TOLEDO, Ohio--(BUSINESS WIRE)--July 20, 2004--Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its second quarter ended June 30, 2004.
"We had a strong quarter of investment activity driving our gross and net new investment total for the first half of 2004 to $161.5 million and $127.7 million, respectively," commented George L. Chapman, chief executive officer of Health Care REIT, Inc. "This first half activity, together with an additional $148.4 million of net new investments to date in the third quarter, allows us to increase our 2004 projected net new investment guidance to $400 million to $500 million. Many of these investments will incorporate rental escalators that enable us to generate additional organic growth and minimize straight-line rent over time. While this change will impact FFO guidance in the short run, cash flow and our ability to pay dividends are unaffected."
The Board of Directors declared a dividend for the quarter ended June 30, 2004 of $0.60 per share as compared to $0.585 per share for the same period in 2003. The dividend represents the 133rd consecutive dividend payment. The dividend will be payable August 20, 2004 to stockholders of record on July 30, 2004.
Summary of Second Quarter Results
-------------------------------------
(In thousands, except per share data)
----------------------------------------------------------------------
Three Three
Months Months
Ended Ended
June 30, June 30,
2004 2003
----------------------------------------------------------------------
Revenues $59,334 $44,822
----------------------------------------------------------------------
Net Income Available to Common Stockholders $19,207 $16,744
----------------------------------------------------------------------
Funds From Operations $35,760 $28,600
----------------------------------------------------------------------
Net Income Per Diluted Share $ 0.37 $ 0.41
----------------------------------------------------------------------
FFO Per Diluted Share $ 0.69 $ 0.70
----------------------------------------------------------------------
Dividend Per Share $ 0.60 $ 0.585
----------------------------------------------------------------------
FFO Payout Ratio 87% 84%
----------------------------------------------------------------------
Net income available to common stockholders totaled $19.2 million, or $0.37 per diluted share, for the second quarter of 2004, compared with $16.7 million, or $0.41 per diluted share, for the same period in 2003. Funds from operations totaled $35.8 million, or $0.69 per diluted share, for the second quarter of 2004, compared with $28.6 million, or $0.70 per diluted share, for the same period in 2003.
Summary of Year to Date Results
-------------------------------------
(In thousands, except per share data)
----------------------------------------------------------------------
Six Six
Months Months
Ended Ended
June 30, June 30,
2004 2003
----------------------------------------------------------------------
Revenues $119,419 $88,073
----------------------------------------------------------------------
Net Income Available to Common Stockholders $ 37,862 $33,195
----------------------------------------------------------------------
Funds From Operations $ 71,549 $56,674
----------------------------------------------------------------------
Net Income Per Diluted Share $ 0.73 $ 0.81
----------------------------------------------------------------------
FFO Per Diluted Share $ 1.39 $ 1.39
----------------------------------------------------------------------
Dividend Per Share $ 1.185 $ 1.17
----------------------------------------------------------------------
FFO Payout Ratio 85% 84%
----------------------------------------------------------------------
Net income available to common stockholders totaled $37.9 million, or $0.73 per diluted share, for the six months ended June 30, 2004, compared with $33.2 million, or $0.81 per diluted share, for the same period in 2003. Funds from operations totaled $71.5 million, or $1.39 per diluted share, for the six months ended June 30, 2004, compared with $56.7 million, or $1.39 per diluted share, for the same period in 2003.
We had a total outstanding debt balance of $1.0 billion at June 30, 2004, as compared with $833.5 million at June 30, 2003, and stockholders' equity of $1.2 billion, which represents a debt to total book capitalization ratio of 47 percent. The debt to total market capitalization at June 30, 2004 was 36 percent. Our coverage ratio of EBITDA to interest was 3.21 to 1.00 for the six months ended June 30, 2004.
Straight-line Rent. We recorded $2.5 million and $9.1 million of straight-line rent for the three and six months ended June 30, 2004, respectively. Straight-line rent is net of $2.4 million and $3.0 million in cash payments outside the normal monthly rental payments for the three and six month periods, respectively. Based upon a review of the existing portfolio, we reduced our recognition of straight-line rent for the second quarter by $2.5 million.
Outlook for 2004 and 2005. Going forward, most of our master leases will incorporate annual rental escalators based on the lesser of a Consumer Price Index factor or a fixed basis point increase. Because the increases are not known at the commencement of the lease, straight-lining the average rental rate over the life of the lease is not required.
Therefore, primarily due to our revised straight-line rent expectations, we are adjusting our 2004 guidance and now expect to report net income available to common stockholders in the range of $1.49 to $1.54 per diluted share, down from $1.68 to $1.73 per diluted share, and FFO in the range of $2.87 to $2.92 per diluted share, down from $2.99 to $3.04 per diluted share. We expect to record straight-line rent of approximately $18 million to $20 million for the full year 2004, down from previous expectations of $24 million to $28 million. These expectations exclude any additional payments outside the normal monthly rental payments. As previously stated, we are also increasing our net new investment guidance for 2004 to a range of $400 million to $500 million.
We are initiating guidance for 2005 and expect to report net income available to common stockholders in the range of $1.47 to $1.55 per diluted share, and FFO in the range of $2.98 to $3.06 per diluted share. The guidance assumes net new investments of $250 million with leases that will not require rents to be straight-lined. We expect to record straight-line rent of approximately $14 million to $16 million for the full year 2005, before any payments outside the normal monthly rental payments.
Our guidance does not account for any impairments or increased quarterly charges to the loan loss reserve. Additionally, we plan to manage the company to maintain investment grade status with a capital structure consistent with our current profile. Please see Exhibit 15 for a reconciliation of the outlooks for net income and FFO.
Portfolio Update. Eight assisted living facilities stabilized during the quarter and one assisted living facility in fill-up was acquired. We ended the quarter with four assisted living facilities remaining in fill-up, representing two percent of revenues. Only one facility, representing one percent of revenues, has occupancy of less than 50 percent. The facility was a new acquisition in the fourth quarter of 2003.
Supplemental Reporting Measures. We believe that net income, as defined by accounting principles generally accepted in the United States (U.S. GAAP), is the most appropriate earnings measurement. However, we consider funds from operations (FFO) to be a useful supplemental measure of our 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.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. Additionally, we exclude the non-cash provision for loan losses. We believe 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 our operations. Additionally, restrictive covenants in our long-term debt arrangements contain financial ratios based on EBITDA. We primarily utilize EBITDA to measure our interest coverage ratio which represents EBITDA divided by interest expense.
FFO 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. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes. Additionally, FFO is an internal evaluation metric utilized by the Board of Directors to evaluate management. FFO 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 and EBITDA, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see Exhibits 14 and 16 for reconciliations of FFO and EBITDA to net income.
Conference Call Information. We have scheduled a conference call on July 21, 2004, at 9:00 a.m. Eastern to discuss our second quarter results, industry trends, portfolio performance and outlooks for 2004 and 2005. To participate on the webcast, log on to www.hcreit.com or www.fulldisclosure.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 our Web site under the heading Press Releases.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. At June 30, 2004, we had investments in 346 health care facilities in 33 states with 49 operators and had total assets of approximately $2.2 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 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 the possible expansion of our portfolio; the performance of our operators and properties; our ability to enter into agreements with new viable tenants for properties which we take back from financially troubled tenants, if any; our ability to make distributions; our policies and plans regarding investments, financings and other matters; our tax status as a real estate investment trust; our ability to appropriately balance the use of debt and equity; and our ability to access capital markets or other sources of funds. When we use words such as "believe," "expect," "anticipate," or similar expressions, we are making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our expected results may not be achieved, and actual results may differ materially from our 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; compliance with and changes to regulations and payment policies within the health care industry; changes in financing terms; competition within the health care and senior housing industries; and changes in federal, state and local legislation. Finally, we assume 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
-----------------------
2004 2003
-----------------------
Assets
Real estate investments:
Real property owned
Land $ 176,862 $ 131,905
Buildings & improvements 1,812,116 1,431,662
Construction in progress 20,899 35,151
-----------------------
2,009,877 1,598,718
Less accumulated depreciation (182,034) (137,029)
-----------------------
Total real property owned 1,827,843 1,461,689
Loans receivable
Real property loans 216,003 202,287
Subdebt investments 45,023 15,965
-----------------------
261,026 218,252
Less allowance for losses on
loans receivable (8,425) (5,455)
-----------------------
252,601 212,797
-----------------------
Net real estate investments 2,080,444 1,674,486
Other assets:
Equity investments 3,298 7,492
Deferred loan expenses 8,955 6,187
Cash and cash equivalents 33,990 7,953
Receivables and other assets 64,894 49,982
-----------------------
111,137 71,614
-----------------------
Total assets $2,191,581 $1,746,100
=========== ===========
Liabilities and stockholders' equity
Liabilities:
Borrowings under unsecured lines
of credit arrangements $ 41,000 $ 156,900
Senior unsecured notes 825,000 615,000
Secured debt 146,936 61,608
Accrued expenses and other liabilities 17,560 17,282
-----------------------
Total liabilities 1,030,496 850,790
Stockholders' equity:
Preferred stock 116,859 106,150
Common stock 51,546 41,360
Capital in excess of par value 1,106,155 821,897
Treasury stock (850) 0
Cumulative net income 702,800 618,855
Cumulative dividends (814,068) (690,366)
Accumulated other comprehensive income 1 79
Other equity (1,358) (2,665)
-----------------------
Total stockholders' equity 1,161,085 895,310
-----------------------
Total liabilities and stockholders' equity $2,191,581 $1,746,100
=========== ===========
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------ ------------------
2004 2003 2004 2003
------------------ ------------------
Revenues:
Rental income $ 52,846 $ 38,989 $106,504 $ 76,708
Interest income 5,923 5,190 11,636 10,130
Transaction fees and other
income 565 643 1,279 1,235
-------- -------- -------- --------
Gross revenues 59,334 44,822 119,419 88,073
Expenses:
Interest expense 17,216 12,292 35,475 23,397
Provision for depreciation 17,452 10,784 34,244 21,365
General and administrative 3,560 2,847 6,719 5,457
Loan expense 872 680 1,763 1,315
Provision for loan losses 300 250 600 500
-------- -------- -------- --------
Total expenses 39,400 26,853 78,801 52,034
-------- -------- -------- --------
Income from continuing
operations 19,934 17,969 40,618 36,039
Discontinued operations:
Gain (loss) on sales of
properties 1,129 0 1,129 34
Income (loss) from
discontinued
operations, net 366 1,093 607 2,286
-------- -------- -------- --------
1,495 1,093 1,736 2,320
-------- -------- -------- --------
Net income 21,429 19,062 42,354 38,359
Preferred dividends 2,222 2,318 4,492 5,164
-------- -------- -------- --------
Net income available to
common stockholders $ 19,207 $ 16,744 $ 37,862 $ 33,195
======== ======== ======== ========
Average number of common shares
outstanding:
Basic 51,232 40,546 50,919 40,269
Diluted 51,828 41,136 51,577 40,822
Net income available to
common stockholders per share:
Basic $ 0.37 $ 0.41 $ 0.74 $ 0.82
Diluted 0.37 0.41 0.73 0.81
Funds from operations $ 35,760 $ 28,600 $ 71,549 $ 56,674
Funds from operations per share:
Basic $ 0.70 $ 0.71 $ 1.41 $ 1.41
Diluted 0.69 0.70 1.39 1.39
Dividends per share $ 0.60 $ 0.585 $ 1.185 $ 1.17
Health Care REIT, Inc.
Financial Supplement - June 30, 2004
----------------------------------------------------------------------
Portfolio Composition Exhibit 1
($000's)
---------------------
Balance Sheet
Data # Properties # Beds/Units Balance % Balance
----------------------------------------------------
Real Property 322 29,202 $1,827,843 88%
Loans Receivable 24 2,821 216,003 10%
Subdebt
Investments 0 0 45,023 2%
----------------------------------------------------
Total
Investments 346 32,023 $2,088,869 100%
Investment # #
Data Properties Beds/Units Investment(1) % Investment
----------------------------------------------------
Assisted Living
Facilities 218 14,139 $1,193,242 57%
Skilled Nursing
Facilities 120 16,616 748,544 36%
Specialty Care
Facilities 8 1,268 150,278 7%
----------------------------------------------------
Real Estate
Investments 346 32,023 $2,092,064 100%
Notes: (1) Real Estate Investments include gross real estate
investments and credit enhancements which amounted to
$2,088,869,000 and $3,195,000, respectively.
----------------------------------------------------------------------
----------------------------------------------------------------------
Revenue Composition Exhibit 2
($000's)
-------------------
Three Months Ended Six Months Ended
June 30, 2004 June 30, 2004
------------------- -------------------
Revenue by Investment
Type(1)
Real Property $ 54,057 90% $109,198 90%
Loans Receivable 4,915 8% 9,620 8%
Subdebt
Investments 1,108 2% 2,223 2%
------------------- -------------------
Total $ 60,080 100% $121,041 100%
Revenue by Facility
Type(1)
Assisted Living
Facilities $ 33,319 55% $68,952 57%
Skilled Nursing
Facilities 22,369 37% 43,842 36%
Specialty Care
Facilities 4,392 8% 8,247 7%
------------------- -------------------
Total $ 60,080 100% $121,041 100%
Notes: (1) Revenues include gross revenues and revenues from
discontinued operations.
----------------------------------------------------------------------
----------------------------------------------------------------------
Operator Concentration Exhibit 3
($000's)
----------------------
Concentration by
Investment # Properties Investment % Investment
------------------------------------------
Emeritus Corporation 30 $ 229,415 11%
Southern Assisted
Living, Inc. 46 209,905 10%
Commonwealth
Communities L.L.C. 14 200,810 10%
Home Quality
Management, Inc. 32 180,443 9%
Life Care Centers of
America, Inc. 17 125,159 6%
Remaining Operators (44) 207 1,146,332 54%
------------------------------------------
Total 346 $2,092,064 100%
----------------------------------------------------------------------
----------------------------------------------------------------------
Geographic Concentration Exhibit 4
($000's)
------------------------
Concentration by
Region # Properties Investment % Investment
------------- ---------- ------------
South 217 $1,085,110 52%
Northeast 45 415,325 20%
West 45 305,349 15%
Midwest 39 286,280 13%
------------- ---------- ------------
Total 346 $2,092,064 100%
Concentration by
State # Properties Investment % Investment
------------- ---------- ------------
Massachusetts 27 $ 286,437 14%
Florida 42 236,201 11%
North Carolina 44 203,768 10%
Tennessee 27 146,859 7%
Ohio 14 125,818 6%
Remaining States (28) 192 1,092,981 52%
------------- ---------- ------------
Total 346 $2,092,064 100%
----------------------------------------------------------------------
----------------------------------------------------------------------
Committed Investment Exhibit 5
Balances
--------------------
($000's except
Investment per
Bed/Unit)
Committed Investment
# Properties # Beds/Units Balance(1) per Bed/Unit
-------------------------------------------------------
Assisted
Living
Facilities 218 14,139 $1,202,109 $ 85,021
Skilled
Nursing
Facilities 120 16,616 748,544 45,050
Specialty
Care
Facilities 8 1,268 150,278 118,516
-------------------------------------------------------
Total 346 32,023 $2,100,931 -na-
Notes: (1) Committed Balance includes gross real estate
investments, credit enhancements and unfunded construction
commitments for which initial funding had commenced.
----------------------------------------------------------------------
----------------------------------------------------------------------
Lease Up Statistics on Assisted Exhibit 6
Living Facilities ($000's)
--------------------------------
Average Months
Occupancy # Properties in Operation Revenue(1) % Revenue
----------------------------------------------------
0% - 50% 1 6 $ 773 1%
50% - 70% 1 10 471 0%
70% + 2 18 827 1%
----------------------------------------------------
4 -na- $2,071 2%
Notes: (1) Interest and rental income for the six months ended
June 30, 2004.
----------------------------------------------------------------------
----------------------------------------------------------------------
Selected Facility Data Exhibit 7
----------------------
Coverage Data
-------------------
% Payor Mix
---------------- Before After
Mgt. Mgt.
Census Private Medicare Fees Fees
------------------------------------------
Assisted Living Facilities 85% 85% 0% 1.40x 1.18x
Skilled Nursing Facilities 85% 16% 20% 1.97x 1.51x
Specialty Care Facilities 70% 14% 40% 1.91x 1.44x
-------------------
Weighted Averages 1.64x 1.32x
Notes: Data as of March 31, 2004.
----------------------------------------------------------------------
----------------------------------------------------------------------
Credit Support ($000's) Exhibit 8
-----------------------
Balance % Investment
-----------------------
Cross Defaulted $1,976,145 95% of gross real estate investments
Cross
Collateralized 168,768 78% of real property loans receivable
Master Leases 1,484,561 81% of real property owned
Current Capitalization Leverage & Performance
($000's) Ratios
---------------------- ----------------------
Balance % Balance
------------------------
Borrowings Under Debt/Total
Bank Lines $ 41,000 2% Book Cap 47%
Long-Term Debt Debt/Total
Obligations 971,936 45% Market Cap 36%
Stockholders' Interest
Equity 1,161,085 53% Coverage 3.31x 2nd Qtr.
------------------------ 3.21x YTD
Total Book
Capitalization $2,174,021 100%
FFO Payout
Ratio 87% 2nd Qtr.
85% YTD
----------------------------------------------------------------------
----------------------------------------------------------------------
Revenue Maturities Exhibit 9
($000's)
-------------------
Operating Lease Expirations & Loan Maturities
Current Current Lease and
Lease Interest Interest
Year Revenue(1) Revenue(1) Revenue % of Total
-----------------------------------------------------------------
2004 $ 0 $ 141 $ 141 0%
2005 0 1,391 1,391 1%
2006 0 5,616 5,616 2%
2007 0 4,806 4,806 2%
2008 0 3,928 3,928 2%
Thereafter 218,930 6,971 225,901 93%
------------------------------------------------------
Total $218,930 $ 22,853 $ 241,783 100%
Notes: (1) Revenue impact by year, annualized.
----------------------------------------------------------------------
----------------------------------------------------------------------
Debt Maturities and Principal Exhibit 10
Payments ($000's)
-----------------------------
Lines of Senior Secured
Year Credit(1) Notes Debt Total
------------------------------------------------------------------
2004 $ 0 $ 0 $ 1,228 $ 1,228
2005 30,000 0 6,021 36,021
2006 310,000 50,000 2,702 362,702
2007 0 175,000 14,709 189,709
2008 0 100,000 9,879 109,879
2009 0 0 12,938 12,938
2010 0 0 8,948 8,948
Thereafter 0 500,000 90,511 590,511
-------------------------------------------------------
Total $ 340,000 $ 825,000 $ 146,936 $1,311,936
Notes: (1) Reflected at 100% capacity.
----------------------------------------------------------------------
----------------------------------------------------------------------
Investment Activity ($000's) Exhibit 11
----------------------------
Three Months Ended Six Months Ended
June 30, 2004 June 30, 2004
------------------------ -----------------------
Funding by
Investment Type
Real Property $ 70,017 94% $155,407 96%
Loans
Receivable 4,008 5% 5,618 3%
Subdebt
Investments 223 1% 512 1%
------------------------ -----------------------
Total $ 74,248 100% $161,537 100%
Funding by
Facility Type
Assisted Living
Facilities $ 15,684 21% $ 39,611 25%
Skilled Nursing
Facilities 54,215 73% 116,725 72%
Specialty Care
Facilities 4,349 6% 5,201 3%
------------------------ -----------------------
Total $ 74,248 100% $161,537 100%
----------------------------------------------------------------------
----------------------------------------------------------------------
Disposition Activity ($000's) Exhibit 12
-----------------------------
Three Months Ended Six Months Ended
June 30, 2004 June 30, 2004
---------------------- ---------------------
Dispositions by
Investment Type
Real Property $33,808 100% $33,808 100%
Loans Receivable
------- ------ ------- ------
Total $33,808 100% $33,808 100%
Dispositions by
Facility Type
Assisted Living
Facilities $20,006 59% $20,006 59%
Skilled Nursing
Facilities 3,447 10% 3,447 10%
Specialty Care
Facilities 10,355 31% 10,355 31%
------- ------ ------- -----
Total $33,808 100% $33,808 100%
----------------------------------------------------------------------
----------------------------------------------------------------------
Discontinued Operations ($000's) Exhibit 13
--------------------------------
Three Months Six Months
Ended Ended
June 30 June 30
---------------- ----------------
2004 2003 2004 2003
------- ------- ------- -------
Revenues
Rental income $ 746 $3,034 $1,622 $6,075
Expenses
Interest expense 150 869 443 1,641
Provision for depreciation 230 1,072 572 2,148
------- ------- ------- -------
Income (loss) from
discontinued
operations, net $ 366 $1,093 $ 607 $2,286
----------------------------------------------------------------------
----------------------------------------------------------------------
Funds From Operations Exhibit 14
Reconciliation
---------------------
(Amounts in 000's
except per share data)
Three Months Six Months
Ended Ended
June 30 June 30
----------------- ------------------
2004 2003 2004 2003
-------- -------- --------- --------
Net income available to
common stockholders $19,207 $16,744 $37,862 $33,195
Provision for
depreciation(1) 17,682 11,856 34,816 23,513
Loss (gain) on sales of
properties (1,129) 0 (1,129) (34)
-------- -------- --------- --------
Funds from operations $35,760 $28,600 $71,549 $56,674
Average common shares
outstanding:
Basic 51,232 40,546 50,919 40,269
Diluted 51,828 41,136 51,577 40,822
Per share data:
Net income available to
common stockholders
Basic $ 0.37 $ 0.41 $ 0.74 $ 0.82
Diluted 0.37 0.41 0.73 0.81
Funds from operations
Basic $ 0.70 $ 0.71 $ 1.41 $ 1.41
Diluted 0.69 0.70 1.39 1.39
FFO Payout Ratio
Dividends per share $ 0.60 $ 0.585 $ 1.185 $ 1.17
FFO per diluted share $ 0.69 $ 0.70 $ 1.39 $ 1.39
-------- -------- --------- --------
FFO payout ratio 87% 84% 85% 84%
Notes: (1) Provision for depreciation includes provision for
depreciation from discontinued operations.
----------------------------------------------------------------------
----------------------------------------------------------------------
FFO Outlook Reconciliation Exhibit 15
--------------------------
(Amounts in 000's except per share data)
Previous Outlook Current Outlook
------------------- ------------------
Year Ended Year Ended Year Ended
December 31, 2004 December 31, 2004 December 31, 2005
------------------- ------------------ -----------------
Low High Low High Low High
--------- --------- -------- --------- -------- --------
Net income
available to
common
stockholders $86,700 $89,300 $77,479 $80,079 $80,900 $85,300
Loss (gain)
on sales
of properties (1,129) (1,129)
Provision for
deprecia-
tion(1) 68,000 68,000 72,850 72,850 83,000 83,000
--------- -------- --------- -------- --------- --------
Funds from
operations $154,700 $157,300 $149,200 $151,800 $163,900 $168,300
Average common
shares
outstanding
(diluted) 51,750 51,750 52,000 52,000 55,000 55,000
Per share
data (diluted):
Net income
available to
common
stockholders $1.68 $1.73 $1.49 $1.54 $1.47 $1.55
Funds from
operations 2.99 3.04 2.87 2.92 2.98 3.06
Notes: (1) Provision for depreciation includes provision for
depreciation from discontinued operations.
----------------------------------------------------------------------
----------------------------------------------------------------------
EBITDA Reconciliation Exhibit 16
($000's)
-----------------------
Three Months Ended Six Months Ended
June 30 June 30
----------------- ------------------
2004 2003 2004 2003
-------- -------- --------- --------
Net income $ 21,429 $ 19,062 $ 42,354 $ 38,359
Provision for
depreciation(1) 17,682 11,856 34,816 23,513
Interest expense(1) 17,366 13,161 35,918 25,038
Capitalized interest 199 380 336 638
Amortization(2) 1,092 736 2,210 1,924
Provision for loan
losses 300 250 600 500
-------- -------- --------- --------
EBITDA $ 58,068 $ 45,445 $116,234 $ 89,972
Interest Coverage
Ratio
Interest expense(1) $ 17,366 $ 13,161 $ 35,918 $ 25,038
Capitalized interest 199 380 336 638
-------- -------- --------- --------
Total interest 17,565 13,541 36,254 25,676
EBITDA 58,068 45,445 116,234 89,972
-------- -------- --------- --------
Interest coverage
ratio 3.31x 3.36x 3.21x 3.50x
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.