TOLEDO, Ohio--(BUSINESS WIRE)--July 19, 2005--Health Care REIT, Inc. (NYSE:HCN) announced today operating results for its second quarter ended June 30, 2005.
"We were pleased with another successful quarter of investment and capital activity. We completed over $187 million of quality long-term care investments," commented George L. Chapman, chief executive officer of Health Care REIT, Inc. "In addition, we enhanced our financial flexibility by increasing our revolving lines of credit to $540 million and lowered our cost of capital. We also substantially eliminated near-term refinancing risk through the issuance of $250 million of favorably priced senior unsecured notes."
The Board of Directors declared a dividend for the quarter ended June 30, 2005 of $0.62 per share as compared to $0.60 per share for the same period in 2004. The dividend represents the 137th consecutive dividend payment. The dividend will be payable August 22, 2005 to stockholders of record on July 29, 2005.
Summary of Second Quarter Results
---------------------------------
(In thousands, except per share data)
----------------------------------------------------------------------
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
----------------------------------------------------------------------
Revenues $ 68,607 $58,901
Net Income Available to Common
Stockholders $ (1,606) $19,207
Funds From Operations $ 19,427 $35,760
Funds From Operations - Adjusted(1) $ 37,875 $35,760
Funds Available for Distribution $ 18,251 $33,291
Funds Available for Distribution
- Adjusted(1) $ 36,699 $33,291
Net Income Per Diluted Share $ (0.03) $ 0.37
FFO Per Diluted Share $ 0.36 $ 0.69
FFO Per Diluted Share - Adjusted(1) $ 0.70 $ 0.69
FAD Per Diluted Share $ 0.34 $ 0.64
FAD Per Diluted Share - Adjusted(1) $ 0.68 $ 0.64
Dividend Per Share $ 0.62 $ 0.60
FFO Payout Ratio 172% 87%
FFO Payout Ratio - Adjusted(1) 89% 87%
FAD Payout Ratio 182% 94%
FAD Payout Ratio - Adjusted(1) 91% 94%
(1) Adjusted for loss on extinguishment of debt in 2Q05.
Summary of Year to Date Results
---------------------------------
(In thousands, except per share data)
----------------------------------------------------------------------
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
----------------------------------------------------------------------
Revenues $136,987 $118,547
Net Income Available to Common
Stockholders $ 16,198 $ 37,862
Funds From Operations $ 57,738 $ 71,550
Funds From Operations - Adjusted(1) $ 76,186 $ 71,550
Funds Available for Distribution $ 53,706 $ 62,417
Funds Available for Distribution
- Adjusted(1) $ 72,154 $ 62,417
Net Income Per Diluted Share $ 0.30 $ 0.73
FFO Per Diluted Share $ 1.08 $ 1.39
FFO Per Diluted Share - Adjusted(1) $ 1.42 $ 1.39
FAD Per Diluted Share $ 1.00 $ 1.21
FAD Per Diluted Share - Adjusted(1) $ 1.35 $ 1.21
Dividend Per Share $ 1.22 $ 1.185
FFO Payout Ratio 113% 85%
FFO Payout Ratio - Adjusted(1) 86% 85%
FAD Payout Ratio 122% 98%
FAD Payout Ratio - Adjusted(1) 90% 98%
(1) Adjusted for loss on extinguishment of debt in 2Q05.
The company had a total outstanding debt balance of $1.4 billion at June 30, 2005, as compared with $1.0 billion at June 30, 2004, and stockholders' equity of $1.3 billion. At June 30, 2005, the company's debt to total book capitalization ratio was 51% and the debt to total market capitalization ratio was 37%. For the six months ended June 30, 2005, the company's coverage ratio of EBITDA to interest was 3.26 to 1.00 and the coverage ratio of EBITDA to fixed charges was 2.57 to 1.00, after adjusting for the one-time debt extinguishment charge of $18.4 million in the second quarter.
Straight-line Rent. The company recorded $1.2 million and $4.0 million of straight-line rent for the three and six months ended June 30, 2005. Straight-line rent is net of $2.4 million and $3.2 million in cash payments outside normal monthly rental payments for the three and six month periods, respectively.
Outlook for 2005. As previously announced, the company revised its 2005 net investment guidance to a range of $100 to $200 million from the previous guidance of $200 million. The revision in net investment guidance is due to an increase in anticipated dispositions pursuant to our active asset management program to a range of approximately $50 to $200 million during the remainder of the year. The new investments will primarily comprise leases that will not require rents to be straight-lined. Due to the one-time debt extinguishment charge, the company now expects to report net income available to common stockholders in the range of $1.05 to $1.13 per diluted share. Excluding the loss on extinguishment of debt, the company is reaffirming its guidance for 2005 FFO in the range of $2.90 to $2.98 per diluted share. The company now expects to record straight-line rent of approximately $10 million for the full year 2005, before any additional cash payments outside normal monthly rental payments, and is increasing its 2005 FAD guidance to a range of $2.72 to $2.80 from $2.66 to $2.74 per diluted share. The company continues to anticipate that general and administrative expenses will total between $17.5 million and $18.5 million for the full year 2005.
The company's guidance does not account for any impairments or unanticipated additions to the loan loss reserve. Additionally, the company plans to manage itself to maintain investment grade status with a capital structure consistent with its current profile. Please see Exhibit 15 for a reconciliation of the outlook for net income to FFO and FAD.
Supplemental Reporting Measures. The company believes that net income, as defined by accounting principles generally accepted in the United States (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FAD represents FFO excluding the non-cash straight-line rental adjustments.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. Additionally, the company excludes the non-cash provision for loan losses. The company believes that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of its operations. Additionally, restrictive covenants in the company's long-term debt arrangements contain financial ratios based on EBITDA. The company primarily utilizes EBITDA to measure its interest coverage ratio which represents EBITDA divided by interest expense.
In April 2002, the Financial Accounting Standards Board issued Statement No. 145 that requires gains and losses on extinguishments of debt to be classified as income or loss from continuing operations rather than as extraordinary items as previously required under Statement No. 4. The company adopted the standard effective January 1, 2003 and has properly reflected the current quarter loss on extinguishment of debt which may not be added back to net income in the calculation of FFO. Although the company has adopted this treatment, it has also disclosed FFO, FAD and EBITDA adjusted for the loss on extinguishment of debt for enhanced clarity.
FFO, FAD and EBITDA are financial measures that are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The company's management uses these financial measures to facilitate internal and external comparisons to historical operating results, in making operating decisions and for budget planning purposes. Additionally, FFO and FAD are internal evaluation metrics utilized by the Board of Directors to evaluate management. FFO, FAD and EBITDA do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, FFO, FAD and EBITDA, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see Exhibits 13, 14 and 16 for reconciliations of FAD, FFO and EBITDA to net income.
Conference Call Information. The company has scheduled a conference call on July 20, 2005, at 9:00 a.m. Eastern time to discuss its second quarter results, industry trends, portfolio performance and outlook for 2005. To participate on the webcast, log on to www.hcreit.com or www.earnings.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same Web sites. This earnings release is posted on the company's Web site under the heading Press Releases.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests primarily in skilled nursing and assisted living facilities. At June 30, 2005, the company had investments in 426 facilities in 37 states with 51 operators and had total assets of approximately $2.7 billion. The portfolio included 234 assisted living facilities, 179 skilled nursing facilities and 13 specialty care facilities. More information is available on the Internet at www.hcreit.com.
This document may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern and are based upon, among other things, the possible expansion of the company's portfolio; the performance of its operators and properties; its ability to make distributions; its policies and plans regarding investments, financings and other matters; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. When the company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company's expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including prevailing interest rates; current serious issues facing the health care industry, including compliance with, and changes to, regulations and payment policies and operators' difficulty in obtaining and maintaining adequate liability and other insurance and competition within the health care and senior housing industries; as well as possible future developments, including, but not limited to: changes in financing terms available to the company; changes in federal, state and local legislation; negative developments in the operating results or financial condition of operators, including, but not limited to, their ability to pay rent and repay loans; changes in the company's ability to transition or sell facilities with a profitable result; inaccuracies in any of the company's assumptions; and changes in rules or practices governing the company's financial reporting. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.
FINANCIAL SCHEDULES FOLLOW
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)
June 30
-----------------------
2005 2004
-----------------------
Assets
Real estate investments:
Real property owned
Land $ 228,077 $ 176,862
Buildings & improvements 2,420,555 1,812,116
Construction in progress 449 20,899
----------- -----------
2,649,081 2,009,877
Less accumulated depreciation (257,543) (182,034)
----------- -----------
Total real property owned 2,391,538 1,827,843
Loans receivable
Real property loans 221,549 216,003
Subdebt investments 22,620 45,023
----------- -----------
244,169 261,026
Less allowance for losses on loans receivable (5,861) (8,425)
----------- -----------
238,308 252,601
----------- -----------
Net real estate investments 2,629,846 2,080,444
Other assets:
Equity investments 3,298 3,298
Deferred loan expenses 9,172 8,955
Cash and cash equivalents 15,067 33,990
Receivables and other assets 82,556 64,894
----------- -----------
110,093 111,137
----------- -----------
Total assets $2,739,939 $2,191,581
=========== ===========
Liabilities and stockholders' equity
Liabilities:
Borrowings under unsecured lines of credit
arrangements $ 318,000 $ 41,000
Senior unsecured notes 894,830 825,000
Secured debt 168,790 146,936
Accrued expenses and other liabilities 44,354 17,560
----------- -----------
Total liabilities 1,425,974 1,030,496
Stockholders' equity:
Preferred stock 283,751 116,859
Common stock 53,772 51,546
Capital in excess of par value 1,166,234 1,106,155
Treasury stock (1,766) (850)
Cumulative net income 772,887 702,800
Cumulative dividends (960,850) (814,068)
Accumulated other comprehensive income 1 1
Other equity (64) (1,358)
----------- -----------
Total stockholders' equity 1,313,965 1,161,085
----------- -----------
Total liabilities and stockholders' equity $2,739,939 $2,191,581
=========== ===========
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
Revenues:
Rental income $62,791 $52,413 $124,765 $105,632
Interest income 5,269 5,923 10,252 11,636
Transaction fees and other
income 547 565 1,970 1,279
-------- -------- --------- ---------
Gross revenues 68,607 58,901 136,987 118,547
Expenses:
Interest expense 19,984 17,104 39,579 35,245
Provision for depreciation 21,000 17,166 41,271 33,673
General and administrative 4,337 3,560 8,355 6,719
Loan expense 673 872 1,535 1,763
Loss on extinguishment of
debt 18,448 0 18,448 0
Provision for loan losses 300 300 600 600
-------- -------- --------- ---------
Total expenses 64,742 39,002 109,788 78,000
-------- -------- --------- ---------
Income from continuing operations 3,865 19,899 27,199 40,547
Discontinued operations:
Gain (loss) on sales of
properties (24) 1,129 (134) 1,129
Income (loss) from
discontinued
operations, net (11) 401 5 678
-------- -------- --------- ---------
(35) 1,530 (129) 1,807
-------- -------- --------- ---------
Net income 3,830 21,429 27,070 42,354
Preferred dividends 5,436 2,222 10,872 4,492
-------- -------- --------- ---------
Net income (loss) available to
common stockholders $(1,606) $19,207 $ 16,198 $ 37,862
======== ======== ========= =========
Average number of common shares
outstanding:
Basic 53,429 51,232 53,207 50,919
Diluted 53,429 51,828 53,616 51,577
Net income (loss) available to
common stockholders per share:
Basic $ (0.03) $ 0.37 $ 0.30 $ 0.74
Diluted (0.03) 0.37 0.30 0.73
Dividends per share $ 0.62 $ 0.60 $ 1.22 $ 1.185
HEALTH CARE REIT, INC.
Financial Supplement - June 30, 2005
----------------------------------------------------------------------
Portfolio Composition ($000's) Exhibit 1
------------------------------
Balance Sheet
Data # Properties # Beds/Units Balance % Balance
--------------------------------------------------------
Real Property 405 38,959 $2,391,538 91%
Loans
Receivable (1) 21 2,520 221,549 8%
Subdebt
Investments 0 0 22,620 1%
--------------------------------------------------------
Total
Investments 426 41,479 $2,635,707 100%
Investment
Data # Properties # Beds/Units Investment (2) % Investment
--------------------------------------------------------
Assisted
Living
Facilities 234 15,707 $1,333,583 51%
Skilled
Nursing
Facilities 179 24,505 1,097,372 42%
Specialty
Care
Facilities 13 1,267 207,202 7%
--------------------------------------------------------
Real Estate
Investments 426 41,479 $2,638,157 100%
Notes:
(1) Includes $35,558,000 of loans on non-accrual.
(2) Real Estate Investments include gross real estate investments and
credit enhancements which amounted to $2,635,707,000 and
$2,450,000, respectively.
----------------------------------------------------------------------
Revenue Composition ($000's) Exhibit 2
----------------------------
Three Months Ended Six Months Ended
June 30, 2005 June 30, 2005
------------------ ----------------
Revenue by Investment Type (1)
Real Property $63,249 92% $126,638 92%
Loans Receivable 4,879 7% 9,141 7%
Subdebt Investments 479 1% 1,400 1%
------------------ ----------------
Total $68,607 100% $137,179 100%
Revenue by Facility Type (1)
Assisted Living Facilities $36,971 54% $ 73,099 53%
Skilled Nursing Facilities 27,794 41% 55,747 41%
Specialty Care Facilities 3,842 5% 8,333 6%
------------------ ----------------
Total $68,607 100% $137,179 100%
Notes: (1) Revenues include gross revenues and revenues from
discontinued operations.
----------------------------------------------------------------------
Operator Concentration ($000's) Exhibit 3
-------------------------------
Concentration by Investment # Properties Investment % Investment
------------- ----------- -------------
Emeritus Corporation 49 $ 358,530 14%
Southern Assisted Living, Inc. 43 198,776 8%
Commonwealth Communities
Management LLC 13 194,639 7%
Delta Health Group, Inc. 25 175,638 7%
Home Quality Management, Inc. 32 173,519 7%
Remaining operators (46) 264 1,537,055 57%
------------- ----------- -------------
Total 426 $2,638,157 100%
----------------------------------------------------------------------
Geographic Concentration ($000's) Exhibit 4
---------------------------------
Concentration by Region # Properties Investment % Investment
------------- ----------- -------------
South 267 $1,445,308 55%
Northeast 62 530,366 20%
West 50 307,975 12%
Midwest 47 354,508 13%
------------- ----------- -------------
Total 426 $2,638,157 100%
Concentration by State # Properties Investment % Investment
------------- ----------- -------------
Florida 61 $ 385,089 15%
Massachusetts 36 356,572 14%
Texas 49 228,788 9%
North Carolina 42 195,006 7%
Ohio 19 162,698 6%
Remaining States (32) 219 1,310,004 49%
------------- ----------- -------------
Total 426 $2,638,157 100%
----------------------------------------------------------------------
Committed Investment Balances Exhibit 5
-----------------------------
($000's except Investment per Bed/Unit)
Committed Investment
# Properties # Beds/Units Balance(1) per Bed/Unit
------------- ------------- ------------ -------------
Assisted Living
Facilities 234 15,707 $1,335,329 $ 85,015
Skilled Nursing
Facilities 179 24,505 1,097,372 44,782
Specialty Care
Facilities 13 1,267 207,202 163,537
------------- ------------- ------------ ---------
Total 426 41,479 $2,639,903 -na-
Notes: (1) Committed Balance includes gross real estate investments,
credit enhancements and unfunded construction commitments for which
initial funding had commenced.
----------------------------------------------------------------------
Selected Facility Data Exhibit 6
----------------------
Coverage Data
% Payor Mix -------------------
------------------------- Before After
Census Private Medicare Medicaid Mgt. Fees Mgt. Fees
----------------------------------------------------
Assisted Living
Facilities 88% 85% 0% 15% 1.49x 1.27x
Skilled Nursing
Facilities 86% 15% 17% 68% 2.18x 1.65x
Specialty Care
Facilities 66% 29% 40% 31% 3.46x 2.82x
-------------------
Weighted Averages 1.90x 1.52x
Notes: Data as of March 31, 2005
----------------------------------------------------------------------
Credit Support ($000's) Exhibit 7
-----------------------
Balance % Investment
------------------------
Cross Defaulted $2,550,797 97% of gross real estate investments
Cross Collateralized 192,415 87% of real property loans receivable
Master Leases 2,044,740 85% of real property owned
Current Capitalization
($000's except share price) Leverage & Performance Ratios
--------------------------------------- ------------------------------
Balance % Balance
---------------------
Borrowings Under
Bank Lines $ 318,000 12% Debt/Total Book Cap 51%
Long-Term Debt Debt/Undepreciated
Obligations 1,063,620 39% Book Cap 47%
Stockholders' Debt/Total Market Cap 37%
Equity 1,313,965 49%
-------------------
Total Book Interest
Capitalization $2,695,585 100% Coverage 2.35x 2nd Qtr.
2.80x YTD
Common Shares Interest
Outstanding Coverage 3.26x 2nd Qtr.
(000's) 53,888 - adjusted 3.26x YTD
Period-End Share Fixed Charge
Price $ 37.69 Coverage 1.85x 2nd Qtr.
---------- 2.20x YTD
Common Stock Fixed Charge
Market Value $2,031,039 55% Coverage 2.57x 2nd Qtr.
Preferred Stock 283,751 8% - adjusted 2.57x YTD
Borrowings Under
Bank Lines 318,000 8%
Long-Term Debt
Obligations 1,063,620 29%
-------------------
Total Market
Capitalization $3,696,410 100%
----------------------------------------------------------------------
Revenue Maturities ($000's) Exhibit 8
---------------------------
Operating Lease Expirations & Loan Maturities
Lease and
Current Lease Current Interest Interest
Year Revenue (1) Revenue (1) Revenue % of Total
----------------------------------------------------------------------
2005 $ 0 $ 653 $ 653 0%
2006 0 1,686 1,686 1%
2007 0 1,443 1,443 0%
2008 0 3,482 3,482 1%
2009 6,448 2,025 8,473 3%
Thereafter 265,044 9,859 274,903 95%
------------------------------------------------------
Total $271,492 $19,148 $290,640 100%
Notes: (1) Revenue impact by year, annualized.
----------------------------------------------------------------------
Debt Maturities and Principal Payments ($000's) Exhibit 9
-----------------------------------------------
Lines of Senior Secured
Year Credit (1) Notes Debt Total
----------------------------------------------------------------------
2005 $ 0 $ 0 $ 1,674 $ 1,674
2006 40,000 0 3,294 43,294
2007 0 52,500 15,285 67,785
2008 500,000 42,330 10,529 552,859
2009 0 0 34,068 34,068
2010 0 0 8,902 8,902
2011 0 0 20,668 20,668
Thereafter 0 800,000 74,370 874,370
-------------------------------------------------------
Total $540,000 $894,830 $168,790 $1,603,620
Notes: (1) Reflected at 100% capacity.
----------------------------------------------------------------------
Investment Activity ($000's) Exhibit 10
----------------------------
Three Months Ended Six Months Ended
June 30, 2005 June 30, 2005
--------------------- -------------------
Funding by Investment Type
Real Property $180,524 96% $231,510 92%
Loans Receivable 6,578 4% 19,098 8%
Subdebt Investments 0% 0%
------------ -------- ---------- --------
Total $187,102 100% $250,608 100%
Funding by Facility Type
Assisted Living Facilities $ 8,608 5% $ 58,448 23%
Skilled Nursing Facilities 154,997 83% 160,129 64%
Specialty Care Facilities 23,497 12% 32,031 13%
------------ -------- ---------- --------
Total $187,102 100% $250,608 100%
----------------------------------------------------------------------
Disposition Activity ($000's) Exhibit 11
-----------------------------
Three Months Ended Six Months Ended
June 30, 2005 June 30, 2005
--------------------- -------------------
Dispositions by Investment
Type
Real Property $ 736 15% $10,034 30%
Loans Receivable 4,027 85% 4,027 12%
Subdebt Investments 0% 19,467 58%
------------ -------- ---------- --------
Total $4,763 100% $33,528 100%
Dispositions by Facility Type
Assisted Living Facilities $4,763 100% $32,549 97%
Skilled Nursing Facilities 0% 0%
Specialty Care Facilities 0% 979 3%
------------ -------- ---------- --------
Total $4,763 100% $33,528 100%
----------------------------------------------------------------------
Discontinued Operations ($000's) Exhibit 12
---------------------------------
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
2005 2004 2005 2004
------ ------ ------ ------
Revenues
Rental income $ 0 $1,179 $ 192 $2,495
Expenses
Interest expense 2 262 52 673
Provision for depreciation 9 516 135 1,144
------ ------ ------ ------
Income (loss) from discontinued
operations, net $ (11) $ 401 $ 5 $ 678
----------------------------------------------------------------------
Funds Available For Distribution Reconciliation Exhibit 13
-----------------------------------------------
(Amounts in 000's except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Net income (loss) available to
common stockholders $(1,606) $19,207 $16,198 $37,862
Provision for depreciation (1) 21,009 17,682 41,406 34,817
Loss (gain) on sales of
properties 24 (1,129) 134 (1,129)
Prepayment fees 0 0 0 0
Rental income in excess of cash
received (1,176) (2,469) (4,032) (9,133)
-------- -------- -------- --------
Funds available for distribution 18,251 33,291 53,706 62,417
Loss on extinguishment of debt 18,448 0 18,448 0
-------- -------- -------- --------
Funds available for distribution
- adjusted 36,699 33,291 72,154 62,417
Non-recurring rental cash
payments (2,360) (2,385) (3,212) (2,986)
-------- -------- -------- --------
Funds available for distribution
- recurring $34,339 $30,906 $68,942 $59,431
Average common shares
outstanding:
Basic 53,429 51,232 53,207 50,919
Diluted - for net income (loss)
purposes 53,429 51,828 53,616 51,577
Diluted - for FAD purposes 53,765 51,828 53,616 51,577
Per share data:
Net income (loss) available to
common stockholders
Basic $ (0.03) $ 0.37 $ 0.30 $ 0.74
Diluted (0.03) 0.37 0.30 0.73
Funds available for distribution
Basic $ 0.34 $ 0.65 $ 1.01 $ 1.23
Diluted 0.34 0.64 1.00 1.21
Funds available for distribution
- adjusted
Basic $ 0.69 $ 0.65 $ 1.36 $ 1.23
Diluted 0.68 0.64 1.35 1.21
Funds available for distribution
- recurring
Basic $ 0.64 $ 0.60 $ 1.30 $ 1.17
Diluted 0.64 0.60 1.29 1.15
FAD Payout Ratio
Dividends per share $ 0.62 $ 0.60 $ 1.22 $ 1.185
FAD per diluted share $ 0.34 $ 0.64 $ 1.00 $ 1.21
-------- -------- -------- --------
FAD payout ratio 182% 94% 122% 98%
FAD Payout Ratio - Adjusted
Dividends per share $ 0.62 $ 0.60 $ 1.22 $ 1.185
FAD per diluted share - adjusted $ 0.68 $ 0.64 $ 1.35 $ 1.21
-------- -------- -------- --------
FAD payout ratio - adjusted 91% 94% 90% 98%
FAD Payout Ratio - Recurring
Dividends per share $ 0.62 $ 0.60 $ 1.22 $ 1.185
FAD per diluted share - recurring $ 0.64 $ 0.60 $ 1.29 $ 1.15
-------- -------- -------- --------
FAD payout ratio - recurring 97% 100% 95% 103%
Notes: (1) Provision for depreciation includes provision for
depreciation from discontinued operations.
----------------------------------------------------------------------
Funds From Operations Reconciliation Exhibit 14
------------------------------------
(Amounts in 000's except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Net income (loss) available to
common stockholders $(1,606) $19,207 $16,198 $37,862
Provision for depreciation (1) 21,009 17,682 41,406 34,817
Loss (gain) on sales of
properties 24 (1,129) 134 (1,129)
-------- -------- -------- --------
Funds from operations 19,427 35,760 57,738 71,550
Loss on extinguishment of debt 18,448 0 18,448 0
-------- -------- -------- --------
Funds from operations - adjusted $37,875 $35,760 $76,186 $71,550
Average common shares
outstanding:
Basic 53,429 51,232 53,207 50,919
Diluted - for net income (loss)
purposes 53,429 51,828 53,616 51,577
Diluted - for FFO purposes 53,765 51,828 53,616 51,577
Per share data:
Net income (loss) available to
common stockholders
Basic $ (0.03) $ 0.37 $ 0.30 $ 0.74
Diluted (0.03) 0.37 0.30 0.73
Funds from operations
Basic $ 0.36 $ 0.70 $ 1.09 $ 1.41
Diluted 0.36 0.69 1.08 1.39
Funds from operations - adjusted
Basic $ 0.71 $ 0.70 $ 1.43 $ 1.41
Diluted 0.70 0.69 1.42 1.39
FFO Payout Ratio
Dividends per share $ 0.62 $ 0.60 $ 1.22 $ 1.185
FFO per diluted share $ 0.36 $ 0.69 $ 1.08 $ 1.39
-------- -------- -------- --------
FFO payout ratio 172% 87% 113% 85%
FFO Payout Ratio - Adjusted
Dividends per share $ 0.62 $ 0.60 $ 1.22 $ 1.185
FFO per diluted share - adjusted $ 0.70 $ 0.69 $ 1.42 $ 1.39
-------- -------- -------- --------
FFO payout ratio - adjusted 89% 87% 86% 85%
Notes: (1) Provision for depreciation includes provision for
depreciation from discontinued operations.
----------------------------------------------------------------------
Outlook Reconciliations Exhibit 15
-----------------------
(Amounts in 000's except per share data)
Year Ended
December 31, 2005
-------------------
Low High
--------- ---------
Net income available to common
stockholders $ 57,918 $ 62,318
Loss (gain) on sales of properties 134 134
Provision for depreciation (1) 83,000 83,000
--------- ---------
Funds from operations 141,052 145,452
Loss on extinguishment of debt 18,448 18,448
--------- ---------
Funds from operations - adjusted 159,500 163,900
Rental income in excess of
cash received (10,000) (10,000)
--------- ---------
Funds available for distribution
- adjusted $ 149,500 $ 153,900
Average common shares outstanding
(diluted) 55,000 55,000
Per share data (diluted):
Net income available to common
stockholders $ 1.05 $ 1.13
Funds from operations 2.56 2.64
Funds from operations - adjusted 2.90 2.98
Funds available for distribution
- adjusted 2.72 2.80
Notes: (1) Provision for depreciation includes provision for
depreciation from discontinued operations.
----------------------------------------------------------------------
EBITDA Reconciliation ($000's) Exhibit 16
------------------------------
Three Months Ended Six Months Ended
June 30 June 30
------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- --------
Net income $ 3,830 $21,429 $ 27,070 $ 42,354
Provision for depreciation (1) 21,009 17,682 41,406 34,817
Interest expense (1) 19,986 17,366 39,631 35,918
Capitalized interest 348 199 614 336
Amortization (2) 2,314 1,092 3,356 2,210
Provision for loan losses 300 300 600 600
-------- -------- -------- --------
EBITDA 47,787 58,068 112,677 116,235
Loss on extinguishment of debt 18,448 0 18,448 0
-------- -------- -------- --------
EBITDA - adjusted $66,235 $58,068 $131,125 $116,235
Interest Coverage Ratio
Interest expense (1) $19,986 $17,366 $ 39,631 $ 35,918
Capitalized interest 348 199 614 336
-------- -------- -------- --------
Total interest 20,334 17,565 40,245 36,254
EBITDA $47,787 $58,068 $112,677 $116,235
-------- -------- -------- --------
Interest coverage ratio 2.35x 3.31x 2.80x 3.21x
EBITDA - adjusted $66,235 $58,068 $131,125 $116,235
-------- -------- -------- --------
Interest coverage ratio -
adjusted 3.26x 3.31x 3.26x 3.21x
Fixed Charge Coverage Ratio
Total interest (1) $20,334 $17,565 $ 40,245 $ 36,254
Preferred dividends 5,436 2,222 10,872 4,492
-------- -------- -------- --------
Total fixed charges 25,770 19,787 51,117 40,746
EBITDA $47,787 $58,068 $112,677 $116,235
-------- -------- -------- --------
Fixed charge coverage
ratio 1.85x 2.93x 2.20x 2.85x
EBITDA - adjusted $66,235 $58,068 $131,125 $116,235
-------- -------- -------- --------
Fixed charge coverage
ratio - adjusted 2.57x 2.93x 2.57x 2.85x
Notes:
(1) Provision for depreciation and interest expense include provision
for depreciation and interest expense from discontinued
operations.
(2) Amortization includes amortization of deferred loan expenses,
restricted stock and stock options.
CONTACT: Health Care REIT, Inc.
Ray Braun, 419-247-2800
Mike Crabtree, 419-247-2800
Scott Estes, 419-247-2800
SOURCE: Health Care REIT, Inc.