TOLEDO, Ohio--(BW HealthWire)--July 16, 2002--Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its second quarter of 2002. The company continues to meet its financial and operational expectations.
"We are pleased with the company's performance for the quarter," commented George L. Chapman, chief executive officer. "Our stock has performed well, allowing us to access the capital markets and execute a 3.45 million share offering in May. With our solid investment pipeline, we were able to close $124 million of acquisitions and investments during the quarter. We continue to see attractive acquisitions in the market and have the financial flexibility to capitalize on these growth opportunities. Given the current market conditions and our strong balance sheet, we believe we will be able to close on an additional $100 million of net investments this year, with a year-end goal of $292 million."
The Board of Directors declared a dividend for the quarter ended June 30, 2002, of $0.585 per share. The dividend represents the 125th consecutive dividend payment. The dividend will be payable August 20, 2002, to shareholders of record on July 31, 2002.
Summary of Second Quarter Results
---------------------------------
(In thousands, except per share numbers)
Three Months Ended Three Months Ended
June 30, 2002 June 30, 2001
Revenues $40,589 $32,742
Net Income Available
to Common Shareholders $13,490 $11,747
Funds From Operations (FFO) $23,942 $18,716
Net Income Per Diluted Share $0.37 $0.40
FFO Per Diluted Share $0.66 $0.64
Dividend Per Share $0.585 $0.585
FFO Payout Ratio 89% 91%
Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $23.9 million, or $0.66 per diluted share, for the second three months of 2002, compared with $18.7 million, or $0.64 per diluted share, for the same period in 2001.
Summary of Year to Date Results
-------------------------------
(In thousands, except per share numbers)
Six Months Ended Six Months Ended
June 30, 2002 June 30, 2001
Revenues $77,984 $65,319
Net Income Available
to Common Shareholders $26,002 $23,574
Funds From Operations (FFO) $45,131 $37,195
Net Income Per Diluted Share $0.74 $0.81
FFO Per Diluted Share $1.29 $1.28
Dividend Per Share $1.170 $1.170
FFO Payout Ratio 91% 91%
FFO totaled $45.1 million, or $1.29 per diluted share for the six months ended June 30, 2002, compared with $37.2 million, or $1.28 per diluted share, for the same period in 2001.
The company had a total outstanding debt balance of $576.3 million at June 30, 2002, as compared with $371.3 million in second quarter 2001, and shareholders' equity of $871.2 million, which represents a debt to total capitalization ratio of 40 percent. The company's coverage ratio of EBITDA to interest was 3.80 to 1.00 for the twelve months ended June 30, 2002.
Portfolio Update. The portfolio results met the company's expectations. The seasoning of the assisted living portfolio is on target. The company ended the quarter with 17 assisted living facilities remaining in fill-up representing 10 percent of revenues. Four assisted living facilities, representing 3 percent of revenues, have occupancy less than 50 percent.
Outlook for 2002 & 2003. Based upon the investment activity through the second quarter, the company expects to report FFO in the range of $2.64 to $2.68 per share for the full year 2002 and $2.80 to $2.85 for the year 2003.
Conference Call Information. Health Care REIT, Inc. has scheduled a conference call on July 17, 2002, at 11:00 A.M. EST to discuss its second quarter 2002 performance, industry trends, portfolio performance, and its outlook for the remainder of 2002. To participate on the webcast, log on to www.hcreit.com or www.ccbn.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 skilled nursing facilities and assisted living facilities. At June 30, 2002, the company had investments in 229 health care facilities in 34 states and had total assets of approximately $1.5 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. These forward-looking statements concern the possible expansion of our portfolio; the performance of our operators and properties; our ability to obtain 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 "believes", "expects", "anticipates", 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: 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)
(Amounts in thousands)
June 30
--------------------------
2002 2001
----------- -----------
Assets
Real estate investments:
Real property owned
Land $ 106,299 $ 77,622
Buildings & improvements 1,155,541 812,767
Construction in progress 0 10,314
----------- -----------
1,261,840 900,703
Less accumulated depreciation (98,637) (65,443)
----------- -----------
Total real property owned 1,163,203 835,260
Loans receivable
Real property loans 226,158 255,367
Subdebt investments 24,132 23,269
----------- -----------
250,290 278,636
Less allowance for losses
on loans receivable (7,361) (6,361)
----------- -----------
242,929 272,275
----------- -----------
Net real estate investments 1,406,132 1,107,535
Other assets:
Equity investments 6,891 5,924
Deferred loan expenses 6,358 3,549
Cash and cash equivalents 9,256 5,854
Receivables and other assets 37,667 29,891
----------- -----------
60,172 45,218
----------- -----------
Total assets $ 1,466,304 $ 1,152,753
=========== ===========
Liabilities and shareholders' equity
Liabilities:
Borrowings under line
of credit obligations $ 99,000 $ 61,500
Senior unsecured notes 365,000 245,000
Secured debt 112,033 64,818
Accrued expenses and
other liabilities 19,114 15,988
----------- -----------
Total liabilities $ 595,147 $ 387,306
Shareholders' equity:
Preferred Stock 135,000 150,000
Common Stock 38,116 32,389
Capital in excess of par value 743,875 601,501
Cumulative net income 545,557 482,614
Cumulative dividends (586,669) (496,178)
Accumulated other
comprehensive income (558) (1,159)
Unamortized restricted stock (4,164) (3,720)
----------- -----------
Total shareholders' equity $ 871,157 $ 765,447
----------- -----------
Total liabilities and
shareholders' equity $ 1,466,304 $ 1,152,753
=========== ===========
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Amounts in thousands except per share data)
Three months ended Six months ended
June 30 June 30
-------------------- --------------------
2002 2001 2002 2001
-------------------- --------------------
Revenues:
Operating lease rents $ 32,733 $ 23,863 $ 62,784 $ 46,471
Interest income 7,107 7,842 13,894 16,787
Commitment fees
and other income 749 1,037 1,306 1,927
Prepayment fees 0 0 0 134
-------- -------- -------- --------
Gross Revenues 40,589 32,742 77,984 65,319
Expenses:
Interest expense $ 10,268 $ 7,977 $ 20,009 $ 16,089
Provision for
depreciation 9,623 6,992 18,300 13,778
General and
administrative 2,285 2,034 4,546 3,885
Loan expense 580 389 1,157 764
Impairment of assets 550 0 550 0
Provision for losses 250 250 500 500
-------- -------- -------- --------
Total Expenses 23,556 17,642 45,062 35,016
-------- -------- -------- --------
Income from continuing
operations and before
extraordinary item 17,033 15,100 32,922 30,303
Discontinued operations:
Gain on sale of properties 145 23 145 23
Income from discontinued
operations, net 56 0 56 0
-------- -------- -------- --------
201 23 201 23
Income before
extraordinary item 17,234 15,123 33,123 30,326
Loss on extinguishment
of debt (403) 0 (403) 0
-------- -------- -------- --------
Net income 16,831 15,123 32,720 30,326
Preferred dividends 3,341 3,376 6,718 6,752
-------- -------- -------- --------
Net income available to
common shareholders $ 13,490 $ 11,747 $ 26,002 $ 23,574
======== ======== ======== ========
Average number of common
shares outstanding:
Basic 35,446 28,985 34,451 28,802
Diluted 36,223 29,402 34,954 29,137
Net income per share:
Basic $ 0.38 $ 0.41 $ 0.75 $ 0.82
Diluted 0.37 0.40 0.74 0.81
Funds from operations: $ 23,942 $ 18,716 $ 45,131 $ 37,195
Funds from operations
per share:
Basic $ 0.68 $ 0.65 $ 1.31 $ 1.29
Diluted 0.66 0.64 1.29 1.28
Dividends per share $ 0.585 $ 0.585 $ 1.170 $ 1.170
HEALTH CARE REIT, INC.
Financial Supplement - June 30, 2002
Portfolio Composition ($000's) Exhibit 1
------------------------------
# # %
Balance Sheet Data Properties Beds/Units Balance Balance
-------------------------------------------------
Real Property 198 17,106 $1,163,203 82%
Loans Receivable 31 3,679 226,158 16%
Subdebt Investments 0 0 24,132 2%
-------------------------------------------------
Total Investments 229 20,785 $1,413,493 100%
# # %
Investment Data Properties Beds/Units Investment(1) Investment
-------------------------------------------------
Assisted Living
Facilities 157 10,513 $ 875,071 61%
Skilled Nursing
Facilities 65 8,989 452,805 32%
Specialty Care
Facilities 7 1,283 96,477 7%
-------------------------------------------------
Real Estate
Investments 229 20,785 $1,424,353 100%
Investment by # # %
Owner Type Properties Beds/Units Investment(1) Investment
-------------------------------------------------
Publicly Traded 61 3,616 $ 242,859 17%
Key Private 81 8,473 626,684 44%
Privately Held 87 8,696 554,810 39%
-------------------------------------------------
Real Estate
Investments 229 20,785 $1,424,353 100%
Notes: (1) Real Estate Investments include gross real estate
investments and credit enhancements which amounted to $1,413,493,000
and $10,860,000, respectively.
Revenue Composition ($000's) Exhibit 2
----------------------------
Three Months Ended Six Months Ended
June 30, 2002(1) June 30, 2002(1)
------------------ ------------------
Revenue by Investment Type
Real Property $33,324 82% $63,671 82%
Loans Receivable & Other 7,264 17% 13,763 17%
Subdebt Investments 245 1% 794 1%
------------------ ------------------
Total $40,833 100% $78,228 100%
Revenue by Facility Type
Assisted Living Facilities $25,951 64% $49,699 64%
Skilled Nursing Facilities 13,591 33% 25,901 33%
Specialty Care Facilities 1,291 3% 2,628 3%
------------------ ------------------
Total $40,833 100% $78,228 100%
Revenue by Owner Type
Publicly Traded $ 8,777 22% $16,737 21%
Key Private 17,222 42% 35,770 46%
Privately Held 14,834 36% 25,721 33%
------------------ ------------------
Total $40,833 100% $78,228 100%
Notes: (1) Revenues include gross revenues, gain on sales, and
revenues from discontinued operations.
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
---------------------------------------------------------------------
2002 $ 0 $ 905 $ 905 1%
2003 3,670 0 3,670 2%
2004 410 2,974 3,384 2%
2005 0 4,025 4,025 3%
2006 5,044 5,336 10,380 6%
Thereafter 124,688 12,673 137,361 86%
---------------------------------------------------------
Total $ 133,812 $ 25,913 $ 159,725 100%
Notes: (1) Revenue impact by year, annualized
Committed Investment Balances Exhibit 4
------------------------------
($000's except Investment per Bed/Unit)
Committed Investment
# Properties # Beds/Units Balance(1) per Bed/Unit
-----------------------------------------------------
Assisted Living
Facilities 157 10,513 $ 877,411 $ 83,460
Skilled Nursing
Facilities 65 8,989 451,564 50,235
Specialty Care
Facilities 7 1,283 96,477 75,196
-----------------------------------------------------
Total 229 20,785 $ 1,425,452 -na-
Notes: (1) Committed Balance includes gross real estate investments,
credit enhancements and unfunded commitments for which initial funding
had commenced.
Operator Concentration ($000's) Exhibit 5
-------------------------------
Concentration by Investment # Properties Investment % Investment
--------------------------------------
Merrill Gardens 21 $ 150,779 11%
Commonwealth Communities 10 144,868 10%
Home Quality Management 19 116,228 8%
Alterra Healthcare 45 107,837 8%
Life Care Centers of
America, Inc. 13 83,276 6%
Remaining Operators 121 821,365 57%
--------------------------------------
Total 229 $1,424,353 100%
Concentration by Revenue # Properties Revenue (1) % Revenue
--------------------------------------
Alterra Healthcare 45 $ 7,428 9%
Merrill Gardens 21 7,271 9%
Home Quality Management 19 6,747 9%
Commonwealth Communities 10 6,688 9%
Life Care Centers of
America, Inc. 13 4,809 6%
Remaining Operators 121 45,285 58%
--------------------------------------
Total 229 $ 78,228 100%
Notes: (1) Six months ended June 30, 2002
Selected Facility Data Exhibit 6
----------------------
Coverage Data
% Payor Mix -------------------
-------------------- Before After
Census Private Medicare Mgt. Fees Mgt. Fees
----------------------------------------------------
Assisted Living
Facilities 86% 100% 0% 1.32x 1.12x
Skilled Nursing
Facilities 84% 20% 14% 1.79x 1.34x
Specialty Care
Facilities 61% 12% 25% 3.03x 2.41x
-------------------
Weighted Averages 1.61x 1.29x
Security Deposits & Other Credit Support ($000's) Exhibit 7
-------------------------------------------------
Balance % Investment
------------------------
Cross Defaulted $1,365,903 96% of gross real estate
investments
Cross Collateralized 189,759 84% of mortgage loans
Current
Capitalization Leverage & Performance
($000's) Balance % Balance Ratios
--------- -------------------- ----------------------
Borrowings Under
Bank Lines $ 99,000 7% Debt/Total Book Cap 40%
Long-Term Debt
Obligations 477,033 33% Debt/Total Cap Mkt. 31%
Shareholders' Equity 871,157 60% Interest
-------------------- Coverage 3.71x 2nd Qtr.
3.80x L12M
Total Book FFO Payout
Capitalization $1,447,190 100% Ratio 89% 2nd Qtr.
93% L12M
Debt Maturities and Principal Payments ($000's) Exhibit 8
-----------------------------------------------
Year Lines of Credit(1) Senior Notes Secured Debt(1) Total
-----------------------------------------------------------------
2002 $ 0 $ 0 $ 368 $ 368
2003 175,000 0 400 175,400
2004 0 40,000 64,474 104,474
2005 0 0 862 862
2006 0 50,000 398 50,398
2007 0 175,000 430 175,430
2008 0 100,000 464 100,464
Thereafter 0 0 44,637 44,637
-----------------------------------------------------
Total $175,000 $365,000 $112,033 $652,033
Notes: (1) Lines of Credit reflect 100% capacity
Investment Activity ($000's) Exhibit 9
----------------------------
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2002
------------------ ------------------
Funding by Investment Type
Real Property $107,023 87% $206,930 92%
Mortgage & Other Loans 16,637 13% 17,375 7%
Subdebt Investments 59 0% 1,112 1%
------------------ ------------------
Total $123,719 100% $225,417 100%
Real Estate Investments
Assisted Living Facilities $ 70,566 57% $135,049 60%
Skilled Nursing Facilities 45,887 37% 81,767 36%
Specialty Care Facilities 7,266 6% 8,601 4%
------------------ ------------------
Total $123,719 100% $225,417 100%
Geographic Concentration ($000's) Exhibit 10
---------------------------------
Concentration by Region # Properties Investment % Investment
-----------------------------------------
South 124 $ 611,878 43%
Northeast 38 349,193 25%
West 33 247,735 17%
Midwest 34 215,547 15%
-----------------------------------------
Total 229 $1,424,353 100%
Concentration by State # Properties Investment % Investment
-----------------------------------------
Massachusetts 17 $ 187,949 13%
Florida 30 150,352 11%
Ohio 13 105,790 7%
Texas 29 99,852 7%
California 10 85,503 6%
Remaining States 130 794,907 56%
-----------------------------------------
Total 229 $1,424,353 100%
Revenue by State(1) # Properties Revenue(1) % Revenue
-----------------------------------------
Florida 30 $ 10,049 13%
Massachusetts 17 9,111 11%
Texas 29 6,507 8%
Ohio 13 5,974 8%
California 10 5,205 7%
Remaining States 130 41,382 53%
-----------------------------------------
Total 229 $ 78,228 100%
Notes: (1) Six months ended June 30, 2002
Funds From Operations Computation ($000's) Exhibit 11
------------------------------------------
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2002
-------------------------------------
Net Income Available to
Common Shareholders $ 13,490 $ 26,002
Add: Depreciation Expense 9,623 18,300
Depreciation Expense-
Discontinued Ops 21 21
Loss on Extinguishment 403 403
Loss on Sale of Assets 0 0
Asset Impairment 550 550
Deduct: Gain on Sale of Assets 145 145
Prepayment Fees 0 0
-------------------------------------
Funds From Operations (FFO) $ 23,942 $ 45,131
Average Common Shares Outstanding:
Basic 35,446 34,451
Diluted 36,223 34,954
FFO Per Common Share:
Basic $ 0.68 $ 1.31
Diluted $ 0.66 $ 1.29
Disposition Activity Exhibit 12
--------------------
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2002
------------------ ----------------
Dispositions by Investment Type
Real Property $ 1,355 4% $ 1,355 4%
Mortgage & Other Loans 31,455 96% 31,455 96%
------- ---- ------- ----
Total $32,810 100% $32,810 100%
======= ==== ======= ====
Real Estate Investments
Assisted Living Facilities $32,810 100% $32,810 100%
Skilled Nursing Facilities 0 0% 0 0%
Specialty Care Facilities 0 0% 0 0%
------- ---- ------- ----
Total $32,810 100% $32,810 100%
======= ==== ======= ====
Lease Up Statistics on Assisted Living Facilities Exhibit 13
-------------------------------------------------
Months in % of
Occupancy Facilities Operation Revenue (1) Revenue
-----------------------------------------------------
00% - 50% 4 14.0 $ 2,722 3%
50% - 70% 5 25.2 $ 2,068 3%
70% + 8 28.4 $ 3,105 4%
Notes: (1) Interest and rental income for the six months ended
June 30, 2002.
--30--slb/cl* kmr/cl
| CONTACT: | Health Care REIT, Inc. |
|---|---|
| Ray Braun, 419/247-2800 | |
| Mike Crabtree, 419/247-2800 |