TOLEDO, Ohio--(BW HealthWire)--Feb. 4, 2002--Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its fourth quarter and year ended December 31, 2001. The company continues to meet financial and operational expectations.
"We are pleased not only with our fourth quarter financial results, but also that we attained the company's goals for 2001," stated George Chapman, chairman and chief executive officer. "We achieved equity REIT status, successfully accessed the capital markets with both equity and debt offerings, and invested the proceeds to surpass our new investment goal of $100-$125 million for the second half of the year. The funds from operations ("FFO") from these new investments and our anticipated investments in 2002 are expected to return our dividend payout ratio to the mid-80 percent range by the end of 2002. Furthermore, our portfolio seasoning is on track. We ended the year with 85 percent stabilized properties, no construction properties, and only four fill-up properties below 50 percent occupancy."
As previously announced, the Board of Directors voted to declare a dividend for the quarter ended December 31, 2001, of $0.585 per share. The dividend represents the 123rd consecutive dividend payment. The dividend will be payable February 20, 2002, to shareholders of record on January 31, 2002.
Summary of Fourth Quarter Results
---------------------------------
(In thousands, except per share numbers)
---------------------------- ------------------- ---------------------
Three Months Ended Three Months Ended
December 31, 2001 December 31, 2000
---------------------------- ------------------- ---------------------
Revenues $33,694 $33,775
Net Income Available to
Common Shareholders $9,881 $11,434
Funds From Operations (FFO) $20,459 $18,969
Net Income Per Diluted Share $0.30 $0.40
FFO Per Diluted Share $0.62 $0.66
Dividend Per Share $0.585 $0.585
FFO Payout Ratio 94% 89%
---------------------------- ------------------- ---------------------
Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $20.5 million, or $0.62 per diluted share, for the latest three months, compared with $19.0 million, or $0.66 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)
---------------------------- ------------------- ---------------------
Year Ended Year Ended
December 31, 2001 December 31, 2000
---------------------------- ------------------- ---------------------
Revenues $133,870 $136,954
Net Income Available to
Common Shareholders $47,044 $54,565
Funds From Operations (FFO) $77,744 $77,531
Net Income Per Diluted Share $1.52 $1.91
FFO Per Diluted Share $2.51 $2.71
Dividend Per Share $2.340 $2.335
FFO Payout Ratio 93% 89%
---------------------------- ------------------- ---------------------
FFO totaled $77.7 million, or $2.51 per diluted share for the year ended December 31, 2001, compared with $77.5 million, or $2.71 per diluted share, for the same period in 2000.
The company had a total outstanding debt balance of $491 million at December 31, 2001, up from $440 million in fourth quarter 2000, and shareholders' equity of $758 million, which represents a debt to total capitalization ratio of 39 percent. For the year ended December 31, 2001, the company's coverage ratio of EBITDA to interest was 3.85 to
-
1.0. New Facility Investments. The company's investment activity for the quarter totaled $118 million, including the acquisition of three assisted living facilities with a total of 130 beds and ten nursing facilities with a total of 1,456 beds.
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 21 assisted living facilities remaining in fill-up representing less than 15 percent of revenues. Only four assisted living facilities have occupancy less than 50 percent.
Outlook for 2002. The company believes FFO will be in the range of $2.62 to $2.66 for 2002.
Conference Call Information. Health Care REIT has scheduled a conference call on February 4, 2002, at 11:00 A.M. EST to discuss its year end 2001 performance, industry trends, portfolio performance, and its outlook for 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 December 31, 2001, the company had investments in 214 health care facilities in 33 states and had total assets of approximately $1.3 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)
December 31
--------------------------
2001 2000
--------------------------
Assets
Real estate investments:
Real property owned
Land $ 89,601 $ 74,319
Buildings & improvements 947,794 770,660
Construction in progress 0 11,976
----------- -----------
1,037,395 856,955
Less accumulated depreciation (80,544) (52,968)
----------- -----------
Total real property owned 956,851 803,987
Loans receivable
Real property loans 240,126 301,321
Subdebt investments 23,448 21,972
----------- -----------
263,574 323,293
Less allowance for losses on
loans receivable (6,861) (5,861)
----------- -----------
256,713 317,432
----------- -----------
Net real estate investments 1,213,564 1,121,419
Other assets:
Equity investments 6,498 5,450
Deferred loan expenses 7,190 2,939
Cash and cash equivalents 9,826 2,844
Receivables and other assets 32,765 24,252
----------- -----------
56,279 35,485
----------- -----------
Total assets $ 1,269,843 $ 1,156,904
=========== ===========
Liabilities and shareholders' equity
Liabilities:
Borrowings under line of
credit obligations $ 0 $ 119,900
Senior unsecured notes 412,250 255,000
Secured debt 78,966 64,852
Accrued expenses and
other liabilities 20,757 18,545
----------- -----------
Total liabilities $ 511,973 $ 458,297
Shareholders' equity:
Preferred Stock 150,000 150,000
Common Stock 32,740 28,806
Capital in excess of par value 608,942 528,138
Cumulative net income 512,837 452,288
Cumulative dividends (540,946) (455,676)
Accumulated other
comprehensive income (923) (744)
Unamortized restricted stock (4,780) (4,205)
----------- -----------
Total shareholders' equity $ 757,870 $ 698,607
----------- -----------
Total liabilities and
shareholders' equity $ 1,269,843 $ 1,156,904
=========== ===========
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Amounts in thousands except per share data)
Three months ended Twelve months ended
December 31 December 31
--------------------- ---------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Revenues:
Operating lease rents $ 26,761 $ 22,328 $ 98,988 $ 88,312
Interest income 7,320 9,655 31,294 41,064
Commitment fees
and other income 987 1,179 3,848 5,837
Prepayment fees 0 0 990 57
Gain/(loss) on sale of
properties (1,374) 613 (1,250) 1,684
--------- --------- --------- ---------
Gross Revenues 33,694 33,775 133,870 136,954
Expenses:
Interest expense $ 8,297 $ 8,529 $ 32,028 $ 34,622
Provision for
depreciation 9,204 6,148 30,227 22,706
Loss on investment 0 2,000 0 2,000
General and
administrative 2,122 1,751 8,078 7,405
Loan expense 563 287 1,775 1,166
Provision for losses 250 250 1,000 1,000
--------- --------- --------- ---------
Total Expenses 20,436 18,965 73,108 68,899
--------- --------- --------- ---------
Net Income before
extraordinary item 13,258 14,810 60,762 68,055
Loss on extinguishment
of debt 0 0 213 0
--------- --------- --------- ---------
Net Income 13,258 14,810 60,549 68,055
Preferred stock dividends 3,377 3,376 13,505 13,490
--------- --------- --------- ---------
Net Income available to
Common Shareholders $ 9,881 $ 11,434 $ 47,044 $ 54,565
========= ========= ========= =========
Average number of
common shares
outstanding:
Basic 32,345 28,537 30,522 28,418
Diluted 33,072 28,762 31,027 28,643
Net income per share:
Basic $ 0.31 $ 0.40 $ 1.54 $ 1.92
Diluted 0.30 0.40 1.52 1.91
Funds from operations: $ 20,459 $ 18,969 $ 77,744 $ 77,531
Funds from operations
per share:
Basic $ 0.63 $ 0.66 $ 2.55 $ 2.73
Diluted 0.62 0.66 2.51 2.71
Dividends per share $ 0.585 $ 0.585 $ 2.340 $ 2.335
HEALTH CARE REIT, INC.
Financial Supplement - December 31, 2001
Portfolio Composition ($000's) Exhibit 1
------------------------------
Balance Sheet
Data # Properties # Beds/Units Balance % Balance
------------- ------------ ------------- ------------
Real Property 176 14,551 $ 956,851 78%
Loans Receivable 38 4,528 240,126 20%
Subdebt Investments 0 0 23,448 2%
------------- ------------ ------------- ------------
Total Investments 214 19,079 $ 1,220,425 100%
Investment Data # Properties # Beds/Units Investment(1) % Investment
------------- ------------ ------------- ------------
Assisted Living
Facilities 150 9,841 $ 774,285 63%
Nursing Homes 57 7,933 369,253 30%
Specialty Care
Facilities 7 1,305 88,312 7%
------------- ------------ ------------- ------------
Real Estate
Investments 214 19,079 $ 1,231,850 100%
Investment by
Owner Type # Properties # Beds/Units Investment(1) % Investment
------------- ------------ ------------- ------------
Publicly Traded 64 3,361 $ 204,759 17%
Key Private 83 8,716 622,201 50%
Privately Held 67 7,002 404,890 33%
------------- ------------ ------------- ------------
Real Estate
Investments 214 19,079 $ 1,231,850 100%
Notes: (1) Real Estate Investments include gross real estate
investments and credit enhancements which amounted
to $1,220,425,000 and $11,425,000, respectively.
Revenue Composition ($000's) Exhibit 2
----------------------------
Three Months Ended Year Ended
December 31, 2001 December 31, 2001
-------- -------- -------- --------
Revenue by Investment Type
Real Property $ 26,035 77% $ 99,937 75%
Loans Receivable & Other 7,134 21% 31,997 24%
Subdebt Investments 525 2% 1,936 1%
-------- -------- -------- --------
Total $ 33,694 100% $133,870 100%
Revenue by Facility Type
Assisted Living Facilities $ 21,371 63% $ 87,493 65%
Nursing Homes 8,272 25% 32,200 24%
Specialty Care Facilities 4,051 12% 14,177 11%
-------- -------- -------- --------
Total $ 33,694 100% $133,870 100%
Revenue by Owner Type
Publicly Traded $ 7,355 22% $ 31,764 24%
Key Private 16,684 50% 69,348 52%
Privately Held 9,655 28% 32,758 24%
-------- -------- -------- --------
Total $ 33,694 100% $133,870 100%
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 $ 1,738 $ 7,788 $ 9,526 7%
2003 3,670 0 3,670 2%
2004 410 2,205 2,615 2%
2005 0 2,677 2,677 2%
2006 5,044 5,021 10,065 7%
Thereafter 101,321 11,174 112,495 80%
-------------- ---------------- ------------- ----------
Total $ 112,183 $ 28,865 $ 141,048 100%
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 150 9,841 $ 776,048 $ 78,859
Nursing Homes 57 7,933 369,254 46,547
Specialty Care
Facilities 7 1,305 88,312 67,672
------------ ------------ ----------- ------------
Total 214 19,079 $ 1,233,614 -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 $ 148,147 12%
Alterra Healthcare 44 105,072 9%
Home Quality Management 16 93,371 8%
Life Care Centers of
America, Inc. 13 84,406 7%
Atria Senior Quarters 9 78,529 6%
Remaining Operators 111 722,325 58%
------------- ------------- -------------
Total 214 $ 1,231,850 100%
Concentration by Revenue # Properties Revenue(1) % Revenue
------------- ------------- -------------
Merrill Gardens 21 $ 15,130 11%
Alterra Healthcare 44 11,973 9%
Life Care Centers of
America, Inc. 13 9,607 7%
Atria Senior Quarters 9 9,430 7%
Commonwealth Communities 6 8,043 6%
Remaining Operators 121 79,687 60%
------------- ------------- -------------
Total 214 $ 133,870 100%
Notes: (1) Year ended December 31, 2001
Selected Facility Data Exhibit 6
----------------------
Coverage Data
% Payor Mix -------------------------
------------------ Before After
Census Private Medicare Mgt. Fees Mgt. Fees
----------------------------------------------------
Assisted Living
Facilities 87% 100% 0% 1.30x 1.11x
Nursing Homes 83% 20% 12% 1.63x 1.25x
Specialty Care
Facilities 58% 16% 36% 2.12x 1.58x
-------------------------
Weighted Averages 1.49x 1.20x
Security Deposits & Other Credit Support ($000's) Exhibit 7
-------------------------------------------------
Balance % Investment
-------------------------------
Cross Defaulted $ 1,164,679 95% of gross real estate
investments
Cross Collateralized 201,679 85% 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 39%
Long-Term Debt
Obligations 491,216 39% Debt/Total Mkt. Cap 34%
Shareholders'
Equity 757,870 61% Interest Coverage 3.77x 4th Qtr.
---------- --------- 3.85x L12M
Total Book
Capitalization $1,249,086 100% FFO Payout Ratio 94% 4th Qtr.
93% L12M
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 42,570 42,570
------------------ ------------- --------------- ---------
Total $ 175,000 $ 412,250 $ 109,966 $ 697,216
Notes: (1) Lines of Credit reflect 100% capacity
Investment Activity ($000's) Exhibit 9
----------------------------
Three Months Ended Year Ended
December 31, 2001 December 31, 2001
------------------- -------------------
Funding by Investment Type
Real Property $ 111,815 95% $ 181,420 86%
Mortgage & Other Loans 3,586 3% 11,776 5%
Construction Advances 2,286 2% 16,883 8%
Subdebt Investments 321 0% 2,986 1%
------------------- -------------------
Total $ 118,008 100% $ 213,065 100%
Real Estate Investments
Assisted Living Facilities $ 16,593 14% $ 72,048 34%
Nursing Homes 101,094 86% 138,031 66%
Specialty Care Facilities 0 0% 0 0%
------------------- -------------------
Total $ 117,687 100% $ 210,079 100%
Geographic Concentration ($000's) Exhibit 10
---------------------------------
Concentration by Region # Properties Investment % Investment
----------------------------------------
South 121 $ 557,679 45%
Northeast 33 276,354 23%
West 29 201,914 16%
Midwest 31 195,903 16%
----------------------------------------
Total 214 $ 1,231,850 100%
Concentration by State # Properties Investment % Investment
----------------------------------------
Florida 29 $ 145,614 12%
Massachusetts 14 128,526 10%
Ohio 13 107,289 9%
Texas 29 101,242 8%
New York 7 62,889 5%
Remaining States 122 686,290 56%
----------------------------------------
Total 214 $ 1,231,850 100%
Revenue by State (1) # Properties Revenue(1) % Revenue
----------------------------------------
Florida 29 $ 14,867 11%
Texas 29 14,859 11%
Massachusetts 14 13,958 10%
California 8 8,975 7%
North Carolina 9 6,934 5%
Remaining States 125 74,277 56%
----------------------------------------
Total 214 $ 133,870 100%
Notes: (1) Year ended December 31, 2001
Funds From Operations Computation ($000's) Exhibit 11
------------------------------------------
Three Months Ended Year Ended
December 31, 2001 December 31, 2001
------------------- -----------------
Net Income Available to
Common Shareholders $ 9,881 $ 47,044
Add: Depreciation Expense 9,204 30,227
Loss on Extinguishment 0 213
Net Loss on Sale
of Properties 1,374 1,250
Deduct: Gain on Sale of Assets 0 0
Prepayment Fees 0 (990)
------------------- -----------------
Funds From Operations (FFO) $ 20,459 $ 77,744
Average Common
Shares Outstanding:
Basic 32,345 30,522
Diluted 33,072 31,027
FFO Per Common Share:
Basic $ 0.63 $ 2.55
Diluted $ 0.62 $ 2.51
Disposition Activity Exhibit 12
--------------------
Three Months Ended Year Ended
December 31, 2001 December 31, 2001
----------------- -----------------
Dispositions by Investment Type
Real Property $ 1,811 100% $23,829 27%
Mortgage & Other Loans 0 0% 65,040 73%
------- ------- ------- -------
Total $ 1,811 100% $88,869 100%
======= ======= ======= =======
Real Estate Investments
Assisted Living Facilities $ 1,811 100% $28,232 32%
Nursing Homes 0 0% 0 0%
Specialty Care Facilities 0 0% 60,637 68%
------- ------- ------- -------
Total $ 1,811 100% $88,869 100%
======= ======= ======= -------
Lease Up Statistics on Assisted Living Facilities Exhibit 13
-------------------------------------------------
Occupancy Facilities Months in Operation Revenue(1) % of Revenue
----------- ------------------- ---------- ------------
00% - 50% 4 7.1 $ 3,255 2%
50% - 70% 13 20.8 $ 12,011 9%
70% + 4 14.4 $ 4,439 3%
Notes: (1) Interest and rental income for year ended December 31,
2001.
--30--djl/clv*
| CONTACT: | Health Care REIT, Inc. |
|---|---|
| Ray Braun, 419/247-2800 | |
| Mike Crabtree, 419/247-2800 |