements, outstanding debt securities, material debt facilities, or geographic location, the number of properties that may be leased to a single tenant or operator, or loans that may be made to a single borrower. In allocating capital, we target opportunities with the most attractive risk/reward profile for our portfolio as a whole. We may take additional measures to mitigate risk, including diversifying our investments (by sector, geography, tenant or operator), structuring transactions as master leases, requiring tenant or operator insurance and indemnifications, and obtaining credit enhancements in the form of guarantees, letters of credit or security deposits.business operations.
Our REIT qualification requires us to distribute at least 90% of our REIT taxable income (excluding net capital gains); therefore, we do not retain capital. As a result, we regularly access the public equity and debt markets to raise the funds necessary to finance acquisitions and debt investments, develop and redevelop properties, and refinance maturing debt.
We maintain a disciplined balance sheet by actively managing our debt to equity levels and maintaining multiple sources of liquidity. Our debt obligations are primarily long-term fixed rate with staggered maturities.
We finance our investments based on our evaluation of available sources of funding. For short-term purposes, we may utilize our revolving line of credit facility or arrange for other short-term borrowings from banks or other sources. We arrange for longer-term financing by offering debt and equity securities, placing mortgage debt and obtaining capital from institutional lenders and JV partners.
2017 Transaction Overview
Master Transactions and Cooperation Agreement with Brookdale
On November 1, 2017, HCP and Brookdale entered into a Master Transactions and Cooperation Agreement (the “MTCA”) to provide us with the ability to significantly reduce our concentration of assets leased to and/or managed by Brookdale. Through a series of dispositions and transitions of assets currently leased to and/or managed by Brookdale, as contemplated by the MTCA and further described below, our exposure to Brookdale is expected to be significantly reduced.
Master LeaseReal Estate Transactions
In connection with the overall transaction pursuant to the MTCA, HCP (through certain of our subsidiaries), and Brookdale (through certain of its subsidiaries) (the “Lessee”) entered into an Amended and Restated Master Lease and Security Agreement (the “Amended Master Lease”), which amended and restated the then-existing triple-net leases between the parties for 78 assets (before giving effect to the contemplated sale or transition of 34 assets discussed below), which account for primarily all of the assets subject to triple-net leases between HCP and the Lessee. Under the Amended Master Lease, we will have the benefit of a guaranty from Brookdale of the Lessee’s obligations and, upon a change in control, will have various additional protections under the MTCA and Amended Master Lease including:
A security deposit (which increases if specified leverage thresholds are exceeded);
A termination right if certain financial covenants and net worth test are not satisfied;
Enhanced reporting requirements and related remedies; and
The right to market for sale the CCRC portfolio.
Future changes in control of Brookdale are permitted pursuant to the Amended Master Lease, subject to certain conditions, including the purchaser either meeting experience requirements or retaining a majority of Brookdale’s principal officers.
The Amended Master Lease preserves the renewal terms and, with certain exceptions, the rents under the previously existing triple-net leases. In addition, HCP and Brookdale agreed to the following:
We will have the right to sell, or transition to other operators, 32 triple-net assets. If such sale or transition does not occur within one year, the triple-net lease with respect to such assets will convert to a cash flow lease (under which we will bear the risks and rewards of operating the assets) with a term of two years, provided that the Company has the right to terminate the cash flow lease at any time during the term without penalty;
We will provide an aggregate $5 million annual reduction in rent on three assets, effective January 1, 2018;
We will sell two triple-net assets to Brookdale or its affiliates for $35 million; and
We will have the right to convert five assets to a cash flow lease by December 31, 2017. We have the right to terminate the cash flow lease without penalty to facilitate the sale or transition of these additional assets, at our option.

Joint Venture Transactions
Also pursuant to the MTCA, HCP and Brookdale agreed to the following:
HCP, which currently owns 90% of the interests in its RIDEA I and RIDEA III joint ventures with Brookdale, will purchase Brookdale’s 10% noncontrolling interest in each joint venture. These joint ventures collectively own and operate 58 independent living, assisted living, memory care and/or skilled nursing facilities (the “RIDEA Facilities”);
We will have the right to sell, or transition to other managers, 36 of the RIDEA Facilities and terminate related management agreements with an affiliate of Brookdale without penalty. If the related management agreements are not terminated within one year, the base management fee (5% of gross revenues) increases by 1% of gross revenues per year over the following two years to a maximum of 7% of gross revenues;
We will sell four of the RIDEA Facilities to Brookdale or its affiliates for $239 million;
A Brookdale affiliate will continue to manage the remaining 18 RIDEA Facilities pursuant to amended and restated management agreements, which provide for extended terms on select assets, modified performance hurdles for extensions and incentive fees, and modified termination rights (including stricter performance-based termination rights, a staggered right to terminate seven agreements over a 10 year period beginning in 2021, and a right to terminate at will upon payment of a termination fee, in lieu of sale-related termination rights) and two other existing facilities managed in separate RIDEA structures; and
We will have the right to sell, to certain permitted transferees, our 49% ownership interest in joint ventures that own and operate a portfolio of continuing care retirement communities and in which Brookdale owns the other 51% interest (the “CCRC JV”), subject to certain conditions and a right of first offer in favor of Brookdale. Brookdale will have a corresponding right to sell its 51% interest in the CCRC JV to certain permitted transferees, subject to certain conditions, a right of first offer and a right to terminate management agreements following such sale of Brookdale’s interest, each in favor of HCP. Following a change in control of Brookdale, we will have the right to initiate a sale of the CCRC portfolio, subject to certain rights of first offer and first refusal in favor of Brookdale.
RIDEA II Sale Transaction
•In January 2017, we completed the contribution of our ownership interest in RIDEA II to an unconsolidated JV owned by HCP and an investor group led by Columbia Pacific Advisors, LLC (“CPA”) (“HCP/CPA PropCo” and “HCP/CPA OpCo,” together, the “HCP/CPA JV”). In addition, RIDEA II was recapitalized with $602 million of debt, of which $360 million was provided by a third-party and $242 million was provided by HCP. In return for both transaction elements, we received combined proceeds of $480 million from the HCP/CPA JV and $242 million in loan receivables and retained an approximately 40% ownership interest in RIDEA II (the note receivable and 40% ownership interest are herein referred to as the “RIDEA II Investments”). This transaction resulted in us deconsolidating the net assets of RIDEA II and recognizing a net gain on sale of $99 million. The RIDEA II Investments are currently recognized and accounted for as equity method investments.
On November 1, 2017, we entered into a definitive agreement with an investor group led by CPA to sell our remaining 40% ownership interest in RIDEA II. We expect the transaction to close in 2018. CPA has also agreed to cause refinancing of our $242 million loan receivables from RIDEA II within one year following the closing of the transaction. Total expected proceeds to us from the transaction and refinancing of the loan receivables from RIDEA II are $332 million.
Acquisition Transactions
During the second quarter of 2017, we acquired Wateridge, a 124,000 square foot campus in the Sorrento Mesa submarket of San Diego, California for $26 million. Upon acquisition, we commenced repositioning one of the buildings into class-A lab space following an office-to-lab conversion strategy.
During the third quarter of 2017, we acquired a portfolio of three medical office buildings in Texas for $49 million and a life science facility in South San Francisco, California for $64 million.
In October, we entered into definitive agreements to acquire a $228 million life science campus known as the Hayden Research Campus located in the Boston suburb of Lexington, Massachusetts. HCP will own a majority interest in this campus through a joint venture with King Street Properties (“King Street”). The campus includes two existing buildings totaling 400,000 square feet and is currently 66% leased, anchored by major life science tenants including Shire US, Inc., a subsidiary of Shire plc, and Merck, Sharp and Dohme, a subsidiary of Merck and Co., Inc. Additionally, King Street is currently seeking approvals for the joint venture to develop an additional 209,000 square feet of life science space on the campus.

Disposition and Loan Repayment Transactions
During the first quarter of 2017, we completed the following disposition and loan repayment transactions:
In January 2017, 2023, we sold fourtwo life science facilities in Salt Lake City, UtahDurham, North Carolina for $76$113 million.
•In January 2023, we closed a life science acquisition in Cambridge, Massachusetts for $9 million.
•In March 2023, we sold two MOBs for $32 million.
Financing Activities
•In January 2023, we completed a public offering of $400 million resultingaggregate principal amount of 5.25% senior unsecured notes due in a net gain on sale of $45 million.2032.
•In February 2017,2023, we soldreceived a hospital withinpartial principal repayment of $102 million on one secured loan with an original maturity of our DFLs in Palm Beach Gardens, Florida for $43January 2023. The remaining $48 million outstanding was refinanced with us, extending the maturity date to January 2024 and converting the current tenant and recognizedfixed interest rate on the loan to a gainvariable rate based on sale of $4 million.SOFR (as defined below) plus a margin.
•In March 2017,February 2023, we sold 64 senior housing triple-net assets, previously under triple-net leases with Brookdale, for $1.125 billion to affiliates of Blackstone Real Estate Partners VIII, L.P., resulting in a net gain on sale of $170 million.
In March 2017, we sold our aggregate £138.5 million par value Four Seasons senior notes (“Four Seasons Notes”) for £83 million ($101 million). The dispositionreceived full repayment of the Four Seasons Notes generated a £42outstanding balance of one $35 million ($51 million) gain on sale assecured loan.
•In April 2023, we received full repayment of the sales price was above the previously-impaired carrying valueoutstanding balance of £41one $14 million ($50 million). In addition, we sold our Four Seasons senior secured term loan at par plus accrued interest for £29 million ($35 million).loan.
Development Activities
•During the second quarter of 2017, we completedthree months ended March 31, 2023, the following disposition and loan repayment transactions:
In April 2017, we soldprojects were placed in service:(i) a land parcel in San Diego, California for $27 million andportion of one life science building in San Diego, California for $5 million.
In June 2017, we received £283redevelopment project with total costs of $43 million, ($367 million) from the repayment(ii) a portion of our HC-One Facility.
During the third quarterone life science development project with total costs of 2017, we sold two senior housing triple-net facilities for $15$32 million, and recognized a gain on sale(iii) one MOB redevelopment project with total costs of $5$8 million.
Financing Activities
During the nine months ended September 30, 2017, we had net repayments of $316 million on our revolving line of credit (the “Facility”) primarily using proceeds from the RIDEA II joint venture disposition, the sale of our Four Seasons Notes and the repayment of our HC-One Facility.
During the first quarter of 2017, we repaid our £137 million unsecured term loan (the “2012 Term Loan”) and $472 million of mortgage debt.
During the second quarter of 2017, we repaid $250 million of maturing senior unsecured notes and paid down £51 million of our £220 million unsecured term loan (the “2015 Term Loan”).
During the third quarter of 2017, we repurchased $500 million of our 5.375% senior notes due 2021 and recorded a $54 million loss on debt extinguishment.
On October 19, 2017, we terminated the Facility and entered into a new $2.0 billion unsecured revolving line of credit facility (the “New Facility”) maturing on October 19, 2021. Borrowings under the New Facility accrue interest at LIBOR plus a margin that depends on our credit ratings (1.00% initially). We pay a facility fee on the entire revolving commitment that depends on our credit ratings (0.20% initially). The New Facility contains two, six-month extension options and includes a feature that allows us to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments.
Developments and Redevelopments
As of May 2017, we have leased 100% of The Cove Phase I and Phase II.
During the nine months ended September 30, 2017, we added $169 million of new projects to our development and redevelopment pipelines including:
Commenced $22 million of redevelopment projects at two recently-acquired life science assets in the Sorrento Mesa submarket of San Diego.
Commenced a $40 million redevelopment of a medical office building located in the University City submarket in Philadelphia near the University of Pennsylvania.
Entered into a joint venture agreement and commenced development on a 111 unit senior housing facility in Otay Ranch, California (San Diego MSA) for $31 million. Our share of the total construction cost is approximately $28 million with an estimated completion in the second half of 2018.
Commenced development on a 79 unit senior housing facility in Waldwick, New Jersey (New York MSA) for $31 million. Our share of the total construction costs is approximately $26 million with an estimated completion in late 2018.

Commenced a $16 million development expansion project in the Sorrento Mesa submarket of San Diego, California.

Dividends
The following table summarizes our common stock cash dividends declared in 2017:2023:
Declaration DateRecord DateAmount
Per Share		Dividend
Payment Date
February 1February 9$0.30 February 23
April 27May 80.30 May 19
Declaration Date Record Date 
Amount
Per Share
 
Dividend
Payable Date
February 2 February 15 $0.37
 March 2
April 27 May 8 0.37
 May 23
July 27 August 7 0.37
 August 22
October 26 November 6 0.37
 November 21
Results of Operations
We evaluate our business and allocate resources among our reportable business segments: (i) senior housing triple-net;life science, (ii) senior housing operating portfolio (“SHOP”); (iii) life science; and (iv) medical office. Under the medical office, and (iii) CCRC.Under the life science and medical office segments, we invest through the acquisition, development, and developmentmanagement of medical office buildings (“MOBs”) and life science facilities, MOBs, and hospitals, which generally requirerequires a greater level of property management. Our senior housing facilitiesCCRCs are managed utilizing triple-net leases andoperated through RIDEA structures. We have other non-reportable segments that are comprised primarily ofof: (i) an interest in our U.K. care homes,unconsolidated SWF SH JV, (ii) loans receivable, and (iii) marketable debt investments and hospitals.securities. These non-reportable segments have been presented on an aggregate basis herein. We evaluate performance based upon (i) property adjusted net operating income from continuing operations (“Adjusted NOI” or “Cash NOI”) and (ii) Adjusted NOI (cash NOI) of the combined consolidated and unconsolidated investments in each segment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2 ofto the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 20162022 filed with the U.S. Securities and Exchange Commission (“SEC”), as updated by Note 2 to the Consolidated Financial Statements herein.
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Non-GAAP Financial Measures
Net Operating Income
NOI and Adjusted NOI are non-U.S. generally accepted accounting principles (“GAAP”) supplemental financial measures used to evaluate the operating performance of real estate. We include properties from our consolidated portfolio, as well as our pro-rata share of properties owned by our unconsolidated joint ventures, in our NOI and Adjusted NOI. We believe providing this information assists investors and analysts in estimating the economic interest in our total portfolio of real estate. Our pro-rata share information is prepared on a basis consistent with the comparable consolidated amounts, is intended to reflect our proportionate economic interest in the operating results of properties in our portfolio and is calculated by applying our actual ownership percentage for the period. We do not control the unconsolidated joint ventures, and the pro-rata presentations of revenues and expenses included in NOI (see below) do not represent our legal claim to such items. The joint venture members or partners are entitled to profit or loss allocations and distributions of cash flows according to the joint venture agreements, which provide for such allocations generally according to their invested capital.
The presentation of pro-rata information has limitations, which include, but are not limited to, the following: (i) the amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses and (ii) other companies in our industry may calculate their pro-rata interest differently, limiting the usefulness as a comparative measure. Because of these limitations, the pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the pro-rata financial information as a supplement.
NOI is defined as real estate revenues (inclusive of rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs,direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses; NOI excludes all other financial statement amounts included in net income (loss) as presented in Note 13 to the Consolidated Financial Statements. Management believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, non-refundable entrancetermination fees, net of entrance fee amortization and lease termination feesactuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense. The adjustments to NOI and resulting Adjusted NOI for SHOP have been restated for prior periods presented to conform to the current period presentationare calculated as NOI and Adjusted NOI from consolidated properties, plus our share of NOI and Adjusted NOI from unconsolidated joint ventures (calculated by applying our actual ownership percentage for the adjustmentperiod), less noncontrolling interests’ share of NOI and Adjusted NOI from consolidated joint ventures (calculated by applying our actual ownership percentage for the period). Management utilizes its share of NOI and Adjusted NOI in assessing its performance as we have various joint ventures that contribute to exclude the impactits performance. We do not control our unconsolidated joint ventures, and our share of deferred community fee incomeamounts from unconsolidated joint ventures do not represent our legal claim to such items. Our share of NOI and expense, resultingAdjusted NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, our financial information presented in recognition as cash is received and expenses are paid. accordance with GAAP.
Adjusted NOI is oftentimes referred to as “cash“Cash NOI.” Management believes NOI and Adjusted NOI are important supplemental measures because they provide relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and present them on an unlevered basis. We use NOI and Adjusted NOI to make decisions about resource allocations, to assess and

compare property level performance, and to evaluate our same property portfolioSame-Store (“SPP”SS”), performance, as described below. We believe that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as an alternative measuremeasures of operating performance to net income (loss) as defined by GAAP since it doesthey do not reflect various excluded items. Further, our definitiondefinitions of NOI and Adjusted NOI may not be comparable to the definitiondefinitions used by other REITs or real estate companies, as they may use different methodologies for calculating NOI and Adjusted NOI. For a reconciliation of NOI and Adjusted NOI to net income (loss) by segment, refer to Note 13 to the Consolidated Financial Statements.
Operating expenses generally relate to leased medical office and life science properties, and SHOPas well as CCRC facilities. We generally recover all or a portion of our leased medical office and life science property expenses through tenant recoveries. We present expenses as operating or general and administrative based on the underlying nature of the expense. Periodically, we review the classification of expenses between categories and make revisions based on changes in the underlying nature of the expenses.
Same Property PortfolioSame-Store
SPPSame-Store NOI and Adjusted (Cash) NOI information allows us to evaluate the performance of our property portfolio under a consistent population by eliminating changes in the composition of our portfolio of properties.properties, excluding properties within the other non-reportable segments. We include properties from our consolidated portfolio, as well as properties owned by our unconsolidated joint ventures in our SPPSame-Store NOI and Adjusted NOI (see NOI definition above for further discussion regarding our use of pro-rata share information and its limitations). SPPSame-Store NOI and Adjusted NOI exclude government grant income under the CARES Act. Same-Store Adjusted NOI also excludes (i)amortization of deferred revenue from tenant-funded improvements and certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis and (ii) entrance fees and related activity such as deferred expenses, reserves and management fees related to entrance fees. SPP NOI for properties that undergo a change in ownership is reported based on the current ownership percentage.basis.
Properties are included in our SPPSame-Store once they are stabilized for the full period in both comparison periods. Newly acquired operating assets are generally considered stabilized at the earlier of lease-up (typically when the tenant(s) control(s) the physical use of at least 80% of the space)space and rental payments have commenced) or 12 months from the acquisition date. Newly completed developments and redevelopments are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service. Properties that experience a change in reporting structure such as a transition from a triple-net lease to a RIDEA reporting structure, are considered stabilized after 12 months in operations under a consistent reporting structure. A property is removed from our SPPSame-Store when it is classified as held for sale, sold, placed into redevelopment, experiences a casualty event that significantly impacts operations, or changes itsa change in reporting structure (such as triple-netor operator transition has been agreed to, SHOP).
or a significant tenant relocates from a Same-Store property to a non Same-Store property and that change results in a corresponding increase in revenue. We do not report Same-Store metrics for our other non-reportable segments. For a reconciliation of SPPSame-Store to total portfolio Adjusted NOI and other relevant disclosures by segment, refer to our Segment Analysis below.
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Funds From Operations (“FFO”)
FFO encompasses Nareit FFO and FFO as Adjusted, each of which is described in detail below. We believe FFO applicable to common shares, diluted FFO applicable to common shares, and diluted FFO per common share are important supplemental non-GAAP measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets utilizes straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the REIT industry to address this issue.
Nareit FFO. FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”Nareit”), is net income (loss) applicable to common shares (computed in accordance with GAAP), excluding gains or losses from sales of depreciable property, including any current and deferred taxes directly associated with sales of depreciable property, impairments of, or related to, depreciable real estate, plus real estate and other real estate-related depreciation and amortization, and adjustments to compute our share of Nareit FFO and FFO as adjustedAdjusted (see below) from joint ventures. Adjustments for joint ventures are calculated to reflect our pro-ratapro rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of Nareit FFO for unconsolidated joint ventures by applying ouractual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share forFor consolidated joint ventures in which we do not own 100%, we reflect our share of the equity by adjusting our Nareit FFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods. Our pro-ratapro rata share information is prepared on a basis consistent with the comparable consolidated amounts, is intended to reflect our proportionate economic interest in the operating results of properties in our portfolio and is calculated by applying our actual ownership percentage for the period. We do not control the unconsolidated joint ventures, and the pro-ratapro rata presentations of reconciling items included in Nareit FFO (see above) do not represent our legal claim to such items. The joint venture members or partners are entitled to profit or loss allocations and distributions of cash flows according to the joint venture agreements, which provide for such allocations generally according to their invested capital. See NOI above
The presentation of pro rata information has limitations, which include, but are not limited to, the following: (i) the amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses and (ii) other companies in our industry may calculate their pro rata interest differently, limiting the usefulness as a comparative measure. Because of these limitations, the pro rata financial information should not be considered independently or as a substitute for further discussion regarding our use of pro-rata sharefinancial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the pro rata financial information and its limitations.as a supplement.
Nareit FFO does not represent cash generated from operating activities in accordance with GAAP, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income (loss). We compute Nareit FFO in accordance

with the current NAREITNareit definition; however, other REITs may report Nareit FFO differently or have a different interpretation of the current NAREITNareit definition from ours.
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Table of Contents
FFO as Adjusted. In addition, we present Nareit FFO on an adjusted basis before the impact of non-comparable items including, but not limited to, casualty-related charges (recoveries), severance and related charges, litigation costs, preferred stock redemption charges,transaction-related items, other impairments (recoveries) of non-depreciable assets,and other losses (gains), restructuring and severance-related charges, prepayment costs (benefits) associated with early retirement or payment of debt, foreign currency remeasurement losses (gains)litigation costs (recoveries), casualty-related charges (recoveries), deferred tax asset valuation allowances, and transaction-related itemschanges in tax legislation (“FFO as adjusted”Adjusted”). These adjustments are net of tax, when applicable. Transaction-related items include transaction expenses and gains/charges incurred as a result of mergers and acquisitions and lease amendment or termination activities. Prepayment costs (benefits) associated with early retirement of debt include the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of debt. Transaction-related itemsOther impairments (recoveries) and other losses (gains) include expensed acquisitioninterest income associated with early and pursuit costspartial repayments of loans receivable and gains/charges incurred as a result of mergersother losses or gains associated with non-depreciable assets including goodwill, DFLs, undeveloped land parcels, and acquisitions and lease amendment or termination activities.loans receivable. Management believes that FFO as adjustedAdjusted provides a meaningful supplemental measurement of our FFO run-rate and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. At the same time that NAREITNareit created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors, and financial analysts who review our operating performance are best served by an FFO run-rate earnings measure that includes certain other adjustments to net income (loss), in addition to adjustments made to arrive at the NAREITNareit defined measure of FFO, other adjustments to net income (loss).FFO. FFO as adjustedAdjusted is used by management in analyzing our business and the performance of our properties and we believe it is important that stockholders, potential investors, and financial analysts understand this measure used by management. We use FFO as adjustedAdjusted to: (i) evaluate our performance in comparison with expected results and results of previous periods, relative to resource allocation decisions, (ii) evaluate the performance of our management, (iii) budget and forecast future results to assist in the allocation of resources, (iv) assess our performance as compared with similar real estate companies and the industry in general, and (v) evaluate how a specific potential investment will impact our future results. Other REITs or real estate companies may use different methodologies for calculating an adjusted FFO measure, and accordingly, our FFO as adjustedAdjusted may not be comparable to those reported by other REITs. For a reconciliation of net income (loss) to Nareit FFO and FFO as adjustedAdjusted and other relevant disclosure, refer to “Non-GAAP Financial Measures Reconciliations” below.

Funds Available for DistributionAdjusted FFO (“FAD”AFFO”)
FAD. AFFO is defined as FFO as adjustedAdjusted after excluding the impact of the following: (i) stock-based compensation amortization of acquired market lease intangibles, net,expense, (ii) amortization of deferred compensation expense, (iii) amortization of deferred financing costs, net, (iv)(iii) straight-line rents, (iv) deferred income taxes, (v) amortization of above (below) market lease intangibles, net and (vi) other AFFO adjustments, which include: (a) non-cash interest and depreciation related to DFLs and lease incentive amortization (reduction of straight-line rents), (b) actuarial reserves for insurance claims that have been incurred but not reported, and (vi)(c) amortization of deferred revenues, excluding amounts amortized into rental income that are associated with tenant funded improvements owned/recognized by us and up-front cash payments made by tenants to reduce their contractual rents. Also, FAD: (i)AFFO is computed after deducting recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements, and (ii) includes lease restructure payments and adjustments to compute our share of FADAFFO from our unconsolidated joint ventures and those related to CCRC non-refundable entrance fees. Certain amounts in the “Non-GAAP Financial Measures Reconciliation” below for FAD have been reclassified for prior periods to conform to the current period presentation. ventures.More specifically, we have combined wholly-owned and our share from unconsolidated joint ventures recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements (previously reported(“AFFO capital expenditures”) excludes our share from unconsolidated joint ventures (reported in “other”“other AFFO adjustments”) into a single line item. In addition, we have combined cash CCRC JV entrance fees with CCRC JV entrance fee amortization into a single line item, separately disclosed deferred income taxes (previously reported in “other”) and collapsed immaterial line items into ‘other’. Adjustments for joint ventures are calculated to reflect our pro-ratapro rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of FADAFFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated joint ventures in which we do not own 100% of the equity by adjusting our FADAFFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods (see(reported in “other AFFO adjustments”). See FFO above for further disclosure regarding our use of pro-ratapro rata share information and its limitations). Other REITs or real estate companies may use different methodologies for calculating FAD, and accordingly, our FAD may not be comparable to those reported by other REITs. Although our FAD computation may not be comparable to that of other REITs, management believes FAD provides a meaningful supplemental measure of our performance and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT.limitations. We believe FADAFFO is an alternative run-rate earnings measure that improves the understanding of our operating results among investors and makes comparisons with: (i) expected results, (ii) results of previous periods, and (iii) results among REITSREITs more meaningful. FADAFFO does not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as it excludes the following items which generally flow through our cash flows from operating activities: (i) adjustments for changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, (ii) transaction-related costs, (iii) litigation settlement expenses, and (iv) restructuring and severance-related expenses and (v) actual cash receipts from interest income recognized on loans receivable (in contrast to our FAD adjustment to exclude non-cash interest and depreciation related to our investments in direct financing leases).charges. Furthermore, FADAFFO is adjusted for recurring capital expenditures, which are generally not considered when determining cash flows from operations or liquidity. FADOther REITs or real estate companies may use different methodologies for calculating AFFO, and accordingly, our AFFO may not be comparable to those reported by other REITs. Management believes AFFO provides a meaningful supplemental measure of our performance and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT, and by presenting AFFO, we are assisting these parties in their evaluation. AFFO is a non-GAAP supplemental financial measure and should not be considered as an alternative to net income (loss) determined in accordance with GAAP and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP. For a reconciliation of net income (loss) to FADAFFO and other relevant disclosure,disclosures, refer to “Non-GAAP Financial Measures Reconciliations” below.
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Comparison of the Three and Nine Months Ended September 30, 2017March 31, 2023 to the Three and Nine Months Ended September 30, 2016March 31, 2022
Overview(1)
Three Months Ended September 30, 2017 and 2016
The following table summarizes results for the three months ended September 30, 2017March 31, 2023 and 2016 (dollars in thousands, except per share data)2022 (in thousands):
 Three Months Ended March 31,
 20232022Change
Net income (loss) applicable to common shares$117,698 $69,637 $48,061 
Nareit FFO228,101 243,431 (15,330)
FFO as Adjusted229,541 234,818 (5,277)
AFFO207,659 202,033 5,626 

 Three Months Ended  Three Months Ended   
 September 30, 2017 September 30, 2016 
 Amount Diluted Per Share Amount Diluted Per Share Per Share Change
Net income (loss) applicable to common shares$(7,788) $(0.02) $150,924
 $0.32
 $(0.34)
FFO155,248
 0.33
 304,387
 0.65
 (0.32)
FFO as adjusted227,769
 0.48
 336,513
 0.72
 (0.24)
FAD202,407
   317,540
    
(1)For the reconciliation of non-GAAP financial measures, see “Non-GAAP Financial Measure Reconciliations” below.
Net income (loss) applicable to common shares (“EPS”) decreasedincreased primarily as a result of the following:
•an increase in gains on sale of depreciable real estate related to higher gains recognized on life science and MOB asset sales during the first quarter of 2023 as compared to 2022;
•an increase in NOI generated from our life science and medical office segments related to: (i) development and redevelopment projects placed in service during 2022 and 2023, (ii) new leasing activity during 2022 and 2023 (including the impact to straight-line rents), and (iii) 2022 acquisitions of real estate.
•a reductiondecrease in expenses incurred for tenant relocation and other costs associated with the demolition of an MOB; and
•a decrease in loan loss reserves primarily due to principal repayments on seller financing, partially offset by increased interest rates on variable rate loans.
The increase in net income from discontinued(loss) applicable to common shares was partially offset by:
•a gain on sale associated with the disposition of a hospital under a direct financing lease (“DFL”) in 2022;
•an increase in interest expense, primarily as a result of: (i) higher interest rates under the commercial paper program, (ii) borrowings under the Term Loan Facilities, which were drawn during the fourth quarter of 2022, and (iii) senior unsecured notes issued during the first quarter of 2023;
•an increase in noncontrolling interests’ share in continuing operations dueas a result of a gain on sale of an MOB in a consolidated partnership that was sold in 2023;
•a decrease in NOI related to the spinoffwrite-off of QCP on October 31, 2016;the straight-line rent receivable balance that was no longer probable of collection associated with a life science tenant that commenced voluntary reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code;

•a decrease in government grant income received under the CARES Act in 2023;
a loss on debt extinguishment, representing a premium for early payment on the repurchase of our senior notes,•an increase in July 2017;
a reduction of NOItransaction costs, primarily as a result of the sale of 64 senior housing triple-net assets;expenses incurred in connection with our reorganization to an UPREIT structure in 2023; and
a reduction•an increase in resident fees and services, partially offset by a reduction in operating expenses, due to the partial sale and deconsolidation of RIDEA II during the first quarter of 2017;
impairments related to (i) our mezzanine loan facility to Tandem Health Care (the “Tandem Mezzanine Loan”) and (ii) 11 underperforming senior housing triple-net facilities in the third quarter of 2017;
casualty-related charges due to hurricanes in the third quarter of 2017; and
a reduction in interest income due to the payoff of: (i) our HC-One Facility in June 2017 and (ii) a participating development loan during the third quarter of 2016.
The decrease in EPS was partially offset by:
a reduction in interest expensedepreciation, primarily as a result of debt repaymentsof: (i) development and redevelopment projects placed in the fourth quarter of 2016service during 2022 and year-to-date 2017;
a reduction in severance2023 and related charges primarily related to the departure of our former President and Chief Executive Officer in the third quarter of 2016 compared to severance and related charges primarily related to the departure of our former Executive Vice President and Chief Accounting Officer in the third quarter of 2017; and
a net gain on sales(ii) 2022 acquisitions of real estate during the third quarter of 2017 compared to no sales during the third quarter of 2016.estate.
Nareit FFO decreased primarily as a result of the aforementioned events impacting EPS,net income (loss) applicable to common shares, except for the following, which are excluded from Nareit FFO:
•gain on sales of depreciable real estateestate; and impairments
•depreciation and amortization expense.
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Table of real estate, which are excluded from FFO.Contents
FFO as adjusted Adjusteddecreased primarily as a result of the aforementioned events impacting Nareit FFO, except for the following, which are excluded from FFO as adjusted:Adjusted:
•the gain on sale of a hospital under a DFL;
•the expenses for tenant relocation and other costs associated with the demolition of an MOB;
•loan loss on debt extinguishment from the repurchase of our senior notes in July 2017;reserves; and
casualty-related charges due to hurricanes in the third quarter of 2017; partially offset by•transaction costs.
a reduction in severance and related charges; and
an impairment related to our Tandem Mezzanine Loan in the third quarter of 2017.
Beginning in the third quarter of 2017, casualty-related charges (recoveries), net are excluded from FFO as adjusted.
FAD decreasedAFFO increased primarily as a result of the aforementioned events impacting FFO as adjusted and increased leasing costs and tenant capital improvements.
Nine Months Ended September 30, 2017 and 2016
The following table summarizes results for the nine months ended September 30, 2017 and 2016 (dollars in thousands, except per share data):
 Nine Months Ended Nine Months Ended  
 September 30, 2017 September 30, 2016 
 Amount Diluted Per Share Amount Diluted Per Share Per Share Change
Net income (loss) applicable to common shares$472,311
 $1.01
 $568,109
 $1.22
 $(0.21)
FFO608,162
 1.30
 956,864
 2.05
 (0.75)
FFO as adjusted692,726
 1.47
 1,006,166
 2.15
 (0.68)
FAD621,109
   964,437
    
EPS decreased primarily as a result of the following:
a reduction in net income from discontinued operations due to the spinoff of QCP on October 31, 2016;
a loss on debt extinguishment, representing a premium for early payment on the repurchase of our senior notes, in July 2017;
a reduction of NOI primarily as a result of the sale of 64 senior housing triple-net assets, and property sales in our life science and medical office segments;

a reduction in resident fees and services, partially offset by a reduction in operating expenses, due to the partial sale and deconsolidation of RIDEA II during the first quarter of 2017;
impairments of our Tandem Mezzanine Loan in the second and third quarter of 2017;
impairments related to 11 underperforming senior housing triple-net facilities in the third quarter of 2017;
casualty-related charges due to hurricanes in the third quarter of 2017; and
a reduction in interest income due to the payoff of three participating development loans during the second and third quarters of 2016.
The decrease in EPS was partially offset by the following:
an increased net gain on sales of real estate during the first three quarters of 2017 compared to the first three quarters of 2016;
a reduction in interest expense as a result of debt repayments during the second half of 2016 and year-to-date 2017;
a gain on sale of our Four Seasons Notes in the first quarter of 2017;
increased NOI from our 2016 acquisitions, developments placed in service, and annual rent escalations;
decreased depreciation and amortization expense as a result of the sale of 64 senior housing triple-net assets and the deconsolidation of RIDEA II during the first quarter of 2017, partially offset by depreciation and amortization of assets acquired during 2016 and year-to-date 2017;
a reduction in severance and related charges primarily related to the departure of our former President and Chief Executive Officer in the third quarter of 2016 compared to severance and related charges primarily related to the departure of our former Executive Vice President and Chief Accounting Officer in the third quarter of 2017; and
increased tax benefit primarily associated with state built-in gain tax for the disposition of certain real estate assets during 2016 and from the sale of a 40% interest in RIDEA II in 2017.
FFO decreased primarily as a result of the aforementioned events impacting EPS, except for depreciation and amortization, gain on sales of real estate and impairments of real estate, which are excluded from FFO.
FFO as adjusted decreased primarily as a result of the aforementioned events impacting FFO,Adjusted, except for the followingimpact of straight-line rents, which areis excluded from FFO as adjusted:
a loss on debt extinguishment from the repurchase of our senior notes in July 2017;
impairments of our Tandem Mezzanine Loan in the second and third quarter of 2017; and
casualty-related charges due to hurricanes in the third quarter of 2017; partially offset by
a reduction in severance and related charges; and
gain on sale of our Four Seasons Notes in the first quarter of 2017.
FAD decreased primarily as a result of the aforementioned events impacting FFO as adjusted, increased leasing costs and tenant capital improvements, and lower lease restructure payments.AFFO.
Segment Analysis 
The following tables below provide selected operating information for our SPPSame-Store and total property portfolio for each of our businessreportable segments. Our SPP forFor the three months ended September 30, 2017March 31, 2023, our Same-Store consists of 729 properties representing properties acquired or placed in service and stabilized on or prior to July 1, 2016 and that remained in operation under a consistent reporting structure through September 30, 2017. Our SPP for the nine months ended September 30, 2017 consists of 721408 properties representing properties acquired or placed in service and stabilized on or prior to January 1, 20162022 and that remained in operationoperations under a consistent reporting structure through September 30, 2017.March 31, 2023. Our total property portfolio consistsconsisted of 818476 and 881483 properties at September 30, 2017March 31, 2023 and 2016, respectively, excluding properties2022, respectively. Included in the Spin-Off.our total property portfolio at each of March 31, 2023 and 2022 are 19 senior housing assets in our SWF SH JV.

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Senior Housing Triple-Net
Table of Contents
Life Science
The following table summarizes results at and for the three months ended September 30, 2017March 31, 2023 and 20162022 (dollars and square feet in thousands, except per unitsquare foot data):
 SPP Total Portfolio
 Three Months Ended September 30, Three Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$76,588
 $74,306
 $2,282
 $77,220
 $104,262
 $(27,042)
Operating expenses(188) (160) (28) (934) (1,794) 860
NOI76,400
 74,146
 2,254
 76,286
 102,468
 (26,182)
Adjustments to NOI(252) (10) (242) (600) (1,003) 403
Adjusted NOI$76,148
 $74,136
 $2,012
 75,686
 101,465
 (25,779)
Non-SPP adjusted NOI 
  
  
 462
 (27,329) 27,791
SPP adjusted NOI 
  
  
 $76,148
 $74,136
 $2,012
Adjusted NOI % change 
  
 2.7%  
  
  
Property count(2)
201
 201
  
 204
 292
  
Average capacity (units)(3)
20,041
 20,054
  
 20,311
 28,378
  
Average annual rent per unit$15,236
 $14,819
  
 $15,089
 $14,555
  
 SS
Total Portfolio(1)
 Three Months Ended March 31,Three Months Ended March 31,
 20232022Change20232022Change
Rental and related revenues$164,370 $161,019 $3,351 $205,464 $194,055 $11,409 
Healthpeak’s share of unconsolidated joint venture total revenues1,836 2,021 (185)2,165 1,431 734 
Noncontrolling interests’ share of consolidated joint venture total revenues(31)(32)1 (143)(57)(86)
Operating expenses(47,295)(39,627)(7,668)(57,566)(48,189)(9,377)
Healthpeak’s share of unconsolidated joint venture operating expenses(869)(561)(308)(1,182)(483)(699)
Noncontrolling interests’ share of consolidated joint venture operating expenses10 10 — 40 19 21 
Adjustments to NOI(2)
282 (11,531)11,813 (832)(14,112)13,280 
Adjusted NOI$118,303 $111,299 $7,004 147,946 132,664 15,282 
Less: non-SS Adjusted NOI   (29,643)(21,365)(8,278)
SS Adjusted NOI   $118,303 $111,299 $7,004 
Adjusted NOI % change  6.3 %   
Property count(3)
120 120  147 149  
End of period occupancy98.2 %98.6 %98.4 %98.5 %
Average occupancy98.5 %98.3 % 98.6 %98.2 % 
Average occupied square feet9,115 9,091  10,455 10,737  
Average annual total revenues per occupied square foot(4)
$74 $67  $80 $68  
Average annual base rent per occupied square foot(5)
$55 $52  $60 $52  

(1)    Total Portfolio includes results of operations from disposed properties through the disposition date.
(1)Represents rental and related revenues and income from DFLs.
(2)From our 2016 presentation of SPP, we removed 73 senior housing properties from SPP that were sold, three senior housing properties that were classified as held for sale, and 15 senior housing properties that we transitioned
(2)Represents adjustments to SHOP.
(3)Represents average capacity as reported by the respective tenants or operators for the 12-month period and a quarter in arrears from the periods presented.
SPP adjusted NOI increased primarily as a resultin accordance with our definition of the following:
annual rent escalations; and
higher cash rent received from our portfolioAdjusted NOI. Refer to “Non-GAAP Financial Measures” above for definitions of assets leased to Sunrise Senior Living. 
Total Portfolio NOI and Adjusted NOI decreased primarily asNOI. See Note 13 to the Consolidated Financial Statements for a resultreconciliation of the following Non-SPP impacts:
senior housing triple-net facilities sold during 2016 and 2017; and
the transfer of 21 senior housing triple-net facilities to our SHOP segment, of which 18 were transitioned to a RIDEA structure during the fourth quarter of 2016 and year-to-date 2017.
The decrease to Total Portfolio NOI and Adjusted NOI is partially offset by the aforementioned increasessegment to SPP.net income (loss).
The following table summarizes results at(3)From our first quarter 2022 presentation of Same-Store, we added: (i) five stabilized acquisitions, (ii) three stabilized facilities that previously experienced a significant tenant relocation, (iii) two stabilized redevelopments placed in service, and for the(iv) one stabilized development placed in service, and we removed: (i) nine months ended September 30, 2017facilities that were placed into redevelopment, (ii) two facilities that were sold, and 2016 (dollars(iii) one facility that experienced a significant tenant relocation.
(4)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).
(5)Base rent does not include tenant recoveries, additional rents in thousands, except per unit data):excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).
 SPP Total Portfolio
 Nine Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$224,872
 $220,775
 $4,097
 $255,332
 $319,989
 $(64,657)
Operating expenses(470) (483) 13
 (2,927) (5,521) 2,594
NOI224,402
 220,292
 4,110
 252,405
 314,468
 (62,063)
Adjustments to NOI(1,345) (5,585) 4,240
 (2,844) (8,464) 5,620
Adjusted NOI$223,057
 $214,707
 $8,350
 249,561
 306,004
 (56,443)
Non-SPP adjusted NOI 
  
  
 (26,504) (91,297) 64,793
SPP adjusted NOI 
  
  
 $223,057
 $214,707
 $8,350
Adjusted NOI % change    3.9%  
  
  
Property count(2)
196
 196
   204
 292
  
Average capacity (units)(3)
19,643
 19,655
   22,409
 28,863
  
Average annual rent per unit$15,173
 $14,598
   $15,023
 $14,391
  

(1)Represents rental and related revenues and income from DFLs.
(2)From our 2016 presentation of SPP, we removed 73 senior housing properties from SPP that were sold, three senior housing properties that were classified as held for sale, and 15 senior housing properties that we transitioned to SHOP.
(3)Represents average capacity as reported by the respective tenants or operators for the 12-month period and a quarter in arrears from the periods presented.

SPPSame-Store Adjusted NOI increased primarily as a result of the following:
•annual rent escalations; and
•new leasing activity; partially offset by
•higher cash rent received from our portfolio of assets leased to Sunrise Senior Living.operating expenses.
Total Portfolio NOI and Adjusted NOI decreasedincreased primarily as a result of the aforementioned impacts to Same-Store and the following Non-SPPNon-Same-Store impacts:
senior housing triple-net facilities sold during 2016•increased NOI from developments and 2017;redevelopments placed in service in 2022 and
the transfer of 21 senior housing triple-net facilities to our SHOP segment, of which 18 were transitioned to a RIDEA structure during the fourth quarter of 2016 and year-to-date 2017.
The decrease to Total Portfolio NOI and Adjusted NOI is 2023; partially offset by (i) increased non-SPP income
•decreased NOI from five senior housing triple-net facilities acquired in the first quarterour 2023 dispositions.
42
Table of 2016 and (ii) the aforementioned increases to SPP.Contents
Senior Housing Operating Portfolio
Medical Office
The following table summarizes results at and for the three months ended September 30, 2017March 31, 2023 and 20162022 (dollars and square feet in thousands, except per unitsquare foot data):
 SPP Total Portfolio
 Three Months Ended September 30, Three Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$89,386
 $89,274
 $112
 $126,040
 $170,739
 $(44,699)
HCP share of unconsolidated JV revenues77,932
 75,534
 2,398
 81,936
 50,973
 30,963
Operating expenses(57,058) (57,796) 738
 (86,821) (121,502) 34,681
HCP share of unconsolidated JV operating expenses(64,688) (63,132) (1,556) (65,035) (42,463) (22,572)
NOI45,572
 43,880
 1,692
 56,120
 57,747
 (1,627)
Adjustments to NOI200
 (406) 606
 4,551
 4,081
 470
Adjusted NOI$45,772
 $43,474
 $2,298
 60,671
 61,828
 (1,157)
Non-SPP adjusted NOI 
  
  
 (14,899) (18,354) 3,455
SPP adjusted NOI 
  
  
 $45,772
 $43,474
 $2,298
Adjusted NOI % change 
  
 5.3%  
  
  
Property count(2)
122
 122
  
 158
 145
  
Average capacity (units)(3)
22,105
 16,761
  
 25,678
 23,575
  
Average annual rent per unit$50,847
 $49,678
  
 $52,667
 $56,895
  
 SS
Total Portfolio(1)
 Three Months Ended March 31,Three Months Ended March 31,
 20232022Change20232022Change
Rental and related revenues$167,900 $161,930 $5,970 $186,967 $176,095 $10,872 
Income from direct financing leases— — — — 1,168 (1,168)
Healthpeak’s share of unconsolidated joint venture total revenues722 709 13 745 732 13 
Noncontrolling interests’ share of consolidated joint venture total revenues(8,447)(8,275)(172)(8,963)(8,820)(143)
Operating expenses(56,493)(53,500)(2,993)(64,398)(61,170)(3,228)
Healthpeak’s share of unconsolidated joint venture operating expenses(306)(299)(7)(305)(299)(6)
Noncontrolling interests’ share of consolidated joint venture operating expenses2,428 2,421 7 2,595 2,602 (7)
Adjustments to NOI(2)
(3,072)(3,902)830 (3,821)(3,546)(275)
Adjusted NOI$102,732 $99,084 $3,648 112,820 106,762 6,058 
Less: non-SS Adjusted NOI   (10,088)(7,678)(2,410)
SS Adjusted NOI   $102,732 $99,084 $3,648 
Adjusted NOI % change  3.7 %   
Property count(3)
273 273  295 300  
End of period occupancy91.3 %91.7 %89.8 %90.2 %
Average occupancy91.2 %91.7 % 89.8 %90.3 % 
Average occupied square feet20,228 20,297  21,550 21,751  
Average annual total revenues per occupied square foot(4)
$34 $32  $35 $33  
Average annual base rent per occupied square foot(5)
$27 $26  $28 $27  

(1)Total Portfolio includes results of operations from disposed properties through the disposition date.
(1)Represents resident fees and services.
(2)From our past presentation of SPP, we have recast the components of SPP
(2)Represents adjustments to reflect our retained 40% equity interest in RIDEA II within HCP share of unconsolidated JV revenues and operating expenses resulting from our deconsolidation of RIDEA II during the first quarter of 2017. Our 2016 total portfolio property count has been adjusted to include two properties classified as held for sale as of September 30, 2016.
(3)Represents average capacity as reported by the respective tenants or operators for the 12-month period and a quarter in arrears from the periods presented.
SPP NOI in accordance with our definition of Adjusted NOI. Refer to “Non-GAAP Financial Measures” above for definitions of NOI and Adjusted NOI. See Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).
(3)From our first quarter 2022 presentation of Same-Store, we added: (i) 25 stabilized acquisitions and (ii) 2 stabilized redevelopments placed in service, and we removed: (i) 2 MOBs that were sold and (ii) 1 MOB that was placed into redevelopment.
(4)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues).
(5)Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues).
Same-Store Adjusted NOI increased primarily as a result of the following:
increased rates for resident fees•mark-to-market lease renewals;
•annual rent escalations; and service
•higher parking income and lower expense growth; partially offset by
occupancy declines.percentage-based rents.
Total Portfolio NOI and Adjusted NOI decreased primarily as a result of the following:
decreased non-SPP income from our partial sale of RIDEA II; partially offset by
non-SPP income for 21 senior housing triple-net assets transferred to SHOP during the fourth quarter of 2016 and year-to-date 2017; and
the aforementioned increases to SPP.



The following table summarizes results at and for the nine months ended September 30, 2017 and 2016 (dollars in thousands, except per unit data):
 SPP Total Portfolio
 Nine Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$271,301
 $268,663
 $2,638
 $391,684
 $500,704
 $(109,020)
HCP share of unconsolidated JV revenues231,604
 225,093
 6,511
 239,667
 152,424
 87,243
Operating expenses(172,414) (170,467) (1,947) (267,226) (350,949) 83,723
HCP share of unconsolidated JV operating expenses(190,843) (185,368) (5,475) (190,049) (125,244) (64,805)
NOI139,648
 137,921
 1,727
 174,076
 176,935
 (2,859)
Adjustments to NOI3
 (1,693) 1,696
 12,229
 14,648
 (2,419)
Adjusted NOI$139,651
 $136,228
 $3,423
 186,305
 191,583
 (5,278)
Non-SPP adjusted NOI 
  
  
 (46,654) (55,355) 8,701
SPP adjusted NOI 
  
  
 $139,651
 $136,228
 $3,423
Adjusted NOI % change    2.5%  
  
  
Property count(2)
121
 121
   158
 145
  
Average capacity (units)(3)
21,643
 16,631
   25,683
 23,447
  
Average annual rent per unit$51,620
 $49,519
   $53,385
 $55,632
  

(1)Represents rental and related revenues.
(2)From our past presentation of SPP, we have recast the components of SPP to reflect our retained 40% equity interest in RIDEA II within HCP share of unconsolidated JV revenues and operating expenses resulting from our deconsolidation of RIDEA II during the first quarter of 2017. Our 2016 total portfolio property count has been adjusted to include two properties classified as held for sale as of September 30, 2016.
(3)Represents average capacity as reported by the respective tenants or operators for the 12-month period and a quarter in arrears from the periods presented.
SPP NOI and Adjusted NOI increased primarily as a result of the following:aforementioned increases to Same-Store and the following Non-Same-Store impacts:
•increased rates for resident feesNOI from our 2022 acquisitions; and services;
•increased occupancy in former redevelopment and development properties that have been placed in service; partially offset by
higher expense growth and a decline in occupancy.
Total Portfolio•decreased NOI and Adjusted NOI decreased primarily as a result of the following:
decreased non-SPP income from our partial sale2022 and 2023 dispositions.
43
Table of RIDEA II; partially offset byContents
non-SPP income for 21 senior housing triple-net assets transferred to SHOP during the fourth quarter of 2016 and year-to-date 2017; andContinuing Care Retirement Community
the aforementioned increases to SPP.

Life Science
The following table summarizes results at and for the three months ended September 30, 2017March 31, 2023 and 20162022 (dollars and square feet in thousands, except per square footunit data):
 SPP Total Portfolio
 Three Months Ended September 30, Three Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$76,259
 $73,515
 $2,744
 $90,174
 $90,847
 $(673)
HCP share of unconsolidated JV revenues2,002
 1,904
 98
 2,031
 1,929
 102
Operating expenses(16,453) (14,970) (1,483) (19,960) (18,487) (1,473)
HCP share of unconsolidated JV operating expenses(433) (406) (27) (433) (406) (27)
NOI61,375
 60,043
 1,332
 71,812
 73,883
 (2,071)
Adjustments to NOI1,545
 453
 1,092
 (751) (314) (437)
Adjusted NOI$62,920
 $60,496
 $2,424
 71,061
 73,569
 (2,508)
Non-SPP adjusted NOI 
  
  
 (8,141) (13,073) 4,932
SPP adjusted NOI 
  
  
 $62,920
 $60,496
 $2,424
Adjusted NOI % change 
  
 4.0%  
  
  
Property count(2)
112
 112
  
 131
 133
  
Average occupancy96.6% 97.6%  
 96.9% 96.8%  
Average occupied square feet6,395
 6,457
  
 7,143
 7,675
  
Average annual total revenues per occupied square foot$51
 $48
  
 $52
 $48
  
Average annual base rent per occupied square foot$41
 $39
  
 $43
 $40
  
 SSTotal Portfolio
 Three Months Ended March 31,Three Months Ended March 31,
 20232022Change20232022Change
Resident fees and services$127,084 $121,560 $5,524 $127,084 $121,560 $5,524 
Government grant income(1)
— — — 137 6,552 (6,415)
Healthpeak’s share of unconsolidated joint venture government grant income— — — — 333 (333)
Operating expenses(100,678)(97,398)(3,280)(101,124)(97,888)(3,236)
Adjustments to NOI(2)
50 — 50 50 — 50 
Adjusted NOI$26,456 $24,162 $2,294 26,147 30,557 (4,410)
Plus (less): non-SS adjustments   309 (6,395)6,704 
SS Adjusted NOI   $26,456 $24,162 $2,294 
Adjusted NOI % change  9.5  %   
Property count(3)
15 15  15 15  
Average occupancy(4)
83.1 %80.9 %83.1 %80.9 %
Average occupied units(5)
5,908 5,939  5,908 5,939  
Average annual rent per occupied unit$86,042 $81,872  $86,135 $86,506  

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations.
(1)Represents rental and related revenues and tenant recoveries.
(2)From our past presentation
(2)Represents adjustments to NOI in accordance with our definition of Adjusted NOI. Refer to “Non-GAAP Financial Measures” above for definitions of SPP for the three months ended September 30, 2016, we removed four life science facilities that were classified as held for sale and a facility that was sold. Our 2016 total portfolio property count has been adjusted to include seven properties in development and eight properties classified as held for sale as of September 30, 2016.
SPP NOI and adjustedAdjusted NOI. See Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI increased primarily as a resultby segment to net income (loss).
(3)From our first quarter 2022 presentation of the following:Same-Store, no properties were added or removed.
new leasing activity; and
specific to adjusted NOI, annual rent escalations.
(4)The Total Portfolio NOI and adjusted NOI decreasedSame-Store increase in average occupancy for the period is primarily asdue to a result of the following impacts to Non-SPP:
decreased income from the sale of life science facilities in 2016 and 2017; partially offset by
increased income from (i) increased occupancy in portions of a development placed in operations in 2016 and 2017 and (ii) life science acquisitions in 2016 and 2017.
The decrease in Total Portfolio NOI and adjusted NOI was also partially offsetavailable units from decommissioned senior nursing facility beds.
(5)Represents average occupied units as reported by the aforementioned increases to SPP. 

The following table summarizes results at andoperators for the nine months ended September 30, 2017 and 2016 (dollars and square feet in thousands, except per square foot data):three-month period.
 SPP Total Portfolio
 Nine Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$226,803
 $217,906
 $8,897
 $262,224
 $269,994
 $(7,770)
HCP share of unconsolidated JV revenues5,890
 5,569
 321
 5,975
 5,628
 347
Operating expenses(46,770) (42,890) (3,880) (56,024) (53,191) (2,833)
HCP share of unconsolidated JV operating expenses(1,234) (1,180) (54) (1,234) (1,173) (61)
NOI184,689
 179,405
 5,284
 210,941
 221,258
 (10,317)
Adjustments to NOI3,055
 890
 2,165
 (1,094) (1,545) 451
Adjusted NOI$187,744
 $180,295
 $7,449
 209,847
 219,713
 (9,866)
Non-SPP adjusted NOI 
  
  
 (22,103) (39,418) 17,315
SPP adjusted NOI 
  
  
 $187,744
 $180,295
 $7,449
Adjusted NOI % change 
  
 4.1%  
  
  
Property count(2)
112
 112
  
 131
 133
  
Average occupancy96.6% 97.8%  
 96.5% 97.6%  
Average occupied square feet6,391
 6,466
  
 7,032
 7,651
  
Average annual total revenues per occupied square foot$50
 $47
  
 $52
 $48
  
Average annual base rent per occupied square foot$41
 $38
  
 $43
 $39
  

(1)Represents rental and related revenues and tenant recoveries.
(2)From our past presentation of SPP for the nine months ended September 30, 2016, we removed four life science facilities that were classified as held for sale and a facility that was sold. Our 2016 total portfolio property count has been adjusted to include seven properties in development and eight properties classified as held for sale as of September 30, 2016.

SPP NOI andSame-Store Adjusted NOI increased primarily as a result of the following:
mark-to-market lease renewals;•increased rates for resident fees; partially offset by
new leasing activity;•higher costs of insurance, utilities, food, and
specific to adjusted NOI, annual rent escalations. real estate taxes.
Total Portfolio NOI and Adjusted NOI decreased primarily as a result of decreased government grant income received under the following impacts to Non-SPP:
decreased income from the sale of life science facilities in 2016 and 2017; partially offset by
increased income from (i) increased occupancy in portions of a development placed in operations in 2016 and 2017 and (ii) life science acquisitions in 2016 and 2017.
The decrease in Total Portfolio NOI and Adjusted NOI was alsoCARES Act, partially offset by the aforementioned increases to SPP. 


Medical Office
The following table summarizes results at and for the three months ended September 30, 2017 and 2016 (dollars and square feet in thousands, except per square foot data):Same-Store.
 SPP Total Portfolio
 Three Months Ended September 30, Three Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$101,804
 $100,211
 $1,593
 $119,847
 $113,653
 $6,194
HCP share of unconsolidated JV revenues474
 469
 5
 496
 502
 (6)
Operating expenses(38,587) (37,926) (661) (46,486) (44,738) (1,748)
HCP share of unconsolidated JV operating expenses(143) (147) 4
 (143) (148) 5
NOI63,548
 62,607
 941
 73,714
 69,269
 4,445
Adjustments to NOI650
 4
 646
 (582) (814) 232
Adjusted NOI$64,198
 $62,611
 $1,587
 73,132
 68,455
 4,677
Non-SPP adjusted NOI 
  
  
 (8,934) (5,844) (3,090)
SPP adjusted NOI 
  
  
 $64,198
 $62,611
 $1,587
Adjusted NOI % change 
  
 2.5%  
  
  
Property count(2)
214
 214
  
 245
 230
  
Average occupancy91.7% 92.1%  
 91.8% 91.6%  
Average occupied square feet14,357
 14,509
  
 16,707
 15,817
  
Average annual total revenues per occupied square foot$29
 $28
  
 $29
 $29
  
Average annual base rent per occupied square foot$24
 $23
  
 $24
 $24
  
44

(1)Represents rental and related revenues and tenant recoveries.
(2)From our past presentation of SPP, we removed a MOB that was sold and four MOBs that were placed into redevelopment. Our 2016 property count has been adjusted to include four properties in development as of September 30, 2016.
SPP NOI and adjusted NOI increased primarily as a result
Table of mark-to-market lease renewals and new leasing activity. Additionally, SPP adjusted NOI increased as a result of annual rent escalations.Contents
Total Portfolio NOI and adjusted NOI increased primarily as a result of the aforementioned increases to SPP and the following impacts to Non-SPP:
increased income from our 2016 and 2017 acquisitions; and
increased occupancy in former redevelopment and development properties that have been placed into operations; partially offset by
decreased income from the sale of four MOBs during 2016 and 2017 and the placement of a MOB into redevelopment.



The following table summarizes results at and for the nine months ended September 30, 2017 and 2016 (dollars and square feet in thousands, except per square foot data):
 SPP Total Portfolio
 Nine Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Rental revenues(1)
$299,808
 $293,138
 $6,670
 $357,381
 $331,881
 $25,500
HCP share of unconsolidated JV revenues1,414
 1,406
 8
 1,481
 1,503
 (22)
Operating expenses(112,491) (109,929) (2,562) (137,930) (129,715) (8,215)
HCP share of unconsolidated JV operating expenses(431) (452) 21
 (431) (452) 21
NOI188,300
 184,163
 4,137
 220,501
 203,217
 17,284
Adjustments to NOI1,652
 (175) 1,827
 (2,321) (2,361) 40
Adjusted NOI$189,952
 $183,988
 $5,964
 218,180
 200,856
 17,324
Non-SPP adjusted NOI 
  
  
 (28,228) (16,868) (11,360)
SPP adjusted NOI 
  
  
 $189,952
 $183,988
 $5,964
Adjusted NOI % change 
  
 3.2%  
  
  
Property count(2)
213
 213
  
 245
 230
  
Average occupancy91.9% 92.1%  
 91.9% 91.4%  
Average occupied square feet14,358
 14,410
  
 16,767
 15,719
  
Average annual total revenues per occupied square foot$28
 $27
  
 $28
 $28
  
Average annual base rent per occupied square foot$24
 $23
  
 $24
 $23
  

(1)Represents rental and related revenues and tenant recoveries.
(2)From our past presentation of SPP, we removed a MOB that was sold and four MOBs that were placed into redevelopment. Our 2016 property count has been adjusted to include four properties in development as of September 30, 2016.
SPP NOI and Adjusted NOI increased primarily as a result of mark-to-market lease renewals and new leasing activity. Additionally, SPP Adjusted NOI increased as a result of annual rent escalations.
Total Portfolio NOI and Adjusted NOI increased primarily as a result of the aforementioned increases to SPP and the following impacts to Non-SPP:
increased income from our 2016 and 2017 acquisitions; and
increased occupancy in former redevelopment and development properties that have been placed into operations; partially offset by
decreased income from the sale of four MOBs during 2016 and 2017 and the placement of a MOB into redevelopment.

Other Income and Expense Items
The following table summarizes the results of our other income and expense items for the three and nine months ended September 30, 2017March 31, 2023 and 20162022 (in thousands):
Three Months Ended September 30, Nine months ended September 30, Three Months Ended March 31,
2017 2016 Change 2017 2016 Change 20232022Change
Interest income$11,774
 $20,482
 $(8,708) $50,974
 $71,298
 $(20,324)Interest income$6,163 $5,494 $669 
Interest expense71,328
 117,860
 (46,532) 235,834
 361,255
 (125,421)Interest expense47,963 37,586 10,377 
Depreciation and amortization130,588
 141,407
 (10,819) 397,893
 421,181
 (23,288)Depreciation and amortization179,225 177,733 1,492 
General and administrative23,523
 34,781
 (11,258) 67,287
 83,011
 (15,724)General and administrative24,547 23,831 716 
Acquisition and pursuit costs580
 2,763
 (2,183) 2,504
 6,061
 (3,557)
Impairments (recoveries), net25,328
 —
 25,328
 82,010
 —
 82,010
Transaction costsTransaction costs2,425 296 2,129 
Impairments and loan loss reserves (recoveries), netImpairments and loan loss reserves (recoveries), net(2,213)132 (2,345)
Gain (loss) on sales of real estate, net5,182
 (9) 5,191
 322,852
 119,605
 203,247
Gain (loss) on sales of real estate, net81,578 3,856 77,722 
Loss on debt extinguishments(54,227) —
 (54,227) (54,227) —
 (54,227)
Other income (expense), net(10,556) 1,432
 (11,988) 40,723
 5,064
 35,659
Other income (expense), net772 18,316 (17,544)
Income tax benefit (expense)5,481
 424
 5,057
 14,630
 (1,101) 15,731
Income tax benefit (expense)(302)(777)475 
Equity income (loss) from unconsolidated joint ventures1,062
 (2,053) 3,115
 4,571
 (4,028) 8,599
Equity income (loss) from unconsolidated joint ventures1,816 2,084 (268)
Total discontinued operations—
 108,213
 (108,213) —
 283,996
 (283,996)
Noncontrolling interests’ share in earnings(1,937) (2,789) 852
 (7,687) (9,540) 1,853
Income (loss) from discontinued operationsIncome (loss) from discontinued operations— 317 (317)
Noncontrolling interests’ share in continuing operationsNoncontrolling interests’ share in continuing operations(15,555)(3,730)(11,825)
Interest income
Interest income decreasedincreased for the three months ended September 30, 2017March 31, 2023 primarily as a result of the payoff of: (i) our HC-One Facilityhigher interest rates, partially offset by principal repayments on loans receivable in June 20172022 and (ii) a participating development loan during the third quarter of 2016.
Interest income decreased for the nine months ended September 30, 2017 as a result of (i) the payoff of our HC-One Facility in June 2017 and (ii) incremental interest income received during the second quarter of 2016 due to the payoff of three participating development loans.2023.
Interest expense
Interest expense decreasedincreased for the three and nine months ended September 30, 2017March 31, 2023 primarily as a result of: (i) higher interest rates under the commercial paper program, (ii) borrowings under the Term Loan Facilities, which were drawn during the fourth quarter of 2022, and (iii) senior unsecured notes and mortgage debt repayments, which occurred primarily inissued during the second half of 2016 and thirdfirst quarter of 2017.
Approximately 89% and 86% of our total debt, inclusive of $44 million and $356 million of variable rate debt swapped to fixed through interest rate swaps, was fixed rate debt as of September 30, 2017 and 2016, respectively. At September 30, 2017, our fixed rate debt and variable rate debt had weighted average interest rates of 4.19% and 2.17%, respectively. At September 30, 2016, our fixed rate debt and variable rate debt had weighted average interest rates of 4.65% and 1.84%, respectively. For a more detailed discussion of our interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 3 below.2023.
Depreciation and amortization expense
Depreciation and amortization expense decreasedincreased for the three and nine months ended September 30, 2017March 31, 2023 primarily as a result of: (i) development and redevelopment projects placed in service during 2022 and 2023 and (ii) assets acquired during 2022. The increase in depreciation and amortization expense for the three months ended March 31, 2023 was partially offset by: (i) lower depreciation related to the deconsolidation of seven previously consolidated life science assets in South San Francisco, California and (ii) dispositions of real estate in 2022 and 2023.
Transaction costs
Transaction costs increased for the three months ended March 31, 2023 primarily as a result of the sale of 64 senior housing triple-net assetsexpenses incurred in connection with our reorganization to an UPREIT structure in 2023.
Impairments and the deconsolidation of RIDEA II during the first quarter of 2017, partially offset by depreciation and amortization of assets acquired during 2016 and year-to-date 2017.
General and administrative expenses
General and administrative expenses decreased for the three and nine months ended September 30, 2017 primarily as a result of severance and related charges primarily resulting from the departure of our former President and Chief Executive Officer in the third quarter of 2016 compared to severance and related charges primarily related to the departure of our former Executive Vice President and Chief Accounting Officer in the third quarter of 2017.

Impairmentsloan loss reserves (recoveries), net
We recognized $23 million of impairments on 11 underperforming senior housing triple-net facilitiesImpairments and a $3 million impairment on our Tandem Mezzanine Loanloan loss reserves (recoveries), net decreased for the three months ended September 30, 2017. DuringMarch 31, 2023 as a result of a decrease in loan loss reserves under the ninecurrent expected credit losses model. The decrease in loan loss reserves for the three months ended September 30, 2017, we recognized $59 million of impairmentsMarch 31, 2023 is primarily due to principal repayments on our Tandem Mezzanine Loan and the aforementioned senior housing triple-net facility impairments. For the three and nine months ended September 30, 2016, there were no impairments recognized.
See Notes 3 and 6 to the Consolidated Financial Statements for further information related to our real estate impairments and Tandem Mezzanine Loan, respectively.seller financing, partially offset by increased interest rates on variable rate loans.
Gain (loss) on sales of real estate, net
During the nine months ended September 30, 2017 (primarily in the first quarter of 2017), we sold 66 senior housing triple-net assets, five life science facilities, a SHOP facility, a MOB and a 40% interest in RIDEA II and recognized total net gainGain (loss) on sales of real estate, of $323 million. Duringnet increased during the ninethree months ended September 30, 2016, we soldMarch 31, 2023 primarily as a portfolioresult of: (i) the $60 million gain on sale of fivetwo life science facilities in one of our non-reportable segmentsDurham, North Carolina, which were sold in January 2023 and two senior housing triple-net facilities, a life science facility, three MOBs and a SHOP facility and recognized total(ii) the $21 million gain on sales of $120 million.
Losstwo MOBs, which were sold in March 2023, partially offset by the $4 million gain on debt extinguishments
Duringsale of one life science facility, which was sold during the three and nine months ended September 30, 2017, we repurchased $500 millionMarch 31, 2022. Refer to Note 4 to the Consolidated Financial Statements for additional information regarding dispositions of our 5.375% senior notes due 2021real estate and recognized a $54 million lossthe associated gain (loss) on debt extinguishment, primarily related to a premium for early payment.sales recognized.
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Other income (expense), net
Other income (expense), net, decreased for the three months ended September 30, 2017March 31, 2023 primarily due to: (i) a gain on sale associated with the disposition of a hospital under a DFL in 2022 and (ii) a decrease in government grant income received under the CARES Act in 2023, partially offset by expenses incurred in 2022 for tenant relocation and other costs associated with the demolition of an MOB.
Noncontrolling interests’ share in continuing operations
Noncontrolling interests’ share in continuing operations increased for the three months ended March 31, 2023 primarily as a result of $10 million of casualty-related charges due to hurricanes in the third quarter of 2017. Other income, net, increased for the nine months ended September 30, 2017 primarily as a result of the £42 million ($51 million) gain on sale of our Four Seasons Notes, partially offset by the aforementioned casualty-related chargesan MOB in the third quarter of 2017.a consolidated joint venture that was sold in 2023.
Income tax benefit (expense)
The increase in income tax benefit for the three months ended September 30, 2017 was primarily the result of (i) a $2 million deferred tax benefit from the casualty-related charges recognized in the third quarter of 2017 and (ii) a $2 million income tax expense associated with state built-in gain tax for the disposition of certain real estate assets during 2016. The increase in income tax benefit for the nine months ended September 30, 2017 was primarily the result of: (i) a $6 million income tax expense associated with state built-in gain tax for the disposition of certain real estate assets during 2016, (ii) a $5 million tax benefit from the sale of a 40% interest in RIDEA II in 2017 and (iii) a $2 million deferred tax benefit from the casualty-related charges recognized in the third quarter of 2017.
Equity income (loss) from unconsolidated joint ventures
The increase in equity income from unconsolidated joint ventures for the three and nine months ended September 30, 2017 was primarily the result of income from our investment in RIDEA II which was deconsolidated in the first quarter of 2017.
Total discontinued operations
For the three and nine months ended September 30, 2017, there were no discontinued operations. Discontinued operations for the three and nine months ended September 30, 2016 relate to income from the operations of QCP.
Liquidity and Capital Resources
We anticipate that our cash flow from operations, available cash balances, and cash from our various financing activities will be adequate for at least the next 12 months and for the foreseeable future for purposes of: (i) funding recurring operating expenses; (ii) meeting debt service requirements, including principal payments and maturities;requirements; and (iii) satisfying ourfunding of distributions to our stockholders and non-controlling interest members. During the three months ended March 31, 2023, distributions to common shareholders and noncontrolling interest holders exceeded cash flows from operations by approximately $14 million. Distributions are made using a combination of cash flows from operations, funds available under our bank line of credit (the “Revolving Facility”) and commercial paper program, proceeds from the sale of properties, and other sources of cash available to us.
OurIn addition to funding the activities above, our principal investingliquidity needs for the next 12 months are to:
•fund capital expenditures, including tenant improvements and leasing costs; and
•fund future acquisition, transactional, and development and redevelopment activities.
Our longer term liquidity needs include the items listed above as well as meeting debt service requirements.
We anticipate satisfying these future investing needs using one or more of the following:
issuance•cash flow from operations;
•sale of, common or preferred stock;exchange of ownership interests in, properties or other investments;

•borrowings under our Revolving Facility and commercial paper program;
•issuance of additional debt, including unsecured notes, term loans, and mortgage debt; and/or
draws on our credit facilities; and/•issuance of common or preferred stock or its equivalent, including sales of common stock under the ATM Program (as defined below).
sale or exchange of ownership interests in properties.
AccessOur ability to access the capital markets impacts our cost of capital and ability to refinance maturing indebtedness, as well as our ability to fund future acquisitions and development through the issuance of additional securities or secured debt. Credit ratings impact our ability to access capital and directly impact our cost of capital as well. For example,Our two senior unsecured delayed draw term loans with an aggregate principal amount of $500 million (the “Term Loan Facilities”) and our revolving line of credit facility accruesRevolving Facility accrue interest at a rate per annum equal to LIBORthe Secured Overnight Financing Rate (“SOFR”) plus a margin that depends uponon the credit ratings of our credit ratings.senior unsecured long-term debt. We also pay a facility fee on the entire revolving commitment under our Revolving Facility that depends upon our credit ratings. At October 27, 2017,As of April 26, 2023, we had along-term credit ratingratings of BBB from Fitch, Baa2Baa1 from Moody’s and BBBBBB+ from S&P Global, and short-term credit ratings of P-2 from Moody’s and A-2 from S&P Global.
A downgrade in credit ratings by Moody’s and S&P Global may have a negative impact on the interest rates and facility fees for our Revolving Facility and Term Loan Facilities and may negatively impact the pricing of notes issued under our commercial paper program and senior unsecured notes. While a downgrade in our credit ratings would adversely impact our cost of borrowing, we believe we would continue to have access to the unsecured debt markets, and we could also seek to enter into one or more secured debt financings, issue additional securities, including under our ATM Program, or dispose of certain assets to fund future operating costs, capital expenditures, or acquisitions, although no assurances can be made in this regard. Refer to “Market Trends and Uncertainties” above for a more comprehensive discussion of the potential impact of Covid as well as economic and market conditions on our business.
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Changes in Material Cash Requirements and Off-Balance Sheet Arrangements
Debt. Our material cash requirements related to debt decreased by $44 million to $6.5 billion at March 31, 2023, when compared to December 31, 2022, primarily as a result of repayments of notes under our commercial paper program, partially offset by the completion of a public offering in January 2023 of $400 million aggregate principal amount of 5.25% senior unsecured notes due in 2032. As of March 31, 2023, we had $5.1 billion of senior unsecured notes and $556 million outstanding under our commercial paper program. See Note 9 to the Consolidated Financial Statements for additional information about our debt securities.commitments.
Development and redevelopment commitments. Our material cash requirements related to development and redevelopment projects and Company-owned tenant improvements decreased by $35 million, to $217 million at March 31, 2023, when compared to December 31, 2022, primarily as a result of construction spend on existing projects in the first quarter of 2023 thereby decreasing the remaining commitment.
Construction loan commitments. Due to the terms of our SHOP seller financing notes receivable, as of March 31, 2023, we are obligated to provide additional loans up to $40 millionto fund senior housing redevelopment capital expenditure projects. There was no change in our material cash requirements to provide this additional funding from December 31, 2022 to March 31, 2023. See Note 6 to the Consolidated Financial Statements for additional information.
Redeemable noncontrolling interests. Our material cash requirements related to redeemable noncontrolling interests decreased by $20 million to $86 million at March 31, 2023, when compared to December 31, 2022. Certain of our noncontrolling interest holders have the ability to put their equity interests to us upon specified events or after the passage of a predetermined period of time. Each put option is subject to changes in redemption value in the event that the underlying property generates specified returns for us and meets certain promote thresholds pursuant to the respective agreements. As of March 31, 2023, one of the redeemable noncontrolling interests has met the conditions for redemption, but was not yet exercised. See Note 11 to the Consolidated Financial Statements for additional information.
Distribution and Dividend Requirements. There have been no changes to our distribution and dividend requirements during the three months ended March 31, 2023.
Off-Balance Sheet Arrangements. We own interests in certain unconsolidated joint ventures as described in Note 7 to the Consolidated Financial Statements. Two of these joint ventures have mortgage debt of $88 million, of which our share is $40 million. Except in limited circumstances, our risk of loss is limited to our investment in the joint ventures.
There have been no other material changes, outside of the ordinary course of business, during the three months ended March 31, 2023 to the material cash requirements or material off-balance sheet arrangements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 under “Material Cash Requirements” and “Off-Balance Sheet Arrangements” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Cash Flow Summary
The following summary discussion of our cash flows is based on the consolidated statementsConsolidated Statements of cash flowsCash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Cash and cash equivalents were $134 million and $95 million at September 30, 2017 and December 31, 2016, respectively, representing an increase of $39 million. The following table sets forth changes in cash flows (in thousands):
 Three Months Ended March 31,
 20232022Change
Net cash provided by (used in) operating activities$173,921 $194,183 $(20,262)
Net cash provided by (used in) investing activities56,345 (245,962)302,307 
Net cash provided by (used in) financing activities(239,875)(18,511)(221,364)
 Nine Months Ended September 30,
 2017 2016 Change
Net cash provided by (used in) operating activities$637,896
 $998,632
 $(360,736)
Net cash provided by (used in) investing activities1,755,823
 (314,159) 2,069,982
Net cash provided by (used in) financing activities(2,354,963) (897,328) (1,457,635)
Operating Cash Flows
The decrease in operating cash flow is primarily the result of (i) decreased Adjusted NOI related to the QCP Spin-Off and dispositions in the fourth quarter of 2016 and first three quarters of 2017 and (ii) decreased interest received as a result of loan repayments during 2017; partially offset by (i) 2016 acquisitions, (ii) annual rent increases, and (iii) decreased interest paid as a result of lower balances on our senior unsecured notes, term loans and line of credit. Our cash flowflows from operations isare dependent upon the occupancy levels of our buildings, rental rates on leases, our tenants’ performance on their lease obligations, the level of operating expenses, and other factors.
The following are significant investing and financing activities Operating cash flows decreased $20 million for the ninethree months ended September 30, 2017:March 31, 2023 compared to the three months ended March 31, 2022 primarily as a result of: (i) timing of property tax payments, (ii) an increase in interest expense, and (iii) an increase in property operating expenses. The decreasein operating cash flows was partially offset by: (i) developments and redevelopments placed in service during 2022 and 2023, (ii) annual rent increases, (iii) higher nonrefundable entrance fee collections, and (iv) new leasing and renewal activity.
received net proceeds
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Table of $1.7 billionContents
Investing Cash Flows
Our cash flows from the saleinvesting activities are generally used to fund acquisitions, developments, and redevelopments of real estate includingassets, net of proceeds received from sales of real estate assets, sales of DFLs, and repayments on loans receivable. Our net cash provided by investing activities increased $302 million for the sale and recapitalizationthree months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily as a result of RIDEA II;
received netthe following: (i) an increase in proceeds of $550 million primarily from the sale of our Four Seasons investments, the repayment of our HC-One Facility, and a DFL repayment;
made investments of $527 million primarily for the developmentsales of real estate;estate assets, (ii) a reduction in acquisitions of real estate assets, and (iii) an increase in proceeds from principal repayments on loans receivable and marketable debt securities. The increase in cash provided by investing activities was partially offset by: (i) development and redevelopment of real estate assets and (ii) higher contributions to unconsolidated joint ventures to fund redevelopments of unconsolidated assets.
repaid $1.8 billion, netFinancing Cash Flows
Our cash flows from financing activities are generally impacted by issuances of equity, borrowings and repayments under our bank line of credit 2012 Term Loan, 2015 Term Loan,and commercial paper program, senior unsecured notes, term loans, and mortgage debt;debt, net of dividends paid to common shareholders. Our net cash used in financing activities increased $221 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily as a result of the following: (i) lower borrowings and higher repayments under the bank line of credit and commercial paper program and (ii) increased distributions to noncontrolling interests. The increase in net cash used in financing activities was partially offset by proceeds received from the senior unsecured notes issuance in January 2023.
paid dividends on common stock of $521 million.
Debt
In January 2023, we completed a public offering of $400 million aggregate principal amount of 5.25% senior unsecured notes due in 2032.
In February 2023, the Revolving Facility was amended to change the interest rate benchmark from LIBOR to SOFR.
Also in February 2023, the agreements associated with $142 million of variable rate mortgage debt were amended to change the interest rate benchmarks from LIBOR to SOFR, effective March 2023. Concurrently, the Company modified the related interest rate swap instruments to reflect the change in the interest rate benchmarks from LIBOR to SOFR.
See Note 10 in9 to the Consolidated Financial Statements for additional information about our outstanding debt.
See “2017 Transaction Overview”Approximately 91% and 77% of our consolidated debt was fixed rate debt as of March 31, 2023 and 2022, respectively. At March 31, 2023, our fixed rate debt and variable rate debt had weighted average interest rates of 3.59% and 5.55%, respectively. At March 31, 2022, our fixed rate debt and variable rate debt had weighted average interest rates of 3.40% and 1.13%, respectively. As of March 31, 2023, we had$142 million of variable rate mortgage debt and the $500 million Term Loan Facilities swapped to fixed through interest rate swap instruments. These interest rate swap instruments are designated as cash flow hedges. For purposes of classification of the amounts above, variable rate debt with a derivative financial instrument designated as a cash flow hedge is reported as fixed rate debt due to us having effectively established a fixed interest rate for furtherthe underlying debt instrument. For a more detailed discussion of our interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 3 below.
Supplemental Guarantor Information
Healthpeak OP has issued the senior unsecured notes described in Note 9 to the Consolidated Financial Statements. The obligations of Healthpeak OP to pay principal, premiums, if any, and interest on such senior unsecured notes are guaranteed on a full and unconditional basis by the Company.
Subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the parent guarantee is “full and unconditional”, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and consolidated financial statements of the parent company have been filed. Accordingly, separate consolidated financial statements of Healthpeak OP have not been presented.
As permitted under Rule 13-01 of Regulation S-X, we have excluded the summarized financial information regarding our significantfor the operating subsidiary because the Company and Healthpeak OP have no material assets, liabilities, or operations other than debt financing activities through October 31, 2017.and their investments in non-guarantor subsidiaries, and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.
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Equity
At September 30, 2017,March 31, 2023, we had 469547 millionshares of common stock outstanding, equity totaled $5.9$7.1 billion, and our equity securities had a market value of $13.2$12.2 billion.
At-The-Market Program
In February 2023, in connection with the UPREIT reorganization, we terminated our previous at-the-market equity offering program and established a new at-the-market equity offering program (the “ATM Program”) that allows for the sale of shares of common stock having an aggregate gross sales price of up to $1.5 billion. In addition to the issuance and sale of shares of our common stock, we may also enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of our shares of common stock under our ATM Program.
During the three months ended March 31, 2023, we did not issue any shares of our common stock under any ATM Program.
At September 30, 2017,March 31, 2023, $1.5 billion of our common stock remained available for sale under the ATM Program. Actual future sales of our common stock will depend upon a variety of factors, including but not limited to market conditions, the trading price of our common stock, and our capital needs. We have no obligation to sell any shares under our ATM Program.
See Note 11 to the Consolidated Financial Statements for additional information about our ATM Program.
Noncontrolling Interests
Healthpeak OP. Immediately following the Reorganization, Healthpeak Properties, Inc. was the initial sole member and 100% owner of Healthpeak OP. Subsequent to the Reorganization, certain of our employees (“OP Unitholders”) were issued noncontrolling, non-managing member units in Healthpeak OP (“OP Units”). As of March 31, 2023, Healthpeak Properties, Inc. owned 99.6% of Healthpeak OP, with the OP Unitholders owning the remaining 0.4%. When certain conditions are met, the OP Unitholders have the right to require redemption of part or all of their OP Units for cash or shares of our common stock, at our option as managing member of Healthpeak OP. The per unit redemption amount is equal to either one share of our common stock or cash equal to the fair value of a share of common stock at the time of redemption. We classify the OP Units in permanent equity because we may elect, in our sole discretion, to issue shares of our common stock to OP Unitholders who choose to redeem their OP Units rather than using cash. None of the outstanding OP Units met the criteria for redemption as of March 31, 2023.
DownREITs. At March 31, 2023, non-managing members held an aggregate of 4five million units in fiveseven limited liability companies (“DownREITs”) for which we are the managing member. The DownREIT units are exchangeable for an amount of cash

approximating the then-current market value of shares of our common stock or, at our option, shares of our common stock (subject to certain adjustments, such as stock splits and reclassifications). At September 30, 2017,March 31, 2023, the outstanding DownREIT units were convertible into 7approximately seven million shares of our common stock.
At-The-MarketShare Repurchase Program
In June 2015, we established an at-the-market program, in connection withOn August 1, 2022, our Board of Directors approved the renewal of our shelf registration statement. Under this program,Share Repurchase Program under which we may sellacquire shares of our common stock from timein the open market up to time having an aggregate gross salespurchase price of up to $750$500 million. Purchases of common stock under the Share Repurchase Program may be exercised at our discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in August 2024 and may be suspended or terminated at any time without prior notice. During the year ended December 31, 2022, we repurchased 2.1 million through a consortium of banks acting as sales agents or directly to the banks acting as principals. There was no activity during the nine months ended September 30, 2017 and, at September 30, 2017, shares of our common stock having an aggregate gross salesat a weighted average price of $676 million$27.16 per share for a total of $56 million. During the three months ended March 31, 2023, there were available for saleno repurchases under the at-the-market program. Actual future sales will depend upon a variety of factors, including but not limited to market conditions, the trading priceShare Repurchase Program. Therefore, at March 31, 2023, $444 million of our common stock and our capital needs. We have no obligation to sell the remaining sharesremained available for salerepurchase under our program.the Share Repurchase Program.
Shelf Registration
WeIn February 2023, the Company and Healthpeak OP jointly filed a prospectus with the SEC as part of a registration statement on Form S-3ASR,S-3, using aan automatic shelf registration process. Our currentThis shelf registration statement expires in June 2018,on February 13, 2026 and at whichor prior to such time, we expect to file a new shelf registration statement. Under the “shelf” process, we may sell any combination of the securities described in the prospectus through one or more offerings. The securities described in the prospectus include future offerings of the Company’s common stock, preferred stock, depositary shares, warrants, debt securities, and warrants.guarantees of debt securities issued by Healthpeak OP, and Healthpeak OP’s debt securities and guarantees of debt securities issued by the Company.
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Off-Balance Sheet Arrangements
We own interests in certain unconsolidated joint ventures as described in Note 7 to the Consolidated Financial Statements. Except in limited circumstances, our risk
Table of loss is limited to our investment in the joint venture and any outstanding loans receivable. In addition, we have certain properties which serve as collateral for debt that is owed by a previous owner of certain of our facilities. Our risk of loss for these certain properties is limited to the outstanding debt balance plus penalties, if any. We have no other material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources except for commitments and operating leases included in our Annual Report on Form 10-K for the year ended December 31, 2016 in “Contractual Obligations” under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”Contents

Non-GAAP Financial Measures Reconciliations
The following is a reconciliation from net income (loss) applicable to common shares, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Nareit FFO, FFO as adjustedAdjusted, and FADAFFO (in thousands, except per share data)thousands):
 Three Months Ended
March 31,
 20232022
Net income (loss) applicable to common shares$117,698 $69,637 
Real estate related depreciation and amortization179,225 177,733 
Healthpeak’s share of real estate related depreciation and amortization from unconsolidated joint ventures5,993 5,135 
Noncontrolling interests’ share of real estate related depreciation and amortization(4,783)(4,840)
Loss (gain) on sales of depreciable real estate, net(81,578)(3,785)
Healthpeak’s share of loss (gain) on sales of depreciable real estate, net, from unconsolidated joint ventures— (279)
Noncontrolling interests’ share of gain (loss) on sales of depreciable real estate, net11,546 12 
Taxes associated with real estate dispositions— (182)
Nareit FFO applicable to common shares228,101 243,431 
Distributions on dilutive convertible units and other2,342 2,352 
Diluted Nareit FFO applicable to common shares$230,443 $245,783 
Weighted average shares outstanding - diluted Nareit FFO554,400 546,903 
Impact of adjustments to Nareit FFO:  
Transaction-related items$2,364 $296 
Other impairments (recoveries) and other losses (gains), net(1)
(1,272)(8,909)
Casualty-related charges (recoveries), net(2)
348 — 
Total adjustments$1,440 $(8,613)
FFO as Adjusted applicable to common shares$229,541 $234,818 
Distributions on dilutive convertible units and other2,340 2,368 
Diluted FFO as Adjusted applicable to common shares$231,881 $237,186 
Weighted average shares outstanding - diluted FFO as Adjusted554,400 546,903 
FFO as Adjusted applicable to common shares$229,541 $234,818 
Stock-based compensation amortization expense3,287 4,721 
Amortization of deferred financing costs2,821 2,689 
Straight-line rents(3)
(747)(11,158)
AFFO capital expenditures(22,789)(22,839)
Deferred income taxes(261)261 
Amortization of above (below) market lease intangibles, net(5,803)(5,768)
Other AFFO adjustments1,610 (691)
AFFO applicable to common shares207,659 202,033 
Distributions on dilutive convertible units and other1,640 1,649 
Diluted AFFO applicable to common shares$209,299 $203,682 
Weighted average shares outstanding - diluted AFFO552,575 545,078 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income (loss) applicable to common shares$(7,788) $150,924
 $472,311
 $568,109
Real estate related depreciation and amortization130,588
 142,874
 397,893
 425,582
Real estate related depreciation and amortization on unconsolidated joint ventures16,358
 12,607
 47,711
 36,347
Real estate related depreciation and amortization on noncontrolling interests and other(3,678) (5,270) (11,711) (15,708)
Other depreciation and amortization(1)
2,360
 2,986
 7,718
 8,922
Loss (gain) on sales of real estate, net(5,182) 9
 (322,852) (119,605)
Loss (gain) on sales of real estate, net on unconsolidated joint ventures—
 —
 —
 (215)
Loss (gain) on sales of real estate, net on noncontrolling interests—
 —
 —
 (2)
Taxes associated with real estate dispositions(2)
—
 257
 (5,498) 53,434
Impairments (recoveries) of real estate, net(3)
22,590
 —
 22,590
 —
FFO applicable to common shares$155,248
 $304,387
 $608,162
 $956,864
Distributions on dilutive convertible units and other—
 2,376
 5,250
 10,622
Diluted FFO applicable to common shares$155,248
 $306,763
 $613,412
 $967,486
        
Weighted average shares used to calculate diluted FFO per common share469,156
 471,994
 473,519
 473,011
        
Impact of adjustments to FFO: 
  
    
Transaction-related items(4)
$580
 $17,568
 $2,476
 $34,570
Other impairments (recoveries), net(5)
2,738
 —
 8,526
 —
Severance and related charges(6)
3,889
 14,464
 3,889
 14,464
Loss on debt extinguishment(7)
54,227
 —
 54,227
 —
Litigation costs2,303
 —
 7,507
 —
Casualty-related charges (recoveries), net(8)
8,925
 —
 8,925
 —
Foreign currency remeasurement losses (gains)(141) 94
 (986) 268
 $72,521
 $32,126
 $84,564
 $49,302
        
FFO as adjusted applicable to common shares$227,769
 $336,513
 $692,726
 $1,006,166
Distributions on dilutive convertible units and other1,493
 3,467
 5,095
 10,549
Diluted FFO as adjusted applicable to common shares$229,262
 $339,980
 $697,821
 $1,016,715
        
Weighted average shares used to calculate diluted FFO as adjusted per common share473,836
 473,692
 473,519
 473,011

Refer to footnotes on the next page.
50
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
FFO as adjusted applicable to common shares$227,769
 $336,513
 $692,726
 $1,006,166
Amortization of deferred compensation(9)
3,237
 3,389
 10,329
 12,894
Amortization of deferred financing costs3,439
 5,037
 11,141
 15,598
Straight-line rents(4,060) (3,295) (12,236) (14,412)
Other depreciation and amortization(2,360) (2,986) (7,718) (8,921)
Leasing costs, tenant improvements, and recurring capital expenditures(10)
(28,783) (23,822) (79,903) (66,176)
Lease restructure payments311
 1,868
 1,165
 14,480
CCRC entrance fees(11)
6,074
 4,975
 14,436
 16,524
Deferred income taxes(12)
(3,807) (3,431) (10,523) (8,977)
Other FAD adjustments587
 (708) 1,692
 (2,739)
FAD applicable to common shares$202,407
 $317,540
 $621,109
 $964,437
Distributions on dilutive convertible units and other1,596
 3,513
 5,250
 10,622
Diluted FAD applicable to common shares$204,003
 $321,053
 $626,359
 $975,059
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Diluted earnings per common share(0.02) 0.32
 1.01
 1.22
Depreciation and amortization0.31
 0.33
 0.93
 0.97
Loss (gain) on sales of real estate, net(0.01) —
 (0.68) (0.25)
Taxes associated with real estate dispositions(2)
—
 —
 (0.01) 0.11
Impairments (recoveries) of real estate, net(3)
0.05
 —
 0.05
 —
Diluted FFO per common shares$0.33
 $0.65
 $1.30
 $2.05
Transaction-related items(4)
—
 0.04
 —
 0.07
Other impairments (recoveries), net(5)
0.01
 —
 0.02
 —
Severance and related charges(6)
0.01
 0.03
 0.01
 0.03
Loss on debt extinguishment(7)
0.11
 —
 0.11
 —
Litigation costs—
 —
 0.01
 —
Casualty-related charges (recoveries), net(8)
0.02
 —
 0.02
 —
Diluted FFO as adjusted per common shares$0.48
 $0.72
 $1.47
 $2.15
Table of Contents

(1)
Other depreciation and amortization includes DFL depreciation and lease incentive amortization (reduction of straight-line rents) for the consideration given to terminate the 30 purchase options on the 153-property amended lease portfolio
(1)The three months ended March 31, 2022 includes the following, which are included in other income (expense), net in the 2014 Brookdale transaction.
(2)
For the nine months ended September 30, 2017, represents income tax benefit associated with the disposition of real estate assets in our RIDEA II transaction. For the nine months ended September 30, 2016, represents income tax expense associated with the state built-in gain tax payable upon the disposition of specific real estate assets, of which $49 million relates to the HCRMC real estate portfolio.
(3)
Represents impairments on 11 senior housing triple-net facilities.
(4)
On January 1, 2017, we early adopted the Financial Accounting Standards Board Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”) which prospectively results in recognizing the majority of our real estate acquisitions as asset acquisitions rather than business combinations. Acquisition and pursuit costs relating to completed asset acquisitions are capitalized, including those costs incurred prior to January 1, 2017. Real estate acquisitions completed prior to January 1, 2017 were deemed business combinations and the related acquisition and pursuit costs were expensed as incurred. For the three and nine months ended September 30, 2016, primarily relates to the QCP spin-off.
(5)
For the three months ended September 30, 2017, relates to the impairment of our Tandem Mezzanine Loan. For the nine months ended September 30, 2017, relates to the impairments of our Tandem Mezzanine Loan, net of the impairment recovery upon the sale of our Four Seasons Notes in the first quarter of 2017.
(6)
For the three months ended September 30, 2017, primarily relates to the departure of our former Executive Vice President and Chief Accounting Officer. For the three months ended September 30, 2016, primarily relates to the departure of our former President and Chief Executive Officer.
(7)Represents the premium associated with the prepayment of $500 million of senior unsecured notes.
(8)
Includes $11 million of casualty-related charges and a $2 million deferred income tax benefit.
(9)
Excludes $0.5 million related to the acceleration of deferred compensation for restricted stock units that vested upon the departure of our former Executive Vice President and Chief Accounting Officer, which is included in the severance and related charges for the three and nine months ended September 30, 2017. Excludes $6 million related to the acceleration of deferred compensation for restricted stock units and stock options that vested upon the departure of our former President and Chief Executive Officer, which is included in severance and related charges for the three and nine months ended September 30, 2016.
(10)
Includes our share of leasing costs and tenant and capital improvements from unconsolidated joint ventures.

(11)
Represents our 49% share of non-refundable entrance fees as the fees are collected by our CCRC JV, net of reserves and CCRC JV entrance fee amortization.
(12)
Excludes $2 million of deferred tax benefit from the casualty-related charges, which is included in casualty-related charges (recoveries), net for the three and nine months ended September 30, 2017.

For a reconciliation of NOI and Adjusted NOI to net income (loss), refer to Note 13 to the Consolidated Financial Statements. ForStatements of Operations: (i) a reconciliation$23 million gain on sale of SPP NOIa hospital under a direct financing lease and Adjusted NOI to total portfolio NOI(ii) $14 million of expenses incurred for tenant relocation and Adjusted NOI by segment, refer toother costs associated with the analysisdemolition of each segmentan MOB. The three months ended March 31, 2023 and 2022 includes reserves for loan losses recognized in “Resultsimpairments and loan loss reserves (recoveries), net in the Consolidated Statements of Operations” above.Operations.

(2)Casualty-related charges (recoveries), net are recognized in other income (expense), net and equity income (loss) from unconsolidated joint ventures in the Consolidated Statements of Operations.
(3)The three months ended March 31, 2023 includes a $9 million write-off of straight-line rent receivable associated with Sorrento Therapeutics, Inc., which commenced voluntary reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code. This write-off is reflected as a reduction of rental and related revenues in the Consolidated Statements of Operations.

Critical Accounting PoliciesEstimates
The preparation of financial statements in conformity with U.S. GAAP requires our management to use judgment in the application of critical accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and on various other assumptions believed to be reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summarydiscussion of ouraccounting estimates that we consider critical accounting policiesin that they may require complex judgment in their application or require estimates about matters that are inherently uncertain is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 20162022 in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2 to the Consolidated Financial Statements. There have been no significant changes to our critical accounting policiesestimates during 2017.the three months ended March 31, 2023.
Recent Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements for the impact of new accounting standards.
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates, specifically the GBP.rates. We use derivative and other financial instruments in the normal course of business to mitigate interest rate and foreign currency risk. We do not use derivative financial instruments for speculative or trading purposes. Derivatives are recorded on the consolidated balance sheetsConsolidated Balance Sheets at fair value (see Note 1917 to the Consolidated Financial Statements).
To illustrate the effect of movements in the interest rate and foreign currency markets, we performed a market sensitivity analysis on our hedging instruments. We applied various basis point spreads to the underlying interest rate curves and foreign currency exchange rates of theour derivative portfolio in order to determine the change in fair value. AssumingAt March 31, 2023, a one percentage point changeincrease or decrease in the underlying interest rate curve would result in a corresponding increase or decrease in the estimated change in fair value of each of the underlying derivative instruments would not exceed $2 million. Assuming a one percentage point change in the underlying foreign currency exchange rates, the estimated change in fair value of each of the underlying derivative instruments would not exceed $2by approximately $22 million.
Interest Rate Risk.At September 30, 2017,March 31, 2023, our exposure to interest rate risk iswas primarily on our variable rate debt. At September 30, 2017, $44March 31, 2023, $142 million of our variable-ratevariable rate mortgage debt was hedged byand our $500 million Term Loan Facilities were swapped to fixed through interest rate swap transactions.instruments. The interest rate swapsswap instruments are designated as cash flow hedges, with the objective of managing the exposure to interest rate risk by converting the interest rates on our variable-ratevariable rate debt to fixed interest rates. At March 31, 2023, both the fair value and carrying value of the interest rate swap instruments were$21 million.
Our remaining variable rate debt at March 31, 2023 was comprised of borrowings under our commercial paper program and certain of our mortgage debt. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt and assets until their maturity or earlier prepayment and refinancing. If interest rates have risen at the time we seek to refinance our fixed rate debt, whether at maturity or otherwise, our future earnings and cash flows could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of refinancing may reduce our overall borrowing costs. However, interestInterest rate changes will affect the fair value of our fixed rate instruments. AAt March 31, 2023, a one percentage point increase in interest rates would changedecrease the fair value of our fixed rate debt by approximately$239 millionand investmentsa one percentage point decrease in interest rates would increase the fair value of our fixed rate debt by approximately $255 million and $0.8 million, respectively, andmillion. These changes would not materially impact earnings or cash flows. Conversely, changes in interest rates on variable rate debt and investments would change our future earnings and cash flows, but not materially impact the fair value of those instruments. Assuming a one percentage point increase in the interest raterates related to the variable-rateour variable rate debt, and variable-rate investments, and assuming no other changes in the outstanding balance at September 30, 2017,March 31, 2023, our annual interest expense would increase by approximately$6 million. Lastly, assuming a one percentage point decrease in the interest rates related to our variable rate loans receivable, and assuming no other changes in the outstanding balance at March 31, 2023, our annual interest income would increasedecrease by approximately $9 million and $1 million, respectively.$2 million.
Foreign Currency Risk.  At September 30, 2017, our exposure to foreign currencies primarily relates to U.K. investments in leased real estate, loans receivables and related GBP denominated cash flows. Our foreign currency exposure is partially mitigated through the use
51
Table of GBP-denominated borrowings and a foreign currency swap contract. Based solely on our operating results for the threeContents

months ended September 30, 2017, including the impact of existing hedging arrangements, if the value of the GBP relative to the U.S. dollar were to increase or decrease by 10% compared to the average exchange rate during the quarter ended September 30, 2017, our cash flows would have decreased or increased, as applicable, by less than $1 million.
Market Risk.  We have investments in marketable debt securities classified as held-to-maturity because we have the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded at amortized cost and adjusted for the amortization of premiums and discounts through maturity. We consider a variety of factors in evaluating an other-than-temporary decline in value, such as: the length of time and the extent to which the market value has been less than our current adjusted carrying value; the issuer’s financial condition, capital strength and near-term prospects; any recent events specific to that issuer and economic conditions of its industry; and our investment horizon in relationship to an anticipated near-term recovery in the market value, if any. At September 30, 2017, both the fair value and carrying value of marketable debt securities was $19 million.
Item 4.  Controls and Procedures
Disclosure Controls and Procedures.  We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (Principal Executive Officer)principal executive officer and Chief Financial Officer (Principal Financial Officer),principal financial officer, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer)principal executive officer and Chief Financial Officer (Principal Financial Officer),principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017.March 31, 2023. Based upon that evaluation, our Chief Executive Officer (Principal Executive Officer)principal executive officer and Chief Financial Officer (Principal Financial Officer)principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2017.March 31, 2023.
Changes in Internal Control Over Financial Reporting.  There were no changes in our internal control over financial reporting (as such term asis defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

52
Table of Contents
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See the “Legal Proceedings” section of Note 11 to the consolidated financial statements for information regarding legal proceedings, which information is incorporated by reference in this Item 1.
Item 1A.  Risk Factors
ThereExcept as described below, there are no material changes to the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as updated by Part II, Item 1A2022.
Bank failures or other events affecting financial institutions could have a material adverse effect on our and our tenants’ liquidity, results of operations, and financial condition.
The failure of a bank, or events involving limited liquidity, defaults, non-performance, or other adverse conditions in the financial or credit markets impacting financial institutions, or concerns or rumors about such events, may adversely impact us, either directly or through an adverse impact on our tenants, operators, and borrowers. A bank failure or other event affecting financial institutions could lead to disruptions in our or our tenants’, operators’, and borrowers’ access to bank deposits or borrowing capacity, including access to letters of credit from certain of our Quarterly Report on Form 10-Q fortenants relating to lease obligations. In addition, our or our tenants’, operators’, and borrowers’ deposits in excess of the quarter ended March 31, 2017.Federal Deposit Insurance Corporation (FDIC) limits may not be backstopped by the U.S. government, and banks or financial institutions with which we or our tenants, operators, and borrowers do business may be unable to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis. Any adverse effects to our tenants’, operators’, or borrowers’ liquidity or financial performance could affect their ability to meet their financial and other contractual obligations to us, which could have a material adverse effect our business, results of operations, and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)
None.
(b)
None.
(c)
The following table sets forth information with respect to purchases of our common stock made by us or on our behalf or by any “affiliated purchaser,” as such term is defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended September 30, 2017.March 31, 2023.
Period Covered
Total Number
of Shares
Purchased(1)
Average Price
Paid per
Share
Total Number of Shares
Purchased as
Part of Publicly
Announced Plans or
Programs(2)
Maximum Number (or
Approximate Dollar Value)
of Shares that May Yet be Purchased
Under the Plans or
Programs(2)
January 1-31, 2023878 $26.85 — $444,018,701 
February 1-28, 2023236,541 27.22 — 444,018,701 
March 1-31, 2023222 24.06 — 444,018,701 
237,641 $27.22 — $444,018,701 

(1)Represents shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations that occur upon vesting of restricted stock units. The value of the shares withheld is based on the closing price of our common stock on the last trading day prior to the date the relevant transaction occurred.
(2)On August 1, 2022, our Board of Directors approved the Share Repurchase Program under which we may acquire shares of our common stock in the open market up to an aggregate purchase price of $500 million. Purchases of common stock under the Share Repurchase Program may be exercised at our discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in August 2024 and may be suspended or terminated at any time without prior notice. During the year ended December 31, 2022, we repurchased 2.1 million shares of our common stock at a weighted average price of $27.16 per share. During the first quarter of 2023, there were no repurchases, therefore, at March 31, 2023, $444 million of our common stock remained available for repurchase under the Share Repurchase Program. Amounts do not include the shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations as discussed in footnote 1.
Period Covered 
Total Number
Of Shares
Purchased(1)
 
Average
Price
Paid Per
Share
 
Total Number Of Shares
(Or Units) Purchased As
Part Of Publicly
Announced Plans Or
Programs
 
Maximum Number (Or
Approximate Dollar Value)
Of Shares (Or Units) That
May Yet Be Purchased
Under The Plans Or
Programs
July 1-31, 2017 2,807
 $31.94
 —
 —
August 1-31, 2017 181
 31.00
 —
 —
September 1-30, 2017 100
 29.47
 —
 —
Total 3,088
 31.80
 —
 —
53

(1)Represents shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations that occur upon vesting of restricted shares and restricted stock units. The value of the shares withheld is based on the closing price of our common stock on the last trading day prior to the date the relevant transaction occurs.
Table of Contents
Item 5.  Other Information
(a)Adoption of Updates to the Executive Severance Plan and Executive Change in Control Severance Plan
None.On April 27, 2023, our Board of Directors amended the Healthpeak Properties, Inc. Executive Severance Plan (the “Executive Severance Plan”) and the Healthpeak Properties, Inc. Executive Change in Control Severance Plan (the “CIC Plan”).
(b)The amendments to the Executive Severance Plan and CIC Plan included revising the methodology for calculating severance payments under the plans (including any prorated cash bonus payable under the CIC Plan for the year in which a participant’s termination of employment occurs) in the event of a participant’s qualifying termination of employment to clarify that the annual cash bonus portion of the cash severance formula will be based on the greater of (1) the participant’s target level bonus or (2) the average of the participant’s prior three years’ bonus payments from the Company. In the case of the Executive Severance Plan, a participant’s prorated cash bonus payment in the year of termination will continue to be based on actual performance for the quantitative portion, while the qualitative portion will be determined in the Compensation and Human Capital Committee’s discretion. The CIC Plan was also updated to remove the requirement that the Company execute a release of claims in favor of the participant in connection with a qualifying termination of employment, but a participant must still execute a release of claims in favor of the Company as a condition of any severance benefits under the plan. In addition, revisions were made to the “Good Reason” definition (as defined in the Executive Severance Plan and CIC Plan) and amendment provision of each plan.
None.The foregoing description of the updates to the Executive Severance Plan and CIC Plan is qualified in its entirety by reference to the Executive Severance Plan and CIC Plan, each as amended and restated April 27, 2023, copies of which are filed as Exhibits 10.15 and 10.16, respectively, to this Quarterly Report on Form 10-Q and incorporated herein by reference.

54
Table of Contents
Item 6. Exhibits
2.12.1+
SeparationAgreement and Distribution Agreement,Plan of Merger, dated October 31, 2016,February 7, 2023, by and between HCPamong Healthpeak Properties, Inc., New Healthpeak, Inc. and Quality Care Properties,Healthpeak Merger Sub, Inc. (incorporated herein by reference to Exhibit 2.1 to HCP’sHealthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
3.1
Articles of Amendment and Restatement of Healthpeak Properties, Inc. (formerly New Healthpeak, Inc.) effective February 10, 2023 (incorporated herein by reference to Exhibit 3.1 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
3.2
Articles of Amendment of Healthpeak Properties, Inc. (formerly New Healthpeak, Inc.) effective February 10, 2023 (incorporated herein by reference to Exhibit 3.2 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
3.3
Amended and Restated Bylaws of Healthpeak Properties, Inc. (formerly New Healthpeak, Inc.), dated February 10, 2023 (incorporated herein by reference to Exhibit 3.4 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
4.1
Thirteenth Supplemental Indenture, dated January 17, 2023, between Healthpeak and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.1 to Healthpeak’s Current Report on Form 8-K (File No. 001-08895) filed October 31, 2016)January 17, 2023).

3.14.2
Articles of Restatement of HCP, dated June 1, 2012, as supplemented by the Articles Supplementary, dated July 31, 2017.*


3.2
Fifth Amended and Restated BylawsIndenture, dated as of HCP,February 10, 2023, among Healthpeak OP, LLC, as amended through July 27, 2017.*issuer, Healthpeak Properties, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.6 to Healthpeak’s Registration Statement on Form S-3ASR filed February 13, 2023).


31.14.3
Second Supplemental Indenture, dated as of February 10, 2023, between Healthpeak OP, LLC, as issuer, Healthpeak Properties, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.1 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
4.4
Fourteenth Supplemental Indenture, dated as of February 10, 2023, between Healthpeak OP, LLC, as issuer, Healthpeak Properties, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.2 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
10.1
Operating Agreement of Healthpeak OP, LLC, dated as of February 10, 2023 (incorporated herein by reference to Exhibit 10.1 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
10.2
Consent and Amendment No. 1 to Second Amended and Restated Credit Agreement, dated as of February 10, 2023, by and among Healthpeak OP, LLC, Healthpeak Properties, Inc., the lenders listed therein and Bank of America, N.A., as administrative agent (incorporated herein by reference to Exhibit 10.2 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
10.3
Consent and Amendment No. 1 to Term Loan Agreement, dated as of February 10, 2023, by and among Healthpeak OP, LLC, Healthpeak Properties, Inc., the lenders listed therein and Bank of America, N.A., as administrative agent (incorporated herein by reference to Exhibit 10.3 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
10.4
Omnibus Assignment, Assumption and Amendment, dated February 7, 2023 by and between Healthpeak Properties, Inc. and New Healthpeak, Inc. (incorporated herein by reference to Exhibit 10.4 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
10.5
First Amendment to Amended and Restated Healthpeak Properties, Inc. 2014 Performance Incentive Plan (incorporated herein by reference to Exhibit 10.5 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).
10.6
At-the-Market Equity Offering Sales Agreement, dated February 17, 2023, among Healthpeak Properties, Inc., Healthpeak OP, LLC, and the sales agents, forward sellers and forward purchasers referred to therein (incorporated herein by reference to Exhibit 1.1 to Healthpeak’s Current Report on Form 8-K filed February 17, 2023).
10.7*†
Form of 2014 Performance Incentive Plan NEO Retentive LTIP Unit Agreement (adopted 2023).
10.8*†
Form of 2014 Performance Incentive Plan NEO 3-Year Performance-Based LTIP Unit Agreement (adopted 2023).
10.9*†
Form of 2014 Performance Incentive Plan NEO Retentive LTIP Unit Agreement (adopted 2023, for converted 2021 and 2022 LTIP awards).
10.10*†
Form of 2014 Performance Incentive Plan NEO 3-Year Performance-Based LTIP Unit Agreement (adopted 2023, for converted 2021 and 2022 LTIP awards).
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Table of Contents
10.11*†
Form of 2014 Performance Incentive Plan NEO Retentive LTIP Unit Award Agreement (adopted 2023, for converted awards).
10.12*†
Form of 2014 Performance Incentive Plan Non-NEO LTIP Unit Award Agreement (adopted 2023, for converted awards).
10.13*†
Form of 2023 Performance Incentive Plan Non-NEO Restricted Stock Unit Award Agreement (adopted 2023).
10.14*†
Form of 2023 Performance Incentive Plan Non-Employee Director Restricted Stock Unit Award Agreement (adopted 2023).
10.15*†
Executive Severance Plan (as amended and restated as of April 27, 2023).
10.16*†
Executive Change in Control Severance Plan (as amended and restated as of April 27, 2023).
22.1*
List of Issuers of Guaranteed Securities.
31.1*
Certification by ThomasScott M. Herzog, HCP’sBrinker, Healthpeak’s Principal Executive Officer, Pursuantpursuant to Securities Exchange Act Rule 13a-14(a).*
31.231.2*
Certification by Peter A. Scott, HCP’sHealthpeak’s Principal Financial Officer, Pursuantpursuant to Securities Exchange Act Rule 13a-14(a).*
32.132.1**
Certification by ThomasScott M. Herzog, HCP’sBrinker, Healthpeak’s Principal Executive Officer, Pursuantpursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.**
32.232.2**
Certification by Peter A. Scott, HCP’sHealthpeak’s Principal Financial Officer, Pursuantpursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.**
101.INS101.INS*XBRL Instance Document.*Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH101.SCH*XBRL Taxonomy Extension Schema Document.*
101.CAL101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB101.LAB*XBRL Taxonomy Extension Labels Linkbase Document.*
101.PRE101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.*
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

+ Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2).
*       Filed herewith.
**     Furnished herewith.

† Management Contract or Compensatory Plan or Arrangement.



56
Table of Contents
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 28, 2023Healthpeak Properties, Inc.
Date: November 2, 2017HCP, Inc.
/s/ SCOTT M. BRINKER
(Registrant)Scott M. Brinker
/s/ THOMAS M. HERZOG
Thomas M. Herzog
President and Chief Executive Officer
(Principal Executive Officer)
/s/ PETER A. SCOTT
Peter A. Scott
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ SHAWN G. JOHNSTON
Shawn G. Johnston
SeniorExecutive Vice President and
Chief Accounting Officer
(Principal Accounting Officer)


6357