8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 6, 2013

Health Care REIT, Inc.
(Exact name of registrant as specified in its charter)
Delaware	1-8923		34-1096634
(State or other jurisdiction	(Commission		(IRS Employer
of incorporation)	File Number)		Identification No.)
4500 Dorr Street, Toledo, Ohio		43615
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code (419) 247-2800
_____________________________________________________________________________________________
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition.

On August 6, 2013, Health Care REIT, Inc. (the “Company”) issued a press release that announced operating results for its second quarter ended June 30, 2013.  The press release refers to a supplemental information package that is available on the Company's website (www.hcreit.com), free of charge.  Copies of the press release and supplemental information package have been furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report, and are incorporated herein by reference.

The information included in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing. 

Item 9.01  Financial Statements and Exhibits.

(d)  Exhibits.

99.1Press release of Health Care REIT, Inc. dated August 6, 2013.

99.2Health Care REIT, Inc. Supplemental Information Package for the quarter ended June 30, 2013.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

HEALTH CARE REIT, INC.

By:  /s/ GEORGE L. CHAPMAN                            

George L. Chapman

Its:  Chairman of the Board, Chief Executive

Officer and President

Dated:  August 6, 2013

EX-99.1

 

FOR IMMEDIATE RELEASE – EXHIBIT 99.1

August 6, 2013

For more information contact:

Scott Estes (419) 247-2800

Jay Morgan (419) 247-2800

Health Care REIT, Inc.

Reports Second Quarter Results

Completed $1.5 billion of 2Q13 investments and $5 billion year-to-date

Expanded international platform in both Canada and the United Kingdom

2Q13 same store cash NOI increased 3.8%

Toledo, Ohio, August 6, 2013…..Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s second quarter ended June 30, 2013.

“Health Care REIT’s unique relationships, immersion in health care, and asset allocation position the company to capture above average growth in all economic climates,” commented George L. Chapman, Chairman and CEO of Health Care REIT.  “Our portfolio generated excellent 3.8% same store cash NOI growth during the second quarter, headlined by an 8.4% increase in our seniors housing operating portfolio.  Our relationship investment strategy generated two new portfolio partners, Revera and Avery Healthcare, in the attractive Canadian and U.K. markets.  These investments bring our year-to-date total to $5 billion in high-quality, accretive health care real estate expected to produce attractive cash flow growth and total returns for our shareholders.”

Recent Highlights

·Reported 2Q13 normalized FFO of $0.93 per share, a 4% increase versus 2Q12

·Reported 2Q13 normalized FAD of $0.82 per share, a 4% increase versus 2Q12

·Increased 2Q13 same-store cash NOI by 3.8%, including 8.4% growth in the seniors housing operating portfolio

·Increased private pay mix to 82% in 2Q13 from 74% in 2Q12

·Issued 23 million shares of common stock, generating $1.7 billion of proceeds in May

·Received $366 million in proceeds on dispositions in the first half of 2013, generating $52 million in gains

·Completed gross new investments of $1.5 billion in 2Q13 and $959 million in 3Q13 to-date

·Expanded international portfolio with $1.3 billion investment in Canada with Revera in May and $213 million investment in the U.K. with Avery Healthcare in July

·Completed final tranche of $4.3 billion investment with Sunrise Senior Living in July

Dividends for Second Quarter 2013  As previously announced, the Board of Directors declared a cash dividend for the quarter ended June 30, 2013 of $0.765 per share, as compared to $0.74 per share for the same period in 2012, representing a 3.4% increase.  On August 20, 2013, the company will pay its 169^th consecutive quarterly cash dividend.  The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors.

Second Quarter Investment HighlightsDuring the quarter, the company completed the previously announced $1.3 billion partnership with Revera Inc. to own 47 properties in attractive Canadian markets.   The company owns a 75% interest in the portfolio and Revera owns the remaining 25% interest.  The portfolio was previously owned 100% by Revera and is primarily comprised of independent living communities, with many offering a continuum of care that includes assisted living and/or memory care.  Revera manages the communities under an incentive-based management contract.  The company expects the portfolio to generate an initial unlevered NOI yield of 7%.  Please see the press release announcing the transaction dated May 8, 2013, for additional highlights of the transaction.  The release is available on the Investor Relations tab of the company’s website.

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2Q13 Earnings ReleaseAugust 6, 2013

Investment Subsequent to Quarter End  Subsequent to the end of the second quarter, the company completed a $213 million (£140 million) sale/leaseback transaction with Avery Healthcare. The acquired portfolio includes 14 seniors housing communities with 940 beds in the United Kingdom. The average age of the communities is two years. Avery is one of England’s premier and most active seniors housing developers/operators. The lease is absolute net with capital expenditures funded by Avery. Rent under the lease will generate an initial yield of 7% and increase 3% per year over the initial 20-year lease term. Avery will guarantee the lease. Health Care REIT has an exclusive option to invest in Avery’s future acquisitions and new developments.  The company expects to acquire up to four new seniors housing communities per year upon completion of construction, and will add each community to the master lease. Avery will fund all working capital associated with the lease-up of each community. The Avery portfolio investment is consistent with the company’s strategy to own high-quality, private pay real estate in attractive markets operated by best-in-class providers. Including the 14 Avery communities, the company has investments in 45 seniors housing communities located in attractive U.K. markets with an investment balance of $1.6 billion.

Sunrise Acquisition Update  As previously announced, the company completed the $745.2 million final phase of the Sunrise Senior Living property portfolio acquisition on July 1, 2013.  The aggregate $4.3 billion investment includes 120 wholly-owned properties and five properties owned in joint ventures with third parties.  The company expects the portfolio to generate an unlevered NOI yield exceeding 6.5% in the second half of 2013.

Sunrise Property Count Reconciliation
	Announced 8/22/12	Completed 5/7/13	Completed 7/1/13
Wholly Owned	20	71	120
Joint Venture	105	54	5
Total	125	125	125
Sunrise Investments Reconciliation ($ millions)
	Announced 8/22/12	Completed 5/7/13	Completed 7/1/13
Debt Assumed(1)	$970.0	$444.6	$389.5
Cash Required	$950.0	$3,084.4	$3,884.7
Acquisition Amount	$1,920.0	$3,529.0	$4,274.2
(1) Debt assumed is net of payoffs that occurred as of closing or shortly thereafter.

Outlook for 2013  The company affirms its 2013 guidance and assumptions as previously announced and continues to expect to generate normalized FFO in a range of $3.70 to $3.80 per diluted share and normalized FAD in a range of $3.25 to $3.35 per diluted share, both representing a 5%-8% increase. The company is revising its 2013 net income guidance primarily to reflect the net impact of the Revera and Avery acquisitions, the May common stock issuance, depreciation and amortization adjustments, normalizing items and gains/losses on property sales. The company now expects to report net income attributable to common stockholders in a range of $0.58 to $0.68 per diluted share.  The company’s guidance does not include any additional 2013 investments beyond what it has announced, nor any 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.  The company will provide additional detail regarding its 2013 outlook and assumptions on the second quarter 2013 conference call.

Conference Call Information  The company has scheduled a conference call on Tuesday, August 6, 2013 at 10:00 a.m. Eastern Time to discuss its second quarter 2013 results, industry trends, portfolio performance and outlook for 2013. 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 August 20, 2013. To access the rebroadcast, dial 855-859-2056 or 404-537-3406 (international).  The conference ID number is 17358998. 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.

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2Q13 Earnings ReleaseAugust 6, 2013

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.  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 June 30, 2013, which is available on the company’s website (www.hcreit.com), for information and reconciliations of additional supplemental reporting measures.

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 June 30, 2013, the company’s broadly diversified portfolio consisted of 1,183 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

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2Q13 Earnings ReleaseAugust 6, 2013

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 U.S. and 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.

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2Q13 Earnings ReleaseAugust 6, 2013

HEALTH CARE REIT, INC.

Financial Exhibits

Consolidated Balance Sheets (unaudited)
(in thousands)
			June 30,
			2013		2012
Assets
Real estate investments:
	Land and land improvements		$	1,710,084	$	1,189,280
	Buildings and improvements			18,776,842		14,057,887
	Acquired lease intangibles			928,910		524,145
	Real property held for sale, net of accumulated depreciation			31,882		193,307
	Construction in progress			137,481		170,785
				21,585,199		16,135,404
	Less accumulated depreciation and intangible amortization			(1,933,439)		(1,369,449)
		Net real property owned		19,651,760		14,765,955
	Real estate loans receivable(1)			312,356		300,000
	Net real estate investments			19,964,116		15,065,955
Other assets:
	Investments in unconsolidated entities			768,737		460,962
	Goodwill			68,321		68,321
	Deferred loan expenses			71,218		60,597
	Cash and cash equivalents			512,472		204,895
	Restricted cash			212,812		79,619
	Receivables and other assets(2)			598,717		407,077
				2,232,277		1,281,471
Total assets			$	22,196,393	$	16,347,426
Liabilities and equity
Liabilities:
	Borrowings under unsecured lines of credit arrangements		$	-	$	393,000
	Senior unsecured notes			6,604,979		4,910,871
	Secured debt			2,875,606		2,299,674
	Capital lease obligations			79,481		81,955
	Accrued expenses and other liabilities			539,361		400,065
Total liabilities				10,099,427		8,085,565
Redeemable noncontrolling interests				32,810		34,068
Equity:
	Preferred stock			1,022,917		1,022,917
	Common stock			285,085		214,592
	Capital in excess of par value			12,263,927		8,129,913
	Treasury stock			(21,248)		(17,272)
	Cumulative net income			2,264,573		2,023,769
	Cumulative dividends			(4,127,597)		(3,309,558)
	Accumulated other comprehensive income			(49,174)		(13,590)
	Other equity			5,678		7,302
		Total Health Care REIT, Inc. stockholders’ equity		11,644,161		8,058,073
	Noncontrolling interests			419,995		169,720
Total equity				12,064,156		8,227,793
Total liabilities and equity			$	22,196,393	$	16,347,426
(1) Includes non-accrual loan balances of $4,230,000 and $12,956,000 at June 30, 2013 and 2012, respectively.
(2) Includes net straight-line receivable balances of $174,138,000 and $144,612,000 at June 30, 2013 and 2012, respectively.

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2Q13 Earnings ReleaseAugust 6, 2013

Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2013		2012		2013		2012
Revenues:
		Rental income		$	302,465	$	263,704	$	598,753	$	512,662
		Resident fees and service			370,995		165,654		698,319		323,828
		Interest income			7,640		7,879		16,696		16,020
		Other income			1,025		1,482		1,725		3,166
Gross revenues					682,125		438,719		1,315,493		855,676
Expenses:
		Interest expense			110,629		91,299		220,585		179,780
		Property operating expenses			278,587		135,839		531,941		264,641
		Depreciation and amortization			200,108		127,599		386,837		248,136
		General and administrative expenses			23,902		25,870		51,081		53,621
		Transaction costs			28,136		28,691		94,116		34,270
		Loss (gain) on derivatives, net			(2,716)		(2,676)		(407)		(2,121)
		Loss (gain) on extinguishment of debt, net			-		576		(308)		576
Total expenses					638,646		407,198		1,283,845		778,903
Income (loss) from continuing operations before income taxes
	and income from unconsolidated entities				43,479		31,521		31,648		76,773
Income tax (expense) benefit					(1,215)		(1,447)		(3,978)		(2,918)
Income (loss) from unconsolidated entities					(5,461)		1,456		(3,198)		2,989
Income (loss) from continuing operations					36,803		31,530		24,472		76,844
Discontinued operations:
		Gain (loss) on sales of properties, net			(29,997)		32,450		52,495		33,219
		Income (loss) from discontinued operations, net			375		12,895		2,013		24,266
					(29,622)		45,345		54,508		57,485
Net income (loss)					7,181		76,875		78,980		134,329
Less:			Preferred dividends		16,602		16,719		33,203		35,926
			Preferred stock redemption charge		-		6,242		-		6,242
			Net income (loss) attributable to noncontrolling interests		(913)		(821)		(774)		(1,876)
Net income (loss) attributable to common stockholders				$	(8,508)	$	54,735	$	46,551	$	94,037
Average number of common shares outstanding:
		Basic			273,091		213,498		266,602		206,612
		Diluted			276,481		215,138		266,602		208,237
Net income (loss) attributable to common stockholders per share:
		Basic		$	(0.03)	$	0.26	$	0.17	$	0.46
		Diluted		$	(0.03)	$	0.25	$	0.17	$	0.45
Common dividends per share				$	0.765	$	0.74	$	1.53	$	1.48

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2Q13 Earnings ReleaseAugust 6, 2013

Normalizing Items									Exhibit 1
(in thousands, except per share data)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Transaction costs		$	28,136 (1)	$	28,691	$	94,116	$	34,270
Special stock compensation grants			-		-		-		4,316
Loss (gain) on derivatives, net			(2,716)(2)		(2,676)		(407)		(2,121)
Loss (gain) on extinguishment of debt, net			-		576		(308)		576
Held for sale hospital operating expenses			-		-		-		215
Preferred stock redemption charge			-		6,242		-		6,242
Less: Normalizing items attributable to noncontrolling interests and unconsolidated entities, net			(11)		-		(11)		-
Total		$	25,409	$	32,833	$	93,390	$	43,498
Average diluted common shares outstanding			276,481		215,138		269,580		208,237
Net amount per diluted share		$	0.09	$	0.15	$	0.35	$	0.21
Notes:	(1) Primarily costs incurred with seniors housing acquisitions.
	(2) Related to currency hedges executed to lock the exchange rates on international transactions.

Funds Available for Distribution Reconciliation											Exhibit 2
(in thousands, except per share data)
				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2013		2012		2013		2012
Net income (loss) attributable to common stockholders				$	(8,508)	$	54,735	$	46,551	$	94,037
Depreciation and amortization(1)					200,477		132,963		387,599		260,385
Losses/impairments (gains) on properties, net					29,997		(32,450)		(52,495)		(33,219)
Noncontrolling interests(2)					(6,831)		(4,569)		(11,911)		(9,059)
Unconsolidated entities(3)					11,348		6,641		25,269		7,478
Gross straight-line rental income					(13,683)		(12,792)		(28,329)		(23,931)
Prepaid/straight-line rent receipts					184		2,123		4,441		3,138
Amortization related to above (below) market leases, net					40		47		195		(205)
Non-cash interest expense					1,237		2,849		4,731		6,542
Cap-ex, tenant improvements, lease commissions					(12,174)		(10,647)		(24,059)		(19,233)
Funds available for distribution					202,087		138,900		351,992		285,933
Normalizing items, net(4)					25,409		32,833		93,390		43,498
Prepaid/straight-line rent receipts					(184)		(2,123)		(4,441)		(3,138)
Funds available for distribution - normalized				$	227,312	$	169,610	$	440,941	$	326,293
Average diluted common shares outstanding					276,481		215,138		269,580		208,237
Per share data:
	Net income (loss) attributable to common stockholders			$	(0.03)	$	0.25	$	0.17	$	0.45
	Funds available for distribution			$	0.73	$	0.65	$	1.31	$	1.37
	Funds available for distribution - normalized			$	0.82	$	0.79	$	1.64	$	1.57
Normalized FAD Payout Ratio:
	Dividends per common share			$	0.765	$	0.74	$	1.53	$	1.48
	FAD per diluted share - normalized			$	0.82	$	0.79	$	1.64	$	1.57
		Normalized FAD payout ratio			93%		94%		93%		94%
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.

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2Q13 Earnings ReleaseAugust 6, 2013

Funds From Operations Reconciliation											Exhibit 3
(in thousands, except per share data)
				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2013		2012		2013		2012
Net income (loss) attributable to common stockholders				$	(8,508)	$	54,735	$	46,551	$	94,037
Depreciation and amortization(1)					200,477		132,963		387,599		260,385
Losses/impairments (gains) on properties, net					29,997		(32,450)		(52,495)		(33,219)
Noncontrolling interests(2)					(7,821)		(5,190)		(13,614)		(10,179)
Unconsolidated entities(3)					16,521		7,873		33,504		10,759
Funds from operations					230,666		157,931		401,545		321,783
Normalizing items, net(4)					25,409		32,833		93,390		43,498
Funds from operations - normalized				$	256,075	$	190,764	$	494,935	$	365,281
Average diluted common shares outstanding					276,481		215,138		269,580		208,237
Per share data:
	Net income (loss) attributable to common stockholders			$	(0.03)	$	0.25	$	0.17	$	0.45
	Funds from operations			$	0.83	$	0.73	$	1.49	$	1.55
	Funds from operations - normalized			$	0.93	$	0.89	$	1.84	$	1.75
Normalized FFO Payout Ratio:
	Dividends per common share			$	0.765	$	0.74	$	1.53	$	1.48
	FFO per diluted share - normalized			$	0.93	$	0.89	$	1.84	$	1.75
		Normalized FFO payout ratio			82%		83%		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, 2013							Exhibit 4
(in thousands, except per share data)
		Prior Outlook				Current Outlook
		Low		High		Low		High
FFO Reconciliation:
Net income attributable to common stockholders		$	0.70	$	0.80	$	0.58	$	0.68
Losses/impairments (gains) on sale of properties, net			(0.31)		(0.31)		(0.19)		(0.19)
Depreciation and amortization(1)			3.06		3.06		2.97		2.97
Funds from operations			3.45		3.55		3.36		3.46
Normalizing items, net(2)			0.25		0.25		0.34		0.34
Funds from operations - normalized		$	3.70	$	3.80	$	3.70	$	3.80
FAD Reconciliation:
Net income attributable to common stockholders		$	0.70	$	0.80	$	0.58	$	0.68
Losses/impairments (gains) on sale of properties, net			(0.31)		(0.31)		(0.19)		(0.19)
Depreciation and amortization(1)			3.06		3.06		2.97		2.97
Net straight-line rent and above/below amortization(1)			(0.18)		(0.18)		(0.18)		(0.18)
Non-cash interest expense(1)			0.04		0.04		-		-
Cap-ex, tenant improvements, lease commissions(1)			(0.29)		(0.29)		(0.25)		(0.25)
Funds available for distribution			3.02		3.12		2.93		3.03
Normalizing items, net(2)			0.25		0.25		0.34		0.34
Prepaid/straight-line rent receipts			(0.02)		(0.02)		(0.02)		(0.02)
Funds available for distribution - normalized		$	3.25	$	3.35	$	3.25	$	3.35
Notes:	(1) Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated entities.
	(2) See Exhibit 1.

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EX-99.2

 

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Exhibit 99.2