TOLEDO, Ohio--(BW HealthWire)--Oct. 16, 2001--Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its third quarter of 2001. The company continues to meet financial and operational expectations.
"Management was pleased with the third quarter results and our ongoing progress on portfolio seasoning," commented George L. Chapman, chairman and chief executive officer. "The capital markets continued its strong support for our company, as evidenced by the successful completion of a $175 million debt offering in August. The proceeds from the offering, together with the proceeds from the $75 million equity offering in June, will enable us to capitalize on accretive investment opportunities. We continue to see attractive investment opportunities in the long-term care market and are confident that the company will meet its goal of $100-125 million of new investments in the second half of 2001."
The Board of Directors voted to declare a dividend for the quarter ended September 30, 2001, of $0.585 per share. The dividend represents the 122nd consecutive dividend payment. The dividend will be payable November 20, 2001, to shareholders of record on October 31, 2001.
Summary of Third Quarter Results
--------------------------------
(In thousands, except per share numbers)
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Three Months Ended Three Months Ended
September 30, 2001 September 30, 2000
----------------------------------------------------------------------
Revenues $34,834 $33,906
Net Income Available
to Common Shareholders $13,591 $13,785
Funds From Operations (FFO) $20,091 $19,215
Net Income Per Diluted Share $0.41 $0.48
FFO Per Diluted Share $0.61 $0.67
Dividend Per Share $0.585 $0.585
FFO Payout Ratio 95% 87%
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Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $20.1 million, or $0.61 per diluted share, for the third quarter of 2001, compared with $19.2 million, or $0.67 per diluted share, for the same period in 2000. The decrease in FFO per share was primarily attributable to the short-term dilutive effects of the recent 3.45 million share common stock offering and the $175 million senior note issuance.
Summary of Year to Date Results
-------------------------------
(In thousands, except per share numbers)
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Nine Months Ended Nine Months Ended
September 30, 2001 September 30, 2000
----------------------------------------------------------------------
Revenues $100,176 $103,178
Net Income Available
to Common Shareholders $37,163 $43,130
Funds From Operations (FFO) $57,285 $58,559
Net Income Per Diluted Share $1.22 $1.51
FFO Per Diluted Share $1.89 $2.05
Dividend Per Share $1.755 $1.75
FFO Payout Ratio 93% 85%
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FFO totaled $57.3 million, or $1.89 per diluted share for the nine months ended September 30, 2001, compared with $58.6 million, or $2.05 per diluted share, for the same period in 2000.
The company had a total outstanding debt balance of $416 million at September 30, 2001, down from $439 million in third quarter 2000, and shareholders' equity of $763 million, which represents a debt to total capitalization ratio of 35 percent. The company's coverage ratio of EBITDA to interest was 3.66 to 1.0 for the twelve months ended September 30, 2001.
New Facility Investments. The company's investment activity for the quarter totaled $39.3 million, including the acquisition of seven assisted living facilities, with a total of 390 beds, located in three states and leased to two operators.
Portfolio Update. The portfolio results met the company's expectations. The seasoning of the assisted living portfolio is on target. The company ended the second quarter with 24 assisted living facilities remaining in fill-up representing less than 19 percent of revenues. Only three assisted living facilities have occupancy less than 50 percent.
Outlook for 2001 and 2002. The company previously announced FFO guidance of $0.64 to $0.65 per diluted share per quarter for 2001. With the recent debt offering and the previous equity offering, the company believes FFO will be $0.62 to $0.63 in fourth quarter 2001 and $0.64 to $0.65 in first quarter 2002.
Conference Call Information. Health Care REIT has scheduled a conference call on October 17, 2001, at 11:00 A.M. EST to discuss its third quarter 2001 performance, industry trends, portfolio performance, and its outlook for the remainder of 2001 and for 2002. To participate on the webcast, log on to www.hcreit.com or www.streetfusion.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes and assisted living facilities. At September 30, 2001, the company had investments in 202 health care facilities in 32 states and had total assets of approximately $1.2 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code -- HCN. More information is available on the Internet at http://www.hcreit.com.
This document and supporting schedules may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in the future to differ materially from expected results. These risks and uncertainties include, among others, general economic conditions, the availability of capital, competition within the financial services and real estate markets, the performance of operators within Health Care REIT's portfolio, and regulatory and other changes in the health care sector, as described in the company's filings with the Securities and Exchange Commission.
FINANCIAL SCHEDULES FOLLOW
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)
(Amounts in thousands)
September 30
--------------------------
2001 2000
--------------------------
Assets
Real estate investments:
Real property owned
Land $ 79,861 $ 71,289
Buildings & improvements 836,867 739,437
Construction in progress 8,995 23,744
------------ ------------
925,723 834,470
Less accumulated depreciation (71,564) (46,820)
------------ ------------
Total real property owned 854,159 787,650
Loans receivable
Real property loans 234,886 314,570
Subdebt investments 23,426 27,551
------------ ------------
258,312 342,121
Less allowance for losses on loans
receivable (6,611) (6,337)
------------ ------------
251,701 335,784
------------ ------------
Net real estate investments 1,105,860 1,123,434
Other assets:
Equity investments 6,585 5,556
Deferred loan expenses 7,266 3,065
Cash and cash equivalents 43,564 3,516
Receivables and other assets 32,012 26,712
------------ ------------
89,427 38,849
------------ ------------
Total assets $ 1,195,287 $ 1,162,283
============ ============
Liabilities and shareholders' equity
Liabilities:
Borrowings under line of
credit obligations $ 0 $ 118,850
Senior unsecured notes 412,250 255,000
Secured debt 3,801 64,867
Accrued expenses and other liabilities 16,250 20,554
------------ ------------
Total liabilities $ 432,301 $ 459,271
Shareholders' equity:
Preferred Stock 150,000 150,000
Common Stock 32,490 28,691
Capital in excess of par value 603,705 526,307
Undistributed (overdistributed) net
income (18,922) 2,001
Accumulated other comprehensive income (873) (715)
Unamortized restricted stock (3,414) (3,272)
------------ ------------
Total shareholders' equity $ 762,986 $ 703,012
------------ ------------
Total liabilities and shareholders' equity $ 1,195,287 $ 1,162,283
============ ============
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Amounts in thousands except per share data)
Three months ended Nine months ended
September 30 September 30
------------------- -------------------
2001 2000 2001 2000
------------------- -------------------
Revenues:
Operating lease rents $ 25,756 $ 22,266 $ 72,227 $ 65,984
Interest income 7,187 9,695 23,974 31,408
Commitment fees and other
income 934 1,390 2,861 4,657
Prepayment fees 856 0 990 57
Gain on sale of properties 101 555 124 1,072
--------- --------- --------- ---------
Gross Revenues 34,834 33,906 100,176 103,178
Expenses:
Interest expense $ 7,643 $ 8,411 $ 23,731 $ 26,093
Provision for depreciation 7,244 5,985 21,023 16,558
General and administrative 2,070 1,823 5,956 5,654
Loan expense 447 276 1,212 879
Provision for losses 250 250 750 750
--------- --------- --------- ---------
Total Expenses 17,654 16,745 52,672 49,934
--------- --------- --------- ---------
Net Income before
extraordinary item 17,180 17,161 47,504 53,244
Loss on extinguishment of debt 213 0 213 0
--------- --------- --------- ---------
Net Income 16,967 17,161 47,291 53,244
Preferred stock dividends 3,376 3,376 10,128 10,114
--------- --------- --------- ---------
Net Income available to
Common Shareholders $ 13,591 $ 13,785 $ 37,163 $ 43,130
========= ========= ========= =========
Average number of common
shares outstanding:
Basic 32,205 28,507 29,946 28,460
Diluted 32,762 28,650 30,358 28,603
Net income per share:
Basic $ 0.42 $ 0.48 $ 1.24 $ 1.52
Diluted 0.41 0.48 1.22 1.51
Funds from operations: $ 20,091 $ 19,215 $ 57,285 $ 58,559
Funds from operations per
share:
Basic $ 0.62 $ 0.67 $ 1.91 $ 2.06
Diluted 0.61 0.67 1.89 2.05
Dividends per share $ 0.585 $ 0.585 $ 1.755 $ 1.750
HEALTH CARE REIT, INC.
Financial Supplement - September 30, 2001
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Portfolio Composition ($000's) Exhibit 1
------------------------------
No. No.
Balance Sheet Data Properties Beds/Units Balance %Balance
--------------------------------------------
Real Property 164 12,965 $ 854,159 77%
Loans Receivable 38 4,528 234,886 21%
Subdebt Investments -na- -na- 23,426 2%
--------------------------------------------
Total Investments 202 17,493 $ 1,112,471 100%
No. No.
Investment Data Properties Beds/Units Investment(1) %Investment
-----------------------------------------------
Assisted Living
Facilities 147 9,711 $ 764,881 68%
Nursing Homes 48 6,477 273,472 24%
Specialty Care
Facilities 7 1,305 85,543 8%
-----------------------------------------------
Real Estate Investments 202 17,493 $ 1,123,896 100%
Investment by No. No.
Owner Type Properties Beds/Units Investment(1) %Investment
-----------------------------------------------
Publicly Traded 69 3,872 $ 253,303 22%
Key Private 77 7,686 537,946 48%
Privately Held 56 5,935 332,647 30%
-----------------------------------------------
Real Estate Investments 202 17,493 $ 1,123,896 100%
Notes: (1) Real Estate Investments include gross real estate
investments and credit enhancements which amounted to $1,112,471,000
and $11,425,000, respectively.
----------------------------------------------------------------------
----------------------------------------------------------------------
Revenue Composition ($000's) Exhibit 2
----------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
------------------ ------------------
Revenue by Investment Type
Real Property $ 26,301 75% $ 73,822 74%
Loans Receivable & Other 8,082 23% 24,943 25%
Subdebt Investments 451 2% 1,411 1%
------------------ ------------------
Total $ 34,834 100% $ 100,176 100%
Revenue by Facility Type
Assisted Living Facilities $ 22,942 66% $ 66,098 66%
Nursing Homes 8,694 25% 23,946 24%
Specialty Care Facilities 3,198 9% 10,132 10%
------------------ ------------------
Total $ 34,834 100% $ 100,176 100%
Revenue by Owner Type
Publicly Traded $ 9,097 26% $ 25,052 25%
Key Private 17,248 50% 52,226 52%
Privately Held 8,489 24% 22,898 23%
------------------ ------------------
Total $ 34,834 100% $ 100,176 100%
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----------------------------------------------------------------------
Revenue Composition (Continued) ($000's) Exhibit 3
----------------------------------------
Operating Lease Expirations & Loan Maturities
Current Lease Current Interest Interest and
Year Revenue(1) Revenue(1) Lease Revenue % of Total
----------------------------------------------------------------------
2001 $ 1,993 $ 0 $ 1,993 2%
2002 1,738 7,530 9,268 7%
2003 2,770 0 2,770 2%
2004 410 1,433 1,843 1%
2005 0 2,507 2,507 2%
Thereafter 93,443 16,878 110,321 86%
----------------------------------------------------------
Total $ 100,354 $ 28,348 $ 128,702 100%
Notes: (1) Revenue impact by year, annualized
----------------------------------------------------------------------
----------------------------------------------------------------------
Committed Investment Balances Exhibit 4
-----------------------------
($000's except Investment per Bed/Unit)
No. No. Committed Investment
Properties Beds/Units Balance(1) per Bed/Unit
------------------------------------------------
Assisted Living
Facilities 147 9,711 $ 768,979 $ 79,186
Nursing Homes 48 6,477 273,472 42,222
Specialty Care
Facilities 7 1,305 85,543 65,551
------------------------------------------------
Total 202 17,493 $ 1,127,994 -na-
Notes: (1) Committed Balance includes gross real estate investments,
credit enhancements and unfunded commitments for which initial funding
had commenced.
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----------------------------------------------------------------------
Operator Concentration ($000's) Exhibit 5
-------------------------------
No.
Properties Investment %Investment
Concentration by Investment ------------------------------------
Merrill Gardens 19 $ 128,023 11%
Alterra Healthcare 42 92,016 8%
Life Care Centers of America, Inc. 13 84,969 8%
Atria Senior Quarters 9 78,875 7%
Commonwealth Communities 6 69,980 6%
Remaining Operators 113 670,033 60%
------------------------------------
Total 202 $ 1,123,896 100%
No.
Properties Revenue(1) %Revenue
Concentration by Revenue ------------------------------------
Merrill Gardens 19 $ 10,451 10%
Alterra Healthcare 42 8,606 9%
Life Care Centers of America, Inc. 13 7,202 7%
Atria Senior Quarters 9 7,087 7%
Commonwealth Communities 6 5,509 6%
Remaining Operators 113 61,321 61%
------------------------------------
Total 202 $ 100,176 100%
Notes: (1) Nine months ended September 30, 2001
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Selected Facility Data Exhibit 6
----------------------
Coverage Data
%Payor Mix --------------------
----------------- Before After
Census Private Medicare Mgt. Fees Mgt. Fees
------------------------- --------------------
Nursing Homes 83% 12% 21% 1.71x 1.24x
Assisted Living
Facilities 88% 100% 0% 1.30x 1.12x
Specialty Care
Facilities 50% 31% 15% 1.76x 1.37x
--------------------
Weighted Averages 1.48x 1.19x
Notes: Data as of June 30, 2001
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----------------------------------------------------------------------
Security Deposits & Other Credit Support ($000's) Exhibit 7
-------------------------------------------------
Balance %Investment
----------------------------
Cross Defaulted $ 1,019,770 91% of gross real estate investments
Cross Collateralized 198,095 84% of mortgage loans
Bank Letters of
Credit & Cash 21,590 2% of investment balance
Current
Capitalization
($000's) Balance %Balance Leverage & Performance Ratios
---------------- ---------------- ---------------------------------
Borrowings Under
Bank Lines $ 0 0% Debt/Total Book Cap 35%
Long-Term Debt
Obligations 416 35% Debt/Total Mkt. Cap 30%
Shareholders'
Equity 763 65% Interest Coverage 3.77x 3rd Qtr.
---------------- 3.66x L12M
Total Book
Capitalization $ 1,179 100%
FFO Payout Ratio 95% 3rd Qtr.
92% L12M
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----------------------------------------------------------------------
Debt Maturities and Principal Payments ($000's) Exhibit 8
-----------------------------------------------
Lines of Senior Secured
Year Credit(1) Notes Debt(1) Total
----------------------------------------------------------------------
2001 $ 0 $ 0 $ 16 $ 16
2002 25,000 12,250 75 37,325
2003 150,000 35,000 84 185,084
2004 0 40,000 64,133 104,133
2005 0 0 493 493
2006 0 50,000 0 50,000
2007 0 175,000 0 175,000
Thereafter 0 100,000 0 100,000
-----------------------------------------------
Total $ 175,000 $ 412,250 $ 64,801 $ 652,051
Notes: (1) Lines of Credit reflect 100% capacity
----------------------------------------------------------------------
----------------------------------------------------------------------
Investment Activity ($000's) Exhibit 9
----------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
------------------ ------------------
Funding by Investment Type
Real Property $ 34,806 88% $ 69,605 81%
Mortgage & Other Loans 0 0% 0 0%
Construction Advances 3,558 9% 13,884 16%
Subdebt Investments 992 3% 2,665 3%
------------------ ------------------
Total $ 39,356 100% $ 86,154 100%
Real Estate Investments
Assisted Living Facilities $ 38,736 94% $ 49,218 57%
Nursing Homes 620 6% 36,936 43%
Specialty Care Facilities 0 0% 0 0%
------------------ ------------------
Total $ 39,356 100% $ 86,154 100%
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----------------------------------------------------------------------
Geographic Concentration ($000's) Exhibit 10
---------------------------------
No.
Properties Investment %Investment
Concentration by Region ------------------------------------
South 115 $ 524,483 47%
Northeast 31 262,571 23%
West 29 199,654 18%
Midwest 27 137,188 12%
------------------------------------
Total 202 $ 1,123,896 100%
No.
Properties Investment %Investment
Concentration by State ------------------------------------
Florida 29 $ 148,930 13%
Massachusetts 14 123,526 11%
Texas 29 101,657 9%
California 8 61,400 5%
New York 6 58,665 5%
Remaining States 116 629,718 57%
------------------------------------
Total 202 $ 1,123,896 100%
No.
Properties Revenue(1) %Revenue
Revenue by State(1) ------------------------------------
Florida 29 $ 11,638 12%
Texas 29 11,560 11%
Massachusetts 14 9,880 10%
California 8 6,198 6%
New York 6 5,106 5%
Remaining States 116 55,794 56%
------------------------------------
Total 202 $ 100,176 100%
Notes: (1) Nine months ended September 30, 2001
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----------------------------------------------------------------------
Funds From Operations Computation ($000's) Exhibit 11
------------------------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
------------------ ------------------
Net Income Available
to Common Shareholders $ 13,591 $ 37,163
Add: Depreciation Expense 7,244 21,023
Loss on Extinguishment 213 213
Deduct: Gain on Sale of Assets (101) (124)
Prepayment Fees (856) (990)
------------------ ------------------
Funds From Operations (FFO) $ 20,091 $ 57,285
Average Common Shares Outstanding:
Basic 32,205 29,946
Diluted 32,762 30,358
FFO Per Common Share:
Basic $ 0.62 $ 1.91
Diluted $ 0.61 $ 1.89
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----------------------------------------------------------------------
Disposition Activity Exhibit 12
--------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
------------------ ------------------
Dispositions by Investment Type
Real Property $ 10,429 27% $ 22,018 25%
Mortgage & Other Loans 28,535 73% 65,040 75%
-------- ---- -------- ----
Total $ 38,964 100% $ 87,058 100%
======== ==== ======== ====
Real Estate Investments
Assisted Living Facilities $ 10,429 27% $ 26,420 30%
Nursing Homes 0 0% 0 0%
Specialty Care Facilities 28,535 73% 60,638 70%
-------- ---- -------- ----
Total $ 38,964 100% $ 87,058 100%
======== ==== ======== ====
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Lease Up Statistics on Assisted Living Facilities Exhibit 13
-------------------------------------------------
Months in
Occupancy Facilities Operation Revenue(1) % of Revenue
-----------------------------------------------
00% - 50% 3 10 $ 5,741 6%
50% - 70% 15 20 $ 8,634 8%
70% + 6 17 $ 3,914 4%
Notes: (1) Interest and rental income for nine months ended
September 30, 2001.
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--30--jsw/clv*
| CONTACT: | Health Care REIT, Inc. |
|---|---|
| Ray Braun, 419/247-2800 | |
| or Mike Crabtree, 419/247-2800 |