Below is the full assignment questions, please mainly focus on the Q4, the rest three questions is for other team members. Here is only providing a context of what the assignment was asking. Documents needed will be post next to the questions.
Quality Care Properties’ Transactions
o Q1: What is a spin-off transaction? What are the various motivations for companies to consider such transactions?
o Q2: Provide a detailed explanation of the 2016 transactions that resulted in the creation of Quality Care Properties and its separation from HCP.
o Q3: Summarize the history of lease amendments and non-payments pre- and post-spin.
o Q4: Analyze HCR Manor Care’s financial profile for the years 2015 through 2017:
▪ Operational KPIs (e.g. average occupancy, daily rates, volumes)
▪ Revenue
▪ Revenue growth rate
▪ EBITDA
▪ EBITDA margins
▪ Rent
▪ EBITDAR
▪ Debt
▪ Cash
▪ CFO-capex
▪ Net debt
▪ Debt / EBITDA
▪ Net Debt / EBITDA
▪ Adjusted Debt / EBITDAR
• Hint: Adjusted Debt = Debt + (8 * Rent)
▪ Adjusted Net Debt / EBITDAR
• Tip: The main lease is classified as a “Financing Obligation” in the notes to the financial statements.
