TOLEDO, Ohio, May 2, 2002 (BW HealthWire) -- Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its first quarter of 2002. The company continues to meet its financial and operational expectations.
"We had a very productive first quarter," commented George L. Chapman, chairman and chief executive officer. "We completed investments totaling $101.7 million and continue to see attractive investment opportunities. Moreover, capital remains reasonable and accessible as evidenced by our recent sale of shares to a real estate fund that yielded net proceeds of $23.6 million. We believe that the combination of attractive investment opportunities and supportive capital markets bodes well for the company."
As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2002, of $.585 per share. The dividend represents the 124th consecutive dividend payment. The dividend will be payable May 20, 2002, to shareholders of record on April 30, 2002.
Summary of First Quarter Results
--------------------------------
(In thousands, except per share numbers)
----------------------------------------------------------------------
Three Months Ended Three Months Ended
March 31, 2002 March 31, 2001
----------------------------------------------------------------------
Revenues $37,395 $32,577
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Net Income Available
to Common Shareholders $12,511 $11,827
----------------------------------------------------------------------
Funds From Operations (FFO) $21,188 $18,479
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Net Income Per Diluted Share $0.37 $0.41
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FFO Per Diluted Share $0.63 $0.64
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Dividend Per Share $0.585 $0.585
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FFO Payout Ratio 93% 91%
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Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $21.2 million, or $0.63 per diluted share, for the three months ended March 31, 2002, compared with $18.5 million, or $0.64 per diluted share, for the same period in 2001.
The company had a total outstanding debt balance of $571 million at March 31, 2002, as compared with $430 million at March 31, 2001, and shareholders' equity of $782 million, which represents a debt to total capitalization ratio of 42 percent. For the first three months of 2002, the company's coverage ratio of EBITDA to interest was 3.61 to 1.00.
Portfolio Update
The portfolio results met the company's expectations. The seasoning of the assisted living portfolio is on target. The company ended the year with 18 assisted living facilities remaining in fill-up representing 13 percent of revenues. Only four assisted living facilities have occupancy less than 50 percent.
Outlook for 2002
Based upon the investment activity for the first quarter, the company expects to report FFO in the range of $2.64 to $2.68 per share for the full year 2002.
Conference Call Information
Health Care REIT has scheduled a conference call on May 3, 2002, at 10:00 A.M. EST to discuss its first 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 nursing homes and assisted living facilities. At March 31, 2002, the company had investments in 226 health care facilities in 34 states and had total assets of approximately $1.4 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)
March 31
--------------------------
2002 2001
------------ ------------
Assets
Real estate investments:
Real property owned
Land $ 98,901 $ 77,109
Buildings & improvements 1,044,243 792,745
Construction in progress 0 7,641
------------ ------------
1,143,144 877,495
Less accumulated depreciation (89,221) (59,754)
------------ ------------
Total real property owned 1,053,923 817,741
Loans receivable
Real property loans 240,128 268,377
Subdebt investments 24,212 22,225
------------ ------------
264,340 290,602
Less allowance for losses
on loans receivable (7,111) (6,111)
------------ ------------
257,229 284,491
------------ ------------
Net real estate investments 1,311,152 1,102,232
Other assets:
Equity investments 6,550 5,501
Deferred loan expenses 6,823 3,915
Cash and cash equivalents 8,122 2,537
Receivables and other assets 36,333 27,096
------------ ------------
57,828 39,049
------------ ------------
Total assets $ 1,368,980 $ 1,141,281
============ ============
Liabilities and shareholders' equity
Liabilities:
Borrowings under line
of credit obligations $ 78,000 $ 110,300
Senior unsecured notes 412,250 255,000
Secured debt 81,123 64,835
Accrued expenses and other liabilities 16,047 16,311
------------ ------------
Total liabilities $ 587,420 $ 446,446
Shareholders' equity:
Preferred Stock 150,000 150,000
Common Stock 33,947 28,881
Capital in excess of par value 637,920 529,417
Cumulative net income 528,725 467,491
Cumulative dividends (563,473) (475,907)
Accumulated other comprehensive income (995) (994)
Unamortized restricted stock (4,564) (4,053)
------------ ------------
Total shareholders' equity $ 781,560 $ 694,835
------------ ------------
Total liabilities and shareholders' equity $ 1,368,980 $ 1,141,281
============ ============
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Amounts in thousands except per share data)
Three months ended
March 31
--------------------------
2002 2001
------------ ------------
Revenues:
Operating lease rents $ 30,051 $ 22,608
Interest income 6,787 8,945
Commitment fees and other income 557 890
Prepayment fees 0 134
------------ ------------
Gross Revenues 37,395 32,577
Expenses:
Interest expense $ 9,742 $ 8,112
Provision for depreciation 8,677 6,786
General and administrative 2,261 1,851
Loan expense 577 375
Provision for losses 250 250
------------ ------------
Total Expenses 21,507 17,374
------------ ------------
Net Income 15,888 15,203
Preferred stock dividends 3,377 3,376
------------ ------------
Net Income available
to Common Shareholders $ 12,511 $ 11,827
============ ============
Average number of common shares outstanding:
Basic 32,946 28,617
Diluted 33,693 28,871
Net income per share:
Basic $ 0.38 $ 0.41
Diluted 0.37 0.41
Funds from operations: $ 21,188 $ 18,479
Funds from operations per share:
Basic $ 0.64 $ 0.65
Diluted 0.63 0.64
Dividends per share $ 0.585 $ 0.585
HEALTH CARE REIT, INC.
Financial Supplement -- March 31, 2002
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Portfolio Composition ($000's) Exhibit 1
------------------------------
Balance Sheet Data # Properties # Beds/Units Balance % Balance
--------------------------------------------------
Real Property 188 15,797 $ 1,053,923 80%
Loans Receivable 38 4,528 240,128 18%
Subdebt Investments 0 0 24,212 2%
--------------------------------------------------
Total Investments 226 20,325 $ 1,318,263 100%
Investment Data
# Properties # Beds/Units Investment(1) % Investment
-------------------------------------------------------
Assisted Living
Facilities 159 10,607 $ 837,683 63%
Skilled Nursing
Facilities 60 8,413 402,225 30%
Specialty Care
Facilities 7 1,305 89,215 7%
-------------------------------------------------------
Real Estate
Investments 226 20,325 $ 1,329,123 100%
Investment by
Owner Type # Properties # Beds/Units Investment(1) % Investment
-------------------------------------------------------
Publicly Traded 71 3,977 $ 254,435 19%
Key Private 83 8,764 621,199 47%
Privately Held 72 7,584 453,489 34%
-------------------------------------------------------
Real Estate
Investments 226 20,325 $ 1,329,123 100%
Notes: (1) Real Estate Investments include gross real estate
investments and credit enhancements which amounted to $1,318,263,000
and $10,860,000, respectively.
----------------------------------------------------------------------
----------------------------------------------------------------------
Revenue Composition ($000's) Exhibit 2
----------------------------
Three Months Ended
March 31, 2002 Year-to-Date
------------------- ----------------
Revenue by Investment Type
Real Property $ 30,338 81%
Loans Receivable & Other 6,566 18% (Not Applicable)
Subdebt Investments 491 1%
------------------- ----------------
Total $ 37,395 100%
Revenue by Facility Type
Assisted Living Facilities $ 23,749 63%
Nursing Homes 12,312 33%
Specialty Care Facilities 1,334 4%
------------------- ----------------
Total $ 37,395 100%
Revenue by Owner Type
Publicly Traded $ 7,788 21%
Key Private 18,812 50%
Privately Held 10,795 29%
------------------- ----------------
Total $ 37,395 100%
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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
----------------------------------------------------------------------
2002 $ 0 $ 815 $ 815 2%
2003 3,670 0 3,670 2%
2004 410 2,223 2,633 2%
2005 0 4,715 4,715 2%
2006 5,044 5,065 10,109 7%
Thereafter 114,173 16,465 130,638 85%
--------------------------------------------------------
Total $ 123,297 $ 29,283 $ 152,580 100%
Notes: (1) Revenue impact by year, annualized
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----------------------------------------------------------------------
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 159 10,607 $ 839,107 $ 79,109
Skilled Nursing
Facilities 60 8,413 402,225 47,810
Specialty Care
Facilities 7 1,305 89,215 68,364
------------------------------------------------------
Total 226 20,325 $ 1,330,547 -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
-------------------------------
Concentration by Investment # Properties Investment % Investment
----------------------------------------
Merrill Gardens 21 $ 149,550 11%
Alterra Healthcare 46 109,955 8%
Home Quality Management 18 109,106 8%
Commonwealth 7 95,820 7%
Life Care Centers
of America, Inc. 13 83,841 6%
Remaining Operators 121 780,851 60%
--------------------------------------
Total 226 $1,329,123 100%
Concentration by Revenue # Properties Revenue(1) % Revenue
--------------------------------------
Merrill Gardens 21 $ 3,711 10%
Alterra Healthcare 46 3,639 10%
Home Quality Management 18 3,164 8%
Life Care Centers
of America, Inc. 13 2,437 6%
Atria Senior Quarters 9 2,356 6%
Remaining Operators 119 22,088 60%
--------------------------------------
Total 226 $ 37,395 100%
Notes: (1) Three months ended March 31, 2002
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----------------------------------------------------------------------
Selected Facility Data Exhibit 6
----------------------
Coverage Data
---------------------
% Payor Mix Before After
------------------
Census Private Medicare Mgt. Fees Mgt. Fees
----------------------------------------------------
Assisted Living
Facilities 86% 100% 0% 1.29x 1.11x
Nursing Homes 84% 20% 13% 1.77x 1.32x
Specialty Care
Facilities 58% 19% 31% 2.06x 1.47x
---------------------
Weighted Averages 1.51x 1.20x
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----------------------------------------------------------------------
Security Deposits & Other Credit Support ($000's) Exhibit 7
-------------------------------------------------
Balance % Investment
----------------------------
Cross Defaulted $ 1,258,346 95% of gross real estate investments
Cross Collateralized 202,908 86% of mortgage loans
Current Capitalization ($000's)
-------------------------------
Balance % Balance Leverage & Performance Ratios
Borrowings Under ---------------------- -----------------------------
Bank Lines $ 78,000 6% Debt/Total Book Cap 42%
Long-Term Debt
Obligations 493,373 36% Debt/Total Mkt. Cap 34%
Shareholders'
Equity 781,610 58% Interest
---------------------- Coverage 3.61x 1st Qtr.
Total Book
Capitalization $ 1,352,983 100% 3.82x L12M
FFO Payout
Ratio 93% 1st Qtr.
94% L12M
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----------------------------------------------------------------------
Debt Maturities and Principal Payments ($000's) Exhibit 8
-----------------------------------------------
Year Lines of Credit(1) Senior Notes Secured Debt(1) Total
----------------------------------------------------------------------
2002 $ 25,000 $ 12,250 $ 368 $ 37,618
2003 150,000 35,000 400 185,400
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 44,727 44,727
----------------------------------------------------------
Total $ 175,000 $ 412,250 $ 112,123 $ 699,373
Notes: (1) Lines of Credit reflect 100% capacity
----------------------------------------------------------------------
----------------------------------------------------------------------
Investment Activity ($000's) Exhibit 9
----------------------------
Three Months Ended
March 31, 2002 Year-to-Date
------------------ ----------------
Funding by Investment Type
Real Property $ 99,907 98%
Mortgage & Other Loans 738 1% (Not Applicable)
Subdebt Investments 1,052 1%
------------------ ----------------
Total $ 101,697 100%
Real Estate Investments
Assisted Living Facilities $ 63,430 63%
Nursing Homes 35,880 36%
Specialty Care Facilities 1,335 1%
------------------ ----------------
Total $ 100,645 100%
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----------------------------------------------------------------------
Geographic Concentration ($000's) Exhibit 10
---------------------------------
Concentration by Region # Properties Investment % Investment
----------------------------------------
South 126 $ 589,672 44%
Northeast 35 300,329 23%
West 33 236,298 18%
Midwest 32 202,824 15%
----------------------------------------
Total 226 $ 1,329,123 100%
Concentration by State # Properties Investment % Investment
----------------------------------------
Massachusetts 15 $ 149,415 11%
Florida 30 149,125 11%
Ohio 13 106,721 8%
Texas 29 100,549 8%
California 11 88,181 7%
Remaining States 128 735,132 55%
----------------------------------------
Total 226 $ 1,329,123 100%
Revenue by State(1) # Properties Revenue(1) % Revenue
----------------------------------------
Florida 30 $ 3,816 10%
Massachusetts 15 3,556 10%
Ohio 13 2,229 6%
Texas 29 2,715 7%
California 11 1,807 5%
Remaining States 128 23,272 62%
----------------------------------------
Total 226 $ 37,395 100%
Notes: (1) Three months ended March 31, 2002
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----------------------------------------------------------------------
Funds From Operations Computation ($000's) Exhibit 11
------------------------------------------
Three Months Ended
March 31, 2002 Year-to-Date
---------------------------------------
Net Income Available
to Common Shareholders $ 12,511
Add: Depreciation Expense 8,677
Loss on Extinguishment 0 (Not Applicable)
Net Loss on Sale
of Properties 0
Deduct: Gain on Sale of Assets 0
Prepayment Fees 0
---------------------------------------
Funds From Operations (FFO) $ 21,188
Average Common Shares Outstanding:
Basic 32,946
Diluted 33,693
FFO Per Common Share:
Basic $ 0.64
Diluted $ 0.63
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----------------------------------------------------------------------
Lease Up Statistics on Assisted Living Facilities Exhibit 12
-------------------------------------------------
Occupancy Facilities Months in Operation Revenue(1) % of Revenue
---------------------------------------------------------
00% - 50% 4 11.0 $ 1,192 3%
50% - 70% 6 22.0 $ 1,930 5%
70% + 8 24.9 $ 2,012 5%
Notes: (1) Interest and rental income for quarter ended March 31, 2002
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CONTACT: Health Care REIT, Inc.
Ray Braun or Mike Crabtree, 419/247-2800
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