TOLEDO, Ohio--(BUSINESS WIRE)--May 3, 2001--Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its first quarter of 2001. The company continues to meet financial and operational expectations.
"Our operating results for the quarter are on target with the guidance of $0.64 to $0.65 per share we provided earlier this year," commented George L. Chapman, chairman and chief executive officer. "We completed our $200 million asset disposition program this quarter with dispositions of $22 million for a total of $195 million. This strategy effectively preserved the company's fundamental credit qualities with low leverage of 38 percent debt to total capitalization and EBITDA coverage at 3.68 times. We will redeploy any future proceeds from sales or payoffs to acquire stabilized properties. We are seeing excellent investment opportunities that will enhance the portfolio. We intend to maintain the dividend at its current level, with increases to resume once capital becomes available at costs that permit accretive investment activity."
Summary of First Quarter Results
--------------------------------
(In thousands, except per share numbers)
----------------------------------------------------------------------
Three Months Three Months
Ended Ended
March 31, 2001 March 31, 2000
----------------------------------------------------------------------
Revenues $32,577 $34,950
----------------------------------------------------------------------
Net Income Available to Common
Shareholders $11,827 $14,757
----------------------------------------------------------------------
Funds From Operations (FFO) $18,479 $19,897
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Net Income Per Diluted Share $0.41 $0.52
----------------------------------------------------------------------
FFO Per Diluted Share $0.64 $0.70
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Dividend Per Share $0.585 $0.580
----------------------------------------------------------------------
FFO Payout Ratio 91% 83%
----------------------------------------------------------------------
Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $18.5 million, or $0.64 per diluted share, for the first three months of 2001, compared with $19.9 million, or $0.70 per diluted share, for the same period in 2000. The decrease was attributable to the decline in revenues generated by the smaller asset base, which resulted from the planned asset disposition program.
Asset Dispositions Effective in Reducing Debt.
---------------------------------------------
In 2000, the company completed asset dispositions totaling $173 million to preserve its low leverage and liquidity in a tight capital market. The company completed its asset disposition program in the first quarter of 2001 with dispositions totaling $22 million reducing total assets to $1.1 billion. The proceeds derived from the sales and mortgage payoffs were used to meet debt maturities, satisfy unfunded commitment obligations, and pay down the company's line of credit arrangements.
The company had a total outstanding debt balance of $430 million at March 31, 2001, down from $534 million in first quarter 2000, and shareholders' equity of $695 million, which represents a debt to total capitalization ratio of 38 percent. For the first three months of 2001, the company's coverage ratio of EBITDA to interest was 3.68 to
-
1.0.
Lease Up Statistics for Assisted Living Facilities.
--------------------------------------------------
The company is on track to stabilize another $100-$125 million of investments in its assisted living portfolio by June 30, 2001. As of December 31, 2000, 41 assisted living facilities remained in fill-up. During the first quarter 2001, 11 assisted living facilities were stabilized and two completed construction. The company ended the quarter with 111 stabilized assisted living facilities and 32 assisted living facilities in fill-up.
"We are pleased with the progress in stabilizing the assisted living portfolio," remarked Mr. Chapman. "Approximately 75 percent of our portfolio is currently stabilized and will approach 80 percent by midyear. Our same store payment coverage after management fees for 2000 was 1.41 times compared with 1.08 times in 1999. Stabilized facility cash flows are increasingly reflecting the dramatic decrease in new construction, the burn-off of rent concessions, and the pricing power of quality operators in this asset class. Many of our operators are implementing price increases of 5-10 percent this year in stabilized facilities. We are looking forward to completing the stabilization process."
Outlook for 2001.
----------------
The company previously announced its guidance of FFO of $0.64 to $0.65 per diluted share per quarter. The company believes these estimates remain appropriate.
Conference Call Information.
---------------------------
Health Care REIT has scheduled a conference call on May 4, 2001, at 11:00 A.M. EST to discuss its first quarter 2001 performance, industry trends, portfolio performance, and its outlook for 2001. 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 March 31, 2001, the company had investments in 201 health care facilities in 34 states and had total assets of approximately $1.1 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)
March 31
-------------------------
2001 2000
----------- -----------
Assets
Real estate investments:
Real property owned
Land $ 77,109 $ 72,373
Buildings & improvements 792,745 720,601
Construction in progress 7,641 52,975
----------- -----------
877,495 845,949
Less accumulated depreciation (59,754) (40,494)
----------- -----------
Total real property owned 817,741 805,455
Loans receivable
Real property loans 268,377 404,189
Subdebt investments 22,225 25,350
----------- -----------
290,602 429,539
Less allowance for losses on
loans receivable (6,111) (5,837)
----------- -----------
284,491 423,702
----------- -----------
Net real estate investments 1,102,232 1,229,157
Other assets:
Equity investments 5,501 6,359
Deferred loan expenses 3,915 3,461
Cash and cash equivalents 2,537 1,380
Receivables and other assets 27,096 21,509
----------- -----------
39,049 32,709
----------- -----------
Total assets $1,141,281 $1,261,866
=========== ===========
Liabilities and shareholders' equity
Liabilities:
Borrowings under line of
credit obligations $ 110,300 $ 172,900
Senior unsecured notes 255,000 290,000
Secured debt 64,835 71,318
Accrued expenses and other liabilities 16,311 21,739
----------- -----------
Total liabilities $ 446,446 $ 555,957
Shareholders' equity:
Preferred Stock 150,000 150,000
Common Stock 28,881 28,577
Capital in excess of par value 529,417 524,778
Undistributed (overdistributed)
net income (8,416) 7,087
Accumulated other
Comprehensive income (994) 248
Unamortized restricted stock (4,053) (4,781)
----------- -----------
Total shareholders' equity $ 694,835 $ 705,909
----------- -----------
Total liabilities and
shareholders' equity $1,141,281 $1,261,866
=========== ===========
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Amounts in thousands except per share data)
Three months ended
March 31
--------------------------
2001 2000
--------------------------
Revenues:
Operating lease rents $22,608 $21,630
Interest income 8,945 11,521
Commitment fees and other income 890 1,676
Prepayment fees 134 0
Gain on sale of properties 0 123
------- -------
Gross Revenues 32,577 34,950
Expenses:
Interest expense $ 8,112 $ 9,101
Provision for depreciation 6,786 5,263
General and administrative 1,851 1,900
Loan expense 375 317
Provision for losses 250 250
------- -------
Total Expenses 17,374 16,831
------- -------
Net Income 15,203 18,119
Preferred stock dividends 3,376 3,362
------- -------
Net Income Available to
Common Shareholders $11,827 $14,757
======= =======
Average number of common
shares outstanding:
Basic 28,617 28,216
Diluted 28,871 28,457
Net income per share:
Basic $ 0.41 $ 0.52
Diluted 0.41 0.52
Funds from operations: $18,479 $19,897
Funds from operations per share:
Basic $ 0.65 $ 0.71
Diluted 0.64 0.70
Dividends per share $ 0.585 $ 0.580
HEALTH CARE REIT, INC.
Financial Supplement - March 31, 2001
Portfolio Composition ($000's) Exhibit 1
------------------------------
No. No.
Balance Sheet Data Properties Beds/Units Balance % Balance
-----------------------------------------------
Real Property 157 12,444 $ 817,741 74%
Loans Receivable 44 5,065 268,377 24%
Subdebt Investments -na- -na- 22,225 2%
-----------------------------------------------
Total Investments 201 17,509 $1,108,343 100%
No. No. Investment %
Investment Data Properties Beds/Units (1) Investment
-----------------------------------------------
Assisted Living
Facilities 148 10,090 $ 749,763 67%
Nursing Homes 43 5,868 248,004 22%
Specialty Care
Facilities 10 1,551 122,001 11%
-----------------------------------------------
Real Estate Investments 201 17,509 $1,119,768 100%
Investment by Owner No. No. Investment %
Type Properties Beds/Units (1) Investment
-----------------------------------------------
Publicly Traded 71 4,235 $ 267,115 24%
Key Private 86 8,581 633,545 57%
Privately Held 44 4,693 219,108 19%
-----------------------------------------------
Real Estate Investments 201 17,509 $1,119,768 100%
Notes: (1) Real Estate Investments include gross real estate
investments and credit enhancements which amounted to
$1,108,343,000 and $11,425,000, respectively.
Revenue Composition ($000's) Exhibit 2
----------------------------
Three Months Ended
March 31, 2001 Year-to-Date
-------------------- -------------------
Revenue by Investment Type
Real Property $23,063 71%
Loans Receivable & Other 8,822 27% (Not Applicable)
Subdebt Investments 692 2%
-------------------- -------------------
Total $32,577 100%
Revenue by Facility Type
Assisted Living Facilities $21,292 65%
Nursing Homes 7,071 22%
Specialty Care Facilities 4,214 13%
-------------------- -------------------
Total $32,577 100%
Revenue by Owner Type
Publicly Traded $ 8,208 25%
Key Private 18,956 58%
Privately Held 5,413 17%
-------------------- -------------------
Total $32,577 100%
Revenue Composition (Continued) ($000's) Exhibit 3
----------------------------------------
Operating Lease Expirations & Loan Maturities
Current
Current Lease Interest Interest and
Year Revenue (1) Revenue (1) Lease Revenue % of Total
-------------------------------------------------------------------
2001 $ 1,993 $ 1,801 $ 3,794 3%
2002 1,738 6,576 8,314 7%
2003 2,770 0 2,770 2%
2004 410 5,832 6,242 5%
Thereafter 88,183 18,163 106,346 83%
-------------------------------------------------------
Total $95,094 $32,372 $127,466 100%
Notes: (1) Revenue impact by year, annualized
Committed Investment Balances Exhibit 4
-----------------------------
($000's except Investment per Bed/Unit)
Investment
No. No. Committed per
Properties Beds/Units Balance (1) Bed/Unit
-----------------------------------------------
Assisted Living
Facilities 148 10,090 $ 759,147 $75,238
Nursing Homes 43 5,868 248,592 42,364
Specialty Care
Facilities 10 1,551 122,001 78,659
-----------------------------------------------
Total 201 17,509 $1,129,740 -na-
Notes: (1) Committed Balance includes real estate investments, credit
enhancements and unfunded commitments for which initial
funding had commenced.
Operator Concentration ($000's) Exhibit 5
-------------------------------
Concentration by Investment No. Properties Investment % Investment
------------------------------------------
Merrill Gardens 19 $ 126,722 11%
Life Care Centers of
America, Inc. 13 86,093 8%
Alterra Healthcare 38 85,353 8%
Atria Senior Quarters 9 79,571 7%
Balanced Care 9 54,991 5%
Remaining Operators 113 687,038 61%
------------------------------------------
Total 201 $1,119,768 100%
Concentration by Revenue No. Properties Revenue (1) % Revenue
------------------------------------------
Merrill Gardens 19 $ 3,446 11%
Alterra Healthcare 38 2,655 8%
Atria Senior Quarters 9 2,400 7%
Life Care Centers of
America, Inc. 13 2,039 6%
Tandem 8 1,572 5%
Remaining Operators 114 20,465 63%
------------------------------------------
Total 201 $ 32,577 100%
Notes: (1) Three months ended March 31, 2001
Selected Facility Data Exhibit 6
----------------------
Coverage Data
% Payor Mix --------------------
-------------------- Before After
Census Private Medicare Mgt. Fees Mgt. Fees
----------------------------------------------------
Nursing Homes 83% 26% 11% 1.61x 1.20x
Assisted Living
Facilities 90% 100% 0% 1.30x 1.12x
Specialty Care
Facilities 57% 13% 36% 1.93x 1.52x
---------------------
Weighted Averages 1.48x 1.20x
Notes: Data as of December 31, 2000
Security Deposits & Other Credit Support ($000's) Exhibit 7
-------------------------------------------------
Balance % Investment
--------------------
Cross Defaulted $1,028,874 92% of gross real estate investments
Cross Collateralized 224,980 84% of mortgage loans
Bank Letters of
Credit & Cash 24,277 2% of investment balance
Current Capitalization Leverage & Performance
($000's) Balance % Balance Ratios
---------------------- ------------------ ------------------------
Borrowings Under Debt/Total Book Cap 38%
Bank Lines $ 110,300 10% Debt/Equity 62%
Long-Term Debt Interest
Obligations 319,835 28% Coverage 3.68x 1st Qtr.
Shareholders' Equity 694,835 62% 3.61x L12M
-------------------- FFO Payout
Total Book Ratio 91% 1st Qtr.
Capitalization $1,124,970 100% 88% L12M
Debt Maturities and Principal Payments ($000's) Exhibit 8
-----------------------------------------------
Lines of
Year Credit (1) Senior Notes Secured Debt Total
-------------------------------------------------------------------
2001 $ 0 $ 10,000 $ 51 $ 10,051
2002 25,000 20,000 75 45,075
2003 150,000 35,000 84 185,084
2004 0 40,000 64,132 104,132
2005 0 0 493 493
2006 0 0 0 0
2007 0 0 0 0
Thereafter 0 150,000 0 150,000
-------------------------------------------------------
Total $175,000 $255,000 $ 64,835 $494,835
Notes: (1) Lines of Credit reflect 100% capacity
Investment Activity ($000's) Exhibit 9
----------------------------
Three Months Ended
March 31, 2001 Year-to-Date
-------------------- ------------------
Funding by Investment Type
Real Property $2,164 15%
Mortgage & Other Loans 0 0% (Not Applicable)
Construction Advances 6,777 82%
Subdebt Investments 273 3%
-------------------- ------------------
Total $9,214 100%
Real Estate Investments
Assisted Living Facilities $5,661 67%
Nursing Homes 3,553 33%
Behavioral Care 0 0%
Specialty Care Facilities 0 0%
-------------------- ------------------
Total $9,214 100%
Geographic Concentration ($000's) Exhibit 10
---------------------------------
Concentration by Region No. Properties Investment % Investment
------------------------------------------
South 112 $518,980 46%
Northeast 31 260,372 23%
West 32 208,992 19%
Midwest 26 131,424 12%
------------------------------------------
Total 201 $1,119,768 100%
Concentration by State No. Properties Investment % Investment
------------------------------------------
Florida 26 $138,105 12%
Texas 33 124,361 11%
Massachusetts 14 121,702 11%
California 10 69,837 6%
New York 6 58,974 5%
Remaining States 112 606,789 55%
------------------------------------------
Total 201 $1,119,768 100%
Revenue by State No. Properties Revenue (1) % Revenue
------------------------------------------
Texas 33 $ 4,246 13%
Florida 26 3,537 11%
Massachusetts 14 3,053 9%
California 10 2,268 7%
New York 6 1,778 5%
Remaining States 112 17,695 55%
------------------------------------------
Total 201 $32,577 100%
Notes: (1) Three months ended March 31, 2001
Funds From Operations Computation ($000's) Exhibit 11
------------------------------------------
Three Months Ended
March 31, 2001 Year-to-Date
------------------ -----------------
Net Income Available to Common
Shareholders $11,827
Add: Depreciation Expense 6,786
Asset Impairment Charges 0 (Not Applicable)
Deduct: Gain on Sale of Assets 0
Prepayment Fees (134)
------------------ -----------------
Funds From Operations (FFO) $18,479
Average Common Shares Outstanding:
Basic 28,617
Diluted 28,871
FFO Per Common Share:
Basic $ 0.65
Diluted $ 0.64
Disposition Activity Exhibit 12
--------------------
Three Months Ended
March 31, 2001 (Year-to-Date)
-------------------- --------------------
Dispositions by
Investment Type
Real Property $ 0 0%
Mortgage & Other Loans 21,655 100% (Not Applicable)
------- ----
Total $21,655 100%
======= ====
Real Estate Investments
Assisted Living
Facilities $ 0 0%
Nursing Homes 0 0%
Specialty Care
Facilities 21,655 100%
------- ----
Total $21,655 100%
======= ====
Lease Up Statistics on Assisted Living Facilities Exhibit 13
-------------------------------------------------
Months in Revenue % of
Occupancy Facilities Operation (1) Revenue
-----------------------------------------------
00% - 50% 11 14.6 $3,013 9%
50% - 70% 15 18.6 $2,840 8%
70% + 6 20.9 $1,656 5%
Notes: (1) Interest and rental income for three months ended
March 31, 2001.
--30--jam/clv djl/clv
| CONTACT: | Health Care REIT, Inc. |
|---|---|
| Ray Braun, 419/247-2800 | |
| Mike Crabtree, 419/247-2800 | |