EX-99.1 2 Exhibit99-1.htm EX-99.1  

 

 

hcreit_logo_k_sm

 

FOR IMMEDIATE RELEASE EXHIBIT 99.1  

November 6, 2012

For more information contact:

Scott Estes (419) 247-2800

Jay Morgan (419) 247-2800

 

Health Care REIT, Inc.

Reports Third Quarter Results

 

Completed approximately $1.0 billion of 3Q12 investments

Announced Sunrise Senior Living acquisition

3Q12 same store cash NOI increased 3.6%

 

Toledo, Ohio, November 6, 2012…..Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s third quarter ended September 30, 2012.

 

“Our business model continued to hit on all cylinders during the third quarter,” commented George L. Chapman, Chairman and CEO of Health Care REIT, Inc.  “Our relationship program has produced $1.0 billion of investments in the quarter and $2.9 billion year-to-date.  Our high-quality, diverse portfolio generated another quarter of strong 3.6% same-store NOI growth.  We sit in an excellent liquidity position having successfully raised $2.4 billion of equity during the quarter and our operations team continues to effectively manage our growth.  The completion of the Sunrise Senior Living acquisition coupled with disposition of noncore properties will further strengthen and diversify the quality of our portfolio.  We believe the attributes of our business model position us to continue to deliver consistent and resilient cash flow growth, predictable deal flow, and attractive risk adjusted returns to our shareholders.”

 

Recent Highlights

·         Announced 125 property acquisition with Sunrise Senior Living

·         Completed approximately $1.0 billion of gross new investments in 3Q12, including $243.5 million with Sunrise

·         Increased 3Q12 same-store cash NOI by 3.6%, including 7.0% growth in our seniors housing operating portfolio

·         Reported 3Q12 normalized FFO of $0.91 per share and normalized FAD of $0.82 per share

·         Completed $133 million in dispositions, generating $13 million in gains for 3Q12 

·         Reduced debt to undepreciated book capitalization to 38% at end of 3Q12  from 45% at end of 2Q12

·         Funded $250 million Canadian denominated unsecured term loan (approximately $249 million USD) in July

·         Completed redemptions/conversions of $168 million 4.75% convertible senior unsecured notes due 2027 in August

·         Extinguished $77 million of 8% senior unsecured notes upon maturity in September

·         Issued 43.7 million shares of common stock during 3Q12, generating approximately $2.4 billion of proceeds

·         Increased quarterly cash dividend to $0.765 per share, or $3.06 annually beginning with the February 2013 dividend, up 3.4% versus $2.96 per share to be paid in 2012

 

Dividends for Third Quarter 2012  As previously announced, the Board of Directors declared a cash dividend for the quarter ended September 30, 2012 of $0.74 per share, as compared to $0.715 per share for the same period in 2011, representing a 3.5% increase.  The cash dividend will be paid on November 20, 2012 and will be the company’s 166th consecutive quarterly dividend payment.  The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors.

 

Dividends for 2013  The Board of Directors approved a quarterly cash dividend rate of $0.765 per share ($3.06 per share annually), which represents a 3.4% increase, commencing with the February 2013 dividend payment.  The company’s dividend policy was reviewed during the Board’s October meeting. The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors.

Page 1 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

Third Quarter Investment Highlights  As previously announced, during the quarter the company completed the acquisition of five Sunrise Senior Living properties located in the United Kingdom for $243.5 million at a blended NOI yield of 7.2%.  The five properties were purchased from a partnership between Sunrise and an institutional investor and are included in the previously announced 125 property Sunrise acquisition.  The communities are 100% private pay, include 437 units and are located in attractive metropolitan markets.  Consistent with our seniors housing operating portfolio, we expect annual NOI growth of approximately 4% to 5%.  Sunrise will continue to manage the communities under an incentive-based management contract.

 

During the quarter the company completed $611 million in seniors housing triple-net lease investments at a blended yield of 7.1%.  The investments include acquisitions totaling $586 million at a blended yield of 7.0%, consisting of 19 facilities operated by Senior Lifestyle for $459 million and five facilities with other operators for $127 million.  In addition, two development projects totaling $25 million at a blended yield of 8.5% were completed during the quarter.

 

During the quarter the company completed $56 million in medical office building investments at a blended yield of 7.1%.  The investments include the acquisition of three medical office buildings for $50 million and one development completion.  The three buildings acquired total 220,000 rentable square feet, with a yield of 7.0%.  Each building is affiliated with a health system and average occupancy is 98%.  The development completion represents a 13,400 rentable square foot building that is affiliated with a health system and 100% leased with a yield of 8.5%.

 

Sunrise Acquisition Update  The 125 property acquisition of Sunrise Senior Living, Inc. (NYSE:SRZ) remains on track to close in early 2013.  The company successfully reached agreement to sell the Sunrise management company as announced on September 14, 2012 and continues to work with Sunrise to accelerate the buyout of its partners in certain of the 105 joint venture properties.  The company acquired five of the 105 joint venture properties located in the United Kingdom in the third quarter for approximately $243.5 million.  During the fourth quarter 2012, the company funded its previously announced $467 million loan to Sunrise.  The final amount drawn was $462.5 million.  The proceeds of the loan were used by Sunrise to acquire its partners’ interests in 33 of the 105 joint venture properties.  As a result of the accelerated joint venture buyouts, the company expects the Sunrise acquisition to include 58 wholly owned properties and 67 joint venture properties at closing.  The accelerated joint venture partner buyouts increases the expected real estate value of the 125 properties from approximately $1.9 billion to approximately $3.2 billion.  Of the 67 joint venture properties, 50 properties remain subject to purchase options that the company may exercise to acquire the partners’ interests.

 

$925 Million Acquisition Pipeline Update  On August 6, 2012, Health Care REIT announced anticipated third quarter 2012 acquisitions of $925 million.  During the third quarter, $634 million of those acquisitions have closed and $291 million are now expected to close in the fourth quarter of 2012.  The aggregate acquisition amount includes approximately $134 million of debt that the company expects to assume at an average interest rate of 5.6%.  Approximately $27 million of the aggregate debt is associated with the third quarter acquisitions and $107 million is associated with the fourth quarter acquisitions.

Page 2 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Previously Announced Investments Reconciliation

 

 

 

 

 

 

 

 

($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3Q12A

 

4Q12E

 

1Q13E

 

Total Announced

 

Remaining as of 9/30/12

Sunrise Acquisition

$243.5

 

$462.5

 

$2,464.2

 

$3,170.2

 

$2,926.7

Debt Assumed

 

 

 

 

$1,556.1

 

$1,556.1

 

$1,556.1

Cash Required

 

 

$462.5

 

$908.1

 

 

 

$1,370.6

 

 

 

 

 

 

 

 

 

 

$925 Million Announced August 6, 2012

$634.2

 

$291.2

 

 

 

$925.4

 

$291.2

Debt Assumed

$26.7

 

$107.5

 

 

 

$134.2

 

$107.5

Cash Required

 

 

$183.7

 

 

 

 

 

$183.7

 

 

 

 

 

 

 

 

 

 

Total Acquisitions

$877.7

 

$753.7

 

$2,464.2

 

$4,095.6

 

$3,217.9

Debt Assumed

$26.7

 

$107.5

 

$1,556.1

 

$1,690.3

 

$1,663.6

Cash Required

 

 

$646.2

 

$908.1

 

 

 

$1,554.3

 

 

 

 

 

 

 

 

 

 

 

All amounts included in this announcement relating to acquisitions or investments that have not yet closed are preliminary estimates, are subject to downward or upward adjustment, and are subject to change. Furthermore, certain of the estimated investment amounts with respect to the incremental Sunrise investments, including the acquisition of five properties in the United Kingdom, are based on exchange rates in effect as of the time of the estimate. Our anticipated acquisitions and investments are in various stages of closing and some or all of the transactions may not be completed on currently anticipated terms, or within currently anticipated timeframes, or at all. The completion of the anticipated acquisitions and investments is subject to the satisfaction of various conditions.

 

Outlook for 2012  The company is updating its normalized 2012 FFO and FAD guidance to reflect recently announced investment and capital activity.  Relative to prior FFO and FAD guidance, the midpoint of our guidance ranges would be increasing by $0.04 per share but for the decision to pre-emptively raise capital to fund the Sunrise acquisition, which negatively impacts expectations by $0.11 per share.  As a result, normalized FFO has been updated to a range of $3.49 to $3.53 per diluted share from $3.53 to $3.63 per diluted share and normalized FAD has been updated to a range of $3.07 to $3.11 per diluted share from $3.11 to $3.21 per diluted share. Net income attributable to common stockholders has been revised to a range of $0.91 to $0.95 per diluted share from $1.07 to $1.17 per diluted share.  The company now expects up to $700 million of dispositions in 2012, up from the previous expectation of $300 million, which consist primarily of non-strategic skilled nursing facilities. 

 

The company’s guidance does not include any additional 2012 investments beyond what has been announced, nor any additional transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments other than normal monthly rental payments.  Please see the exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD.

 

Conference Call Information  The company has scheduled a conference call on Tuesday, November 6, 2012 at 10:00 a.m. Eastern Time to discuss its third quarter 2012 results, industry trends, portfolio performance and outlook for 2012. Telephone access will be available by dialing 888-346-2469 or 706-758-4923 (international).  For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 20, 2012. To access the rebroadcast, dial 855-859-2056 or 404-537-3406 (international).  The conference ID number is 40018571. To participate in the webcast, log on to www.hcreit.com  15 minutes before the call to download the necessary software.  Replays will be available for 90 days.

Page 3 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

Key Performance Indicators

 

 

 

 

 

3Q12

 

3Q11

Change

Net income (loss) attributable to common

 

 

 

 

 

 

 

 

stockholders (NICS) per diluted share

 

$

 0.16 

 

$

 0.21 

-24%

Normalized FFO per diluted share

 

$

 0.91 

 

$

 0.89 

2%

Normalized FAD per diluted share

 

$

 0.82 

 

$

 0.79 

4%

Dividends per common share

 

$

 0.74 

 

$

 0.715 

3%

Normalized FFO Payout Ratio

 

 

81%

 

 

80%

 

Normalized FAD Payout Ratio

 

 

90%

 

 

91%

 

 

Quarterly Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NICS

FFO

FAD

 

 

 

 

 

 

3Q12

 

3Q11

Change

 

3Q12

 

3Q11

Change

 

3Q12

 

3Q11

Change

 

Per diluted share

 

$

 0.16 

 

$

 0.21 

-24%

 

$

 0.75 

 

$

 0.85 

-12%

 

$

 0.67 

 

$

 0.75 

-11%

 

 

Includes impact of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains (losses/impairments)(1)

 

$

 0.03 

 

$

- 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other items, net(2)

 

$

 (0.16) 

 

$

 (0.04) 

 

 

$

 (0.16) 

 

$

 (0.04) 

 

 

$

 (0.16) 

 

$

 (0.04) 

 

 

 

 

Prepaid/straight-line rent receipts(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 0.01 

 

$

 0.01 

 

 

Per diluted share - normalized(a)

 

 

 

 

 

 

 

 

$

 0.91 

 

$

 0.89 

2%

 

$

 0.82 

 

$

 0.79 

4%

 

(a) Amounts may not sum due to rounding

 

 

(1) $5,875,000 and $185,000 of net gains in 3Q12 and 3Q11, respectively.

 

 

(2) See Exhibit 1.

 

 

(3) $1,956,000 and $1,599,000 of receipts in 3Q12 and 3Q11, respectively.

 

 

Supplemental Reporting Measures  The company believes that net income attributable to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its 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 and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities.   Normalized FFO represents FFO adjusted for certain items detailed in Exhibit 1.  FAD represents FFO excluding net straight-line rental adjustments, amortization related to above/below market leases and amortization of non-cash interest expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions at medical office buildings.  Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for certain items detailed in Exhibit 1.  The company believes that normalized FFO and normalized FAD are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.  The company’s supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in the valuation, comparison and investment recommendations of companies.  The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions.  Additionally, they are utilized by the Board of Directors to evaluate management.  The supplemental reporting measures 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, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.  Please see the exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended September 30, 2012, which is available on the company’s website (www.hcreit.com), for information and reconciliations of additional supplemental reporting measures.

Page 4 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

About Health Care REIT, Inc.  Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of seniors housing and health care real estate.  The company also provides an extensive array of property management and development services.  As of September 30, 2012, the company’s broadly diversified portfolio consisted of 1,030 properties in 46 states, the United Kingdom, and Canada.  More information is available on the company’s website at www.hcreit.com. 

 

Forward-Looking Statements and Risk Factors  This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of facilities; the performance of its operators/tenants and facilities; its ability to enter into agreements with viable new tenants for vacant space or for facilities that the company takes back from financially troubled tenants, if any; its occupancy rates; its ability to acquire, develop and/or manage facilities; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its ability to successfully manage the risks associated with international expansion and operations; its tax status as a real estate investment trust; its critical accounting policies; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from 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 availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care, seniors housing and life science industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the company’s facilities; the company’s ability to re-lease space at similar rates as vacancies occur; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; regulatory approval and market acceptance of the products and technologies of life science tenants; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s facilities; changes in rules or practices governing the company’s financial reporting; the movement of foreign currency exchange rates; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes 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.

Page 5 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

HEALTH CARE REIT, INC.

Financial Exhibits

Consolidated Balance Sheets (unaudited)

(in thousands)

 

 

 

 

 

September 30,

 

 

 

 

 

2012 

 

2011 

Assets

 

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

 

 

Land and land improvements

 

$

 1,268,757 

 

$

 1,039,079 

 

 

Buildings and improvements

 

 

 14,766,557 

 

 

 12,114,068 

 

 

Acquired lease intangibles

 

 

 572,765 

 

 

 361,832 

 

 

Real property held for sale, net of accumulated depreciation

 

 

 153,458 

 

 

 5,550 

 

 

Construction in progress

 

 

 219,705 

 

 

 208,257 

 

 

 

 

 

 16,981,242 

 

 

 13,728,786 

 

 

Less accumulated depreciation and intangible amortization

 

 

 (1,480,293) 

 

 

 (1,084,746) 

 

 

 

Net real property owned

 

 

 15,500,949 

 

 

 12,644,040 

 

 

Real estate loans receivable(1)

 

 

 284,908 

 

 

 320,611 

 

 

Less allowance for losses on loans receivable

 

 

- 

 

 

 (1,823) 

 

 

 

Net real estate loans receivable

 

 

 284,908 

 

 

 318,788 

 

 

Net real estate investments

 

 

 15,785,857 

 

 

 12,962,828 

Other assets:

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

 

 456,552 

 

 

 239,984 

 

 

Goodwill

 

 

 68,321 

 

 

 68,321 

 

 

Deferred loan expenses

 

 

 57,539 

 

 

 59,446 

 

 

Cash and cash equivalents

 

 

 1,382,252 

 

 

 136,676 

 

 

Restricted cash

 

 

 140,404 

 

 

 56,675 

 

 

Receivables and other assets(2)

 

 

 391,350 

 

 

 337,159 

 

 

 

 

 

 2,496,418 

 

 

 898,261 

Total assets

 

$

 18,282,275 

 

$

 13,861,089 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Borrowings under unsecured lines of credit arrangements

 

$

- 

 

$

 390,000 

 

 

Senior unsecured notes

 

 

 4,921,712 

 

 

 4,432,092 

 

 

Secured debt

 

 

 2,314,717 

 

 

 1,888,083 

 

 

Capital lease obligations

 

 

 82,596 

 

 

 82,872 

 

 

Accrued expenses and other liabilities

 

 

 405,798 

 

 

 342,013 

Total liabilities

 

 

 7,724,823 

 

 

 7,135,060 

Redeemable noncontrolling interests

 

 

 35,047 

 

 

 32,863 

Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 1,022,917 

 

 

 1,010,417 

 

 

Common stock

 

 

 259,522 

 

 

 178,772 

 

 

Capital in excess of par value

 

 

 10,502,057 

 

 

 6,384,711 

 

 

Treasury stock

 

 

 (17,531) 

 

 

 (13,535) 

 

 

Cumulative net income

 

 

 2,077,641 

 

 

 1,849,290 

 

 

Cumulative dividends

 

 

 (3,485,592) 

 

 

 (2,826,800) 

 

 

Accumulated other comprehensive income

 

 

 (10,432) 

 

 

 (10,354) 

 

 

Other equity

 

 

 7,445 

 

 

 6,292 

 

 

 

Total Health Care REIT, Inc. stockholders’ equity

 

 

 10,356,027 

 

 

 6,578,793 

 

 

Noncontrolling interests

 

 

 166,378 

 

 

 114,373 

Total equity

 

 

 10,522,405 

 

 

 6,693,166 

Total liabilities and equity

 

$

 18,282,275 

 

$

 13,861,089 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes non-accrual loan balances of $13,035,000 and $9,287,000 at September 30, 2012 and 2011, respectively.

(2) Includes net straight-line receivable balances of $155,495,000 and $107,871,000 at September 30, 2012 and 2011, respectively.
                                       

Page 6 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

Consolidated Statements of Income (unaudited)

(in thousands, except per share data)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

2012 

 

2011 

 

2012 

 

2011 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 290,225 

 

$

 235,938 

 

$

 826,627 

 

$

 615,219 

 

 

Resident fees and service

 

 

 174,464 

 

 

 125,125 

 

 

 498,295 

 

 

 319,559 

 

 

Interest income

 

 

 8,111 

 

 

 7,858 

 

 

 24,131 

 

 

 32,433 

 

 

Other income

 

 

 1,339 

 

 

 1,809 

 

 

 4,505 

 

 

 9,974 

Gross revenues

 

 

 474,139 

 

 

 370,730 

 

 

 1,353,558 

 

 

 977,185 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 94,580 

 

 

 84,429 

 

 

 280,058 

 

 

 220,527 

 

 

Property operating expenses

 

 

 144,479 

 

 

 103,127 

 

 

 409,606 

 

 

 266,081 

 

 

Depreciation and amortization

 

 

 132,150 

 

 

 111,582 

 

 

 387,053 

 

 

 286,623 

 

 

General and administrative expenses

 

 

 23,679 

 

 

 19,735 

 

 

 77,302 

 

 

 57,009 

 

 

Transaction costs

 

 

 8,264 

 

 

 6,739 

 

 

 42,535 

 

 

 56,542 

 

 

Loss (gain) on derivatives, net

 

 

 409 

 

 

- 

 

 

 (1,712) 

 

 

- 

 

 

Loss (gain) on extinguishment of debt, net

 

 

 215 

 

 

- 

 

 

 791 

 

 

- 

 

 

Provision for loan losses

 

 

 27,008 

 

 

 132 

 

 

 27,008 

 

 

 547 

Total expenses

 

 

 430,784 

 

 

 325,744 

 

 

 1,222,641 

 

 

 887,329 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

and income from unconsolidated entities

 

 

 43,355 

 

 

 44,986 

 

 

 130,917 

 

 

 89,856 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

 

 (836) 

 

 

 (223) 

 

 

 (3,754) 

 

 

 (563) 

Income (loss) from unconsolidated entities

 

 

 (739) 

 

 

 1,642 

 

 

 2,250 

 

 

 4,156 

Income (loss) from continuing operations

 

 

 41,780 

 

 

 46,405 

 

 

 129,413 

 

 

 93,449 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

 12,827 

 

 

 185 

 

 

 46,046 

 

 

 56,565 

 

 

Impairment of assets

 

 

 (6,952) 

 

 

- 

 

 

 (6,952) 

 

 

 (202) 

 

 

Income (loss) from discontinued operations, net

 

 

 5,851 

 

 

 5,763 

 

 

 19,329 

 

 

 20,561 

 

 

 

 

 

 

 11,726 

 

 

 5,948 

 

 

 58,423 

 

 

 76,924 

Net income (loss)

 

 

 53,506 

 

 

 52,353 

 

 

 187,836 

 

 

 170,373 

Less:

Preferred dividends

 

 

 16,602 

 

 

 17,234 

 

 

 52,527 

 

 

 43,268 

 

 

 

Preferred stock redemption charge

 

 

- 

 

 

- 

 

 

 6,242 

 

 

- 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

 

 (365) 

 

 

 (1,488) 

 

 

 (2,241) 

 

 

 (2,721) 

Net income (loss) attributable to common stockholders

 

$

 37,269 

 

$

 36,607 

 

$

 131,308 

 

$

 129,826 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 224,391 

 

 

 177,272 

 

 

 212,592 

 

 

 169,636 

 

 

Diluted

 

 

 226,258 

 

 

 177,849 

 

 

 214,075 

 

 

 170,301 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.17 

 

$

 0.21 

 

$

 0.62 

 

$

 0.77 

 

 

Diluted

 

$

 0.16 

 

$

 0.21 

 

$

 0.61 

 

$

 0.76 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common dividends per share

 

$

 0.74 

 

$

 0.715 

 

$

 2.22 

 

$

 2.12 
                                                                                       

Page 7 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

 

Normalizing Items

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 1

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

  

September 30,

 

 

 

 

 

 

2012 

 

2011 

 

  

2012 

 

2011 

 

Transaction costs

 

$

 8,264 (1)

 

$

 6,739 

 

 

$

 42,535 

 

$

 56,542 

 

Special stock compensation grants

 

 

- 

 

 

- 

 

 

 

 4,316 

 

 

- 

 

Loss (gain) on derivatives, net

 

 

 409 (2)

 

 

- 

 

 

 

 (1,712) 

 

 

- 

 

Loss (gain) on extinguishment of debt, net

 

 

 215 (3)

 

 

- 

 

  

 

 791 

 

 

- 

 

Provision for loan losses

 

 

 27,008 (4)

 

 

 132 

 

 

 

 27,008 

 

 

 547 

 

Held for sale hospital operating expenses

 

 

- 

 

 

 212 

 

  

 

 215 

 

 

 1,306 

 

Non-recurring other income

 

 

- 

 

 

- 

 

 

 

- 

 

 

 (3,774) 

 

Preferred stock redemption charge

 

 

- 

 

 

- 

 

 

 

 6,242 

 

 

- 

 

Total

 

$

 35,896 

 

$

 7,083 

 

 

$

 79,395 

 

$

 54,621 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 

 226,258 

 

 

 177,849 

 

 

 

 214,075 

 

 

 170,301 

 

Net amount per diluted share

 

$

 0.16 

 

$

 0.04 

 

 

$

 0.37 

 

$

 0.32 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Primarily costs incurred with seniors housing acquisitions.

 

 

 

 

 

 

 

 

 

 

 

(2) Related to currency hedges executed to lock the exchange rates on international transactions.

 

 

 

 

(3) Related to secured debt extinguishments during the quarter.

 

 

 

 

(4) Primarily related to one seniors housing loan.

 

 

 

 

 

 

 

 

 

 

 

 
                                                                                       

 

 

Funds Available for Distribution Reconciliation

 

 

 

 

 

 

 

 

 

 

 

Exhibit 2

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

2012 

 

2011 

 

 

2012 

 

2011 

 

 

Net income (loss) attributable to common stockholders

$

 37,269 

 

$

 36,607 

 

 

$

 131,308 

 

$

 129,826 

 

 

Depreciation and amortization(1)

 

 132,858 

 

 

 115,640 

 

 

 

 393,243 

 

 

 301,461 

 

 

Losses/impairments (gains) on properties, net

 

 (5,875) 

 

 

 (185) 

 

 

 

 (39,094) 

 

 

 (56,363) 

 

 

Noncontrolling interests(2)

 

 (4,631) 

 

 

 (2,330) 

 

 

 

 (13,689) 

 

 

 (11,802) 

 

 

Unconsolidated entities(3)

 

 8,518 

 

 

 1,631 

 

 

 

 15,996 

 

 

 4,476 

 

 

Gross straight-line rental income

 

 (13,231) 

 

 

 (11,891) 

 

 

 

 (37,162) 

 

 

 (27,909) 

 

 

Prepaid/straight-line rent receipts

 

 1,956 

 

 

 1,599 

 

 

 

 5,093 

 

 

 8,312 

 

 

Amortization related to above (below) market leases, net

 

 972 

 

 

 (532) 

 

 

 

 767 

 

 

 (1,588) 

 

 

Non-cash interest expense

 

 2,241 

 

 

 3,714 

 

 

 

 8,782 

 

 

 10,129 

 

 

Cap-ex, tenant improvements, lease commissions

 

 (9,345) 

 

 

 (9,992) 

 

 

 

 (28,578) 

 

 

 (26,873) 

 

 

Funds available for distribution

 

 150,732 

 

 

 134,261 

 

 

 

 436,666 

 

 

 329,669 

 

 

Normalizing items, net(4)

 

 35,896 

 

 

 7,083 

 

 

 

 79,395 

 

 

 54,621 

 

 

Prepaid/straight-line rent receipts

 

 (1,956) 

 

 

 (1,599) 

 

 

 

 (5,093) 

 

 

 (8,312) 

 

 

Funds available for distribution - normalized

$

 184,672 

 

$

 139,745 

 

 

$

 510,968 

 

$

 375,978 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 226,258 

 

 

 177,849 

 

 

 

 214,075 

 

 

 170,301 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per diluted share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

 0.16 

 

$

 0.21 

 

 

$

 0.61 

 

$

 0.76 

 

 

 

Funds available for distribution

$

 0.67 

 

$

 0.75 

 

 

$

 2.04 

 

$

 1.94 

 

 

 

Funds available for distribution - normalized

$

 0.82 

 

$

 0.79 

 

 

$

 2.39 

 

$

 2.21 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FAD Payout Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

 0.74 

 

$

 0.715 

 

 

$

 2.22 

 

$

 2.12 

 

 

 

FAD per diluted share - normalized

$

 0.82 

 

$

 0.79 

 

 

$

 2.39 

 

$

 2.21 

 

 

 

 

Normalized FAD payout ratio

 

90%

 

 

91%

 

 

 

93%

 

 

96%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations.

 

 

 

 

 

 

 

 

 

 

 

 

(2) Represents noncontrolling interests' share of net FAD adjustments.

 

 

 

 

 

 

 

 

 

 

 

 

(3) Represents HCN's share of net FAD adjustments from unconsolidated entities.

 

 

 

 

 

 

 

 

 

 

 

 

(4) See Exhibit 1.

 

 

 

 

 

 

 

 
                                                                             

Page 8 of 9 

 

 

3Q12 Earnings Release                                                                                                                                                                November 6, 2012

 

 

 

 

Funds From Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

Exhibit 3

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

2012 

 

2011 

 

2012 

 

2011 

 

 

Net income (loss) attributable to common stockholders

$

 37,269 

 

$

 36,607 

 

$

 131,308 

 

$

 129,826 

 

 

Depreciation and amortization(1)

 

 132,858 

 

 

 115,640 

 

 

 393,243 

 

 

 301,461 

 

 

Losses/impairments (gains) on properties, net

 

 (5,875) 

 

 

 (185) 

 

 

 (39,094) 

 

 

 (56,363) 

 

 

Noncontrolling interests(2)

 

 (5,440) 

 

 

 (4,706) 

 

 

 (15,619) 

 

 

 (13,353) 

 

 

Unconsolidated entities(3)

 

 11,913 

 

 

 3,020 

 

 

 22,673 

 

 

 9,411 

 

 

Funds from operations

 

 170,725 

 

 

 150,376 

 

 

 492,511 

 

 

 370,982 

 

 

Normalizing items, net(4)

 

 35,896 

 

 

 7,083 

 

 

 79,395 

 

 

 54,621 

 

 

Funds from operations - normalized

$

 206,621 

 

$

 157,459 

 

$

 571,906 

 

$

 425,603 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 226,258 

 

 

 177,849 

 

 

 214,075 

 

 

 170,301 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per diluted share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

 0.16 

 

$

 0.21 

 

$

 0.61 

 

$

 0.76 

 

 

 

Funds from operations

$

 0.75 

 

$

 0.85 

 

$

 2.30 

 

$

 2.18 

 

 

 

Funds from operations - normalized

$

 0.91 

 

$

 0.89 

 

$

 2.67 

 

$

 2.50 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO Payout Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

 0.74 

 

$

 0.715 

 

$

 2.22 

 

$

 2.12 

 

 

 

FFO per diluted share - normalized

$

 0.91 

 

$

 0.89 

 

$

 2.67 

 

$

 2.50 

 

 

 

 

Normalized FFO payout ratio

 

81%

 

 

80%

 

 

83%

 

 

85%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations.

 

 

 

 

 

(2) Represents noncontrolling interests' share of net FFO adjustments.

 

 

 

 

 

(3) Represents HCN's share of net FFO adjustments from unconsolidated entities.

 

 

 

 

 

(4) See Exhibit 1.

 
                                                                                       

 

 

Outlook Reconciliations: Year Ended December 31, 2012

 

 

 

 

 

 

 

 

 

 

Exhibit 4

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Outlook

 

Current Outlook

 

 

 

 

 

 

Low

 

High

 

Low

 

High

 

 

FFO Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

 1.07 

 

$

 1.17 

 

$

 0.91 

 

$

 0.95 

 

 

Losses/impairments (gains) on properties, net

 

 (0.16) 

 

 

 (0.16) 

 

 

 (0.17) 

 

 

 (0.17) 

 

 

Depreciation and amortization(1)

 

 2.42 

 

 

 2.42 

 

 

 2.40 

 

 

 2.40 

 

 

Funds from operations

 

 3.33 

 

 

 3.43 

 

 

 3.14 

 

 

 3.18 

 

 

Normalizing items, net(2)

 

 0.20 

 

 

 0.20 

 

 

 0.35 

 

 

 0.35 

 

 

Funds from operations - normalized

$

 3.53 

 

$

 3.63 

 

$

 3.49 

 

$

 3.53 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FAD Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

 1.07 

 

$

 1.17 

 

$

 0.91 

 

$

 0.95 

 

 

Losses/impairments (gains) on properties, net

 

 (0.16) 

 

 

 (0.16) 

 

 

 (0.17) 

 

 

 (0.17) 

 

 

Depreciation and amortization(1)

 

 2.42 

 

 

 2.42 

 

 

 2.40 

 

 

 2.40 

 

 

Net straight-line rent and above/below amortization(1)

 

 (0.22) 

 

 

 (0.22) 

 

 

 (0.22) 

 

 

 (0.22) 

 

 

Non-cash interest expense(1)

 

 0.06 

 

 

 0.06 

 

 

 0.06 

 

 

 0.06 

 

 

Cap-ex, tenant improvements, lease commissions(1)

 

 (0.25) 

 

 

 (0.25) 

 

 

 (0.24) 

 

 

 (0.24) 

 

 

Funds available for distribution

 

 2.92 

 

 

 3.02 

 

 

 2.74 

 

 

 2.78 

 

 

Normalizing items, net(2)

 

 0.20 

 

 

 0.20 

 

 

 0.35 

 

 

 0.35 

 

 

Prepaid/straight-line rent receipts

 

 (0.01) 

 

 

 (0.01) 

 

 

 (0.02) 

 

 

 (0.02) 

 

 

Funds available for distribution - normalized

$

 3.11 

 

$

 3.21 

 

$

 3.07 

 

$

 3.11 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated entities.

 

 

  

(2) See Exhibit 1.

 
                                                                                 

 

Page 9 of 9