-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QgyYlmfNgujgCIjVJh6//+WyMF8LSbAjwPRO87GrOfYDDNiaMyefhM2W8a6ePLf+ NG13MlsTvB/QUFzA0nOzDQ== 0000950152-00-004145.txt : 20000516 0000950152-00-004145.hdr.sgml : 20000516 ACCESSION NUMBER: 0000950152-00-004145 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH CARE REIT INC /DE/ CENTRAL INDEX KEY: 0000766704 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 341096634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08923 FILM NUMBER: 633393 BUSINESS ADDRESS: STREET 1: ONE SEAGATE STE 1500 STREET 2: P O BOX 1475 CITY: TOLEDO STATE: OH ZIP: 43604 BUSINESS PHONE: 4192472800 10-Q 1 HEALTH CARE REIT, INC. 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2000 ------------------------------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to __________________________ Commission File number 1-8923 HEALTH CARE REIT, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 34-1096634 - ----------------------------- ------------------------------ (State or jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One SeaGate, Suite 1500, Toledo, Ohio 43604 - ------------------------------------- ------------------------------ (Address of principal executive office) (Zip Code) (Registrant's telephone number, including area code) (419) 247-2800 --------------------------- - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . ------- ------ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes _____. No _____. APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of May 11, 2000. Class: Shares of Common Stock, $1.00 par value Outstanding 28,576,877 shares 2 HEALTH CARE REIT, INC. INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets - March 31, 2000 and December 31, 1999 3 Consolidated Statements of Income - Three months ended March 31, 2000 and 1999 4 Consolidated Statements of Shareholders' Equity - Three months ended March 31, 2000 and 1999 5 Consolidated Statements of Cash Flows - Three months ended March 31, 2000 and 1999 6 Notes to Unaudited Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosure About Market Risk 11 PART II. OTHER INFORMATION Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 EXHIBIT INDEX 14
-2- 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS -------------------- CONSOLIDATED BALANCE SHEETS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
MARCH 31 DECEMBER 31 2000 1999 (UNAUDITED) (NOTE) ------------- ------------- ASSETS (IN THOUSANDS) Real estate investments: Real property owned: Land $ 72,373 $ 73,234 Buildings & improvements 720,601 730,337 Construction in progress 52,975 58,954 ----------- ----------- 845,949 862,525 Less accumulated depreciation (40,494) (35,746) ----------- ----------- Total real property owned 805,455 826,779 Loans receivable 404,189 401,019 ----------- ----------- 1,209,644 1,227,798 Less allowance for loan losses (5,837) (5,587) ----------- ----------- Net real estate investments 1,203,807 1,222,211 Other Assets: Direct investments 31,164 25,361 Marketable securities 545 863 Cash and cash equivalents 1,380 2,129 Deferred loan expenses 3,461 3,311 Receivables and other assets 21,509 17,296 ----------- ----------- 58,059 48,960 ----------- ----------- TOTAL ASSETS $ 1,261,866 $ 1,271,171 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 172,900 $ 177,500 Senior unsecured notes 290,000 290,000 Secured debt 71,318 71,342 Accrued expenses and other liabilities 21,739 25,333 ----------- ----------- TOTAL LIABILITIES 555,957 564,175 Shareholders' equity: Preferred Stock, $1.00 par value: Authorized - 10,000,000 shares Issued and outstanding - 6,000,000 shares 150,000 150,000 Common Stock, $1.00 par value: Authorized - 75,000,000 shares Issued and outstanding - 28,576,877 in 2000 and 28,532,419 in 1999 28,577 28,532 Capital in excess of par value 524,778 524,204 Undistributed net income 7,087 8,883 Accumulated other comprehensive income 248 593 Unamortized restricted stock (4,781) (5,216) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 705,909 706,996 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,261,866 $ 1,271,171 =========== ===========
NOTE: The consolidated balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to unaudited consolidated financial statements -3- 4 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31 2000 1999 ------------ ------------- (IN THOUSANDS EXCEPT PER SHARE DATA) REVENUES: Rental income $21,630 $14,140 Interest income 11,521 11,895 Commitment fees and other income 1,676 1,946 Prepayment fees - 183 ------- ------- Total revenue 34,827 28,164 EXPENSES: Interest expense 9,101 4,269 Loan expense 317 166 Provision for depreciation 5,263 3,555 Provision for losses 250 150 General and administrative expenses 1,900 1,674 ------- ------- Total expenses 16,831 9,814 ------- ------- Net income before gains on sale of properties 17,996 18,350 Gains on sale of properties 123 628 ------- ------- Net income 18,118 18,978 Preferred stock dividends 3,362 2,759 ------- ------- Net Income Available to Common Shareholders $14,757 $16,219 ======= ======= Average number of shares outstanding: Basic 28,315 28,077 Diluted 28,546 28,393 Net income per share: Basic $ 0.52 $ 0.58 Diluted 0.52 0.57 Dividends declared and paid per common share $ 0.58 $ 0.56
See notes to unaudited consolidated financial statements -4- 5 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
Three months ended March 31, 2000 -------------------------------------------------------------------------------------------- Capital In Unamortized Accum. Other Preferred Common Excess of Restricted Undistributed Comprehensive Stock Stock Par Value Stock Net Income Income Total -------------------------------------------------------------------------------------------- Balance at beginning of period $150,000 28,532 $524,204 $(5,216) $ 8,883 $ 593 $706,996 Comprehensive income: Net income 18,118 18,118 Unrealized gains on securities (318) (318) Foreign currency translation adjustment (27) (27) -------- Comprehensive income 18,042 Proceeds from issuance of shares from dividend reinvestment and stock incentive plans, net of forfeitures 45 574 118 737 Restricted stock amortization 317 317 Cash dividends paid 19,914 19,914 ------- ------- ------- -------- --------- --------- -------- Balance at end of period $150,000 $28,577 $524,778 $(4,781) $ 7,087 $ 248 $705,909 ======== ======= ======== ======== ========= ========= ========
Three months ended March 31, 1999 -------------------------------------------------------------------------------------------- Capital In Unamortized Accum. Other Preferred Common Excess of Restricted Undistributed Comprehensive Stock Stock Par Value Stock Net Income Income Total -------------------------------------------------------------------------------------------- Balance at beginning of period $75,000 $28,240 $520,692 $(4,589) $ 10,434 $ 3,982 $633,759 Comprehensive income: Net income 18,978 18,978 Unrealized gains on securities (1,873) (1,873) -------- Comprehensive income 17,105 Proceeds from issuance of shares from dividend reinvestment plan 77 1,745 (228) 1,594 Proceeds from sale of Preferred Stock 75,000 (2,455) 72,545 Restricted stock amortization 269 269 Cash dividends paid (18,578) (18,578) -------- ------- -------- ------- --------- -------- -------- Balance at end of period $150,000 $28,317 $519,982 $(4,548) $ 10,834 $ 2,109 $706,694 ======== ======= ======== ======= ========= ======== ========
See notes to unaudited consolidated financial statements -5- 6 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31 2000 1999 ------------------------------ (IN THOUSANDS) OPERATING ACTIVITIES Net income $ 18,118 $ 18,978 Adjustments to reconcile net income to net cash Provision for depreciation 5,484 3,650 Provision for losses 250 150 Amortization 633 443 Loan and commitment fees earned (more) less than cash received (1,154) 529 Direct financing lease income less than cash received - 35 Rental income in excess of cash received (1,697) (1,573) Interest and other income in excess of cash received (75) (107) Increase(decrease) in accrued expenses and other liabilities (2,440) 1,527 Increase in receivables and other assets (2,059) (1,730) ---------- ---------- NET CASH PROVIDED FROM OPERATING ACTIVITIES 17,060 21,902 INVESTING ACTIVITIES Investment in real properties (10,188) (84,829) Investment in loans receivable (3,799) (13,039) Other investments, net (5,754) (1,919) Principal collected on loans 630 6,634 Proceeds from sale of properties 26,248 5,567 Other (679) (318) ------------ ------------ NET CASH PROVIDED FROM/(USED IN) INVESTING ACTIVITIES 6,458 (87,904) FINANCING ACTIVITIES Net payments under line of credit arrangements (4,600) (82,350) Principal payments on long-term obligations (24) (21) Net proceeds from the issuance of Common Stock 737 1,594 Net proceeds from the issuance of Preferred Stock - 72,723 Proceeds from issuance of Senior Notes - 50,000 Proceeds from issuance of Secured Debt - 44,000 Increase in deferred loan expense (466) (1,404) Cash distributions to shareholders (19,914) (18,578) ------------ ------------ NET CASH PROVIDED FROM/(USED IN) FINANCING ACTIVITIES (24,267) 65,964 ------------ ----------- Decrease in cash and cash equivalents (749) (38) Cash and cash equivalents at beginning of period 2,129 1,269 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,380 $ 1,231 ============ =========== Supplemental Cash Flow Information -- Interest Paid $ 11,522 $ 6,523 ============ ===========
See notes to unaudited consolidated financial statements -6- 7 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS HEALTH CARE REIT, INC. AND SUBSIDIARIES NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered for a fair presentation has been included. Operating results for the three months ended March 31, 2000, are not necessarily an indication of the results that may be expected for the year ending December 31, 2000. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1999. NOTE B - REAL ESTATE INVESTMENTS During the three months ended March 31, 2000, the Company invested $183,000 in real property, made construction advances of $12,083,000 and funded $5,867,000 of equity related investments. During the three months ended March 31, 2000, the Company sold $26,248,000 of real property, received principal payments on real estate mortgages of $630,000 and had net advances on working capital loans of $1,756,000. With respect to the above-mentioned construction advances, funding for construction in progress in connection with twelve properties owned directly by the Company totaling $10,104,000, and funding associated with six construction loans represented $1,979,000. During the three months ended March 31, 2000, one of the construction properties in progress with an investment balance of $3,305,000 completed the construction phase of the Company's investment process and was converted to permanent operating leases.. Also, during the three months ended March 31, 2000, one of the construction loans with an investment balance of $2,975,000 completed the construction phase of the Company's investment process and was converted to investments in permanent mortgage loans. NOTE C - DIRECT INVESTMENTS Management determines the appropriate classification of a direct investment at the time of acquisition and reevaluates such designation as of each balance sheet date. Debt securities which are classified as held to maturity are stated at historical cost. Equity investments are stated at historical cost. At March 31, 2000, direct investments included the preferred stock of one private corporation and subordinated debt in eight private corporations, and ownership representing a 31% interest in Atlantic Healthcare Finance L.P., a property investment group that specializes in the financing, through sale and leaseback transactions, of nursing homes located in the United Kingdom and continental Europe. NOTE D - MARKETABLE SECURITIES Marketable securities are stated at market value with unrealized gains and losses reported in a separate component of shareholders' equity. At March 31, 2000, marketable securities reflected the market value of the common stock of two publicly owned corporations which were obtained by the Company at no cost. -7- 8 NOTE E - CONTINGENT LIABILITIES As disclosed in the financial statements for the year ended December 31, 1999, the Company was contingently liable for certain obligations amounting to $12,425,000. NOTE F - DISTRIBUTIONS PAID TO COMMON SHAREHOLDERS On February 21, 2000, the Company paid a dividend of $0.58 per share to shareholders of record on February 2, 2000. This dividend related to the period from October 1, 1999 through December 31, 1999. NOTE G - EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
Three months ended March 31 ------------------------------------------------- 2000 1999 ------------------ ------------------ Numerator for basic and diluted earnings per share-income available to common shareholders $ 14,757 $ 16,219 ================== ================== Denominator for basic earnings per share - weighted average shares 28,315 28,077 Effect of dilutive securities: Employee stock options - 116 Nonvested restricted shares 231 200 ------------------ ------------------ Dilutive potential common shares 231 316 ------------------ ------------------ Denominator for diluted earnings per share - adjusted weighted average shares 28,546 28,393 ================== ================== Basic earnings per share $ 0.52 $ 0.58 Diluted earnings per share $ 0.52 $ 0.57
The diluted earnings per share calculation excludes the dilutive effect of 1,813,000 and 179,000 shares for 2000 and 1999, respectively, because the exercise price was greater than the average market price. The Series C Cumulative Convertible Preferred Stock was not included in this calculation as the effect of the conversion was anti-dilutive. -8- 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- LIQUIDITY AND CAPITAL RESOURCES At March 31, 2000, the Company's net real estate investments totaled approximately $1,203,807,000, which included 179 assisted living facilities, 48 nursing facilities, six specialty care facilities and two behavioral care facilities. Depending upon the availability and cost of external capital, the Company anticipates making additional investments in health care related facilities. New investments are funded from temporary borrowings under the Company's line of credit arrangements, internally generated cash and the proceeds derived from asset sales. Permanent financing for future investments, which replaces funds drawn under the line of credit arrangements, is expected to be provided through a combination of private and public offerings of debt and equity securities, and the assumption of secured debt. The Company believes its liquidity and various sources of available capital are sufficient to fund operations, meet debt service and dividend requirements, and finance future investments. During 1999 and the first quarter of 2000, the underperformance of publicly owned nursing home and assisted living companies, combined with the much publicized shift in equity funds flow from income-oriented investments to high-growth opportunities, impaired the stock valuations of all health care REITs. The availability of external capital is limited and expensive, constraining new investment activity and earnings growth. The Company believes the restrictive capital environment will continue until the prospects for the long-term care industry improve. In October 1999, the Company announced a $200 million asset divestiture program, which is proceeding as planned. The Company believes the limited asset sales will strengthen the Company's portfolio and generate liquidity, enhancing the Company's balance sheet. This strategy should position the Company for new investment and growth opportunities in the future. As of March 31, 2000, the Company had a total outstanding debt balance of $534,218,000 and shareholders' equity of $705,909,000 which represents a debt to equity ratio of 0.76 to 1.0, and a debt to total capitalization ratio of 0.43 to 1.0. As of March 31, 2000, the Company had an unsecured revolving line of credit expiring March 31, 2001 in the amount of $175,000,000 bearing interest at the lender's prime rate or LIBOR plus 1.0%. In addition, the Company had an unsecured revolving line of credit in the amount of $20,000,000 bearing interest at the lender's prime rate expiring April 30, 2001. At March 31, 2000, under the Company's line of credit arrangements, available funding totaled $22,100,000. As of March 31, 2000, the Company has effective shelf registrations on file with the Securities and Exchange Commission under which the Company may issue up to $380,319,000 of securities including debt, convertible debt, common and preferred stock. Depending upon market conditions, the Company anticipates issuing securities under such shelf registrations to invest in additional health care facilities and to repay borrowings under the Company's line of credit arrangements. -9- 10 RESULTS OF OPERATIONS Revenues for the three months ended March 31, 2000, were $34,950,000 as compared with $28,792,000 for the three months ended March 31, 1999. Revenue growth was generated primarily by increased rental income of $7,490,000 as a result of additional real estate investments made during the past twelve months. During the three months ended March 31, 2000, the Company recognized gains on sales of properties and prepayment fees of $123,000 as compared with $811,000 for the same period in the prior year. Expenses for the three months ended March 31, 2000, totaled $16,831,000, an increase of $7,017,000 from expenses of $9,814,000 for the same period in 1999. The increases in total were related to an increase in interest expense, an additional expense associated with the provision for depreciation and an increase in general and administrative expenses. Interest expense for the three months ended March 31, 2000, was $9,101,000 as compared to $4,269,000 for the same period in 1999. The increase in the 1999 period was primarily due to the issuance of $114,000,000 of long-term debt and higher average borrowings under the Company's lines of credit. Interest expense is offset by the amount of capitalized interest recorded. The Company capitalizes certain interest costs associated with funds used to finance the construction of properties owned directly by the Company. The amount capitalized is based upon the borrowings outstanding during the construction period using the rate of interest which approximates the Company's cost of financing. The Company's interest expense is reduced by the amount capitalized. Capitalized interest for the three months ended March 31, 2000 totaled $1,220,000, as compared with $3,158,000 for the same period in 1999. The provision for depreciation for the three months ended March 31, 2000, totaled $5,263,000, an increase of $1,644,000 over the comparable period in 1999 as a result of additional investments in properties owned directly by the Company. General and administrative expenses for the three months ended March 31, 2000, totaled $1,900,000, as compared with $1,674,000 for the same period in 1999. The expenses for the three month period in 2000 were 5.4% of revenues as compared with 5.8% for the same period in 1999. Dividend expense, associated with the Company's outstanding preferred stock, for the three months ended March 31, 2000, totaled $3,362,000, as compared with $2,759,000 for the same period in 1999. As a result of the various factors mentioned above, net income available to common shareholders for the three months ended March 31, 2000, was $14,757,000, or $.52 per diluted share, as compared with $16,219,000, or $0.57 per diluted share, for the comparable periods in 1999. IMPACT OF INFLATION During the past three years, inflation has not significantly affected the earnings of the Company because of the moderate inflation rate. Additionally, earnings of the Company reflect long-term investments with fixed rents or interest rates. These investments are mainly financed with a combination of equity, senior notes and borrowings under the revolving lines of credit. During inflationary periods, which generally are accompanied by rising interest rates, the Company's ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs. -10- 11 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------- The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates. The Company seeks to mitigate the effects of fluctuations in interest rates by matching the term of new investments with new long-term fixed rate borrowings to the extent possible. The market value of the Company's long-term fixed rate borrowings is subject to interest rate risk. Generally, the market value of fixed rate financial instruments will decrease as interest rates rise and increase as interest rates fall. The estimated fair value of the Company's senior unsecured notes at March 31, 2000 was $259 million. A 1% increase in interest rates would result in a decrease in fair value of the Company's senior unsecured notes by approximately $9 million. The Company is subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of such refinancing may not be as favorable as the terms of current indebtedness. The majority of the Company's borrowings were completed pursuant to indentures or contractual agreements which limit the amount of indebtedness the Company may incur. Accordingly, in the event that the Company is unable to raise additional equity or borrow money because of these limitations, the Company's ability to acquire additional properties may be limited. At March 31, 2000, the Company's variable interest rate debt exceeded its variable interest rate assets, presenting an exposure to rising interest rates. The Company may or may not elect to use financial derivative instruments to hedge variable interest rate exposure. Such decisions are principally based on the Company's policy to match its variable rate investments with comparable borrowings, but is also based on the general trend in interest rates at the applicable dates and the Company's perception of future volatility of interest rates. POTENTIAL RISKS FROM BANKRUPTCIES The Company is exposed to the risk that its operators may not be able to meet the rent and interest payments due the Company, which may result in an operator bankruptcy or insolvency. Although the Company's operating lease agreements and loans provide the Company the right to terminate an investment, evict an operator, demand immediate repayment, and other remedies, the bankruptcy laws afford certain rights to a party that has filed for bankruptcy or reorganization. An operator in bankruptcy may be able to restrict the Company's ability to collect unpaid rent or interest, and collect interest during the bankruptcy proceeding. The receipt of liquidation proceeds or the replacement of an operator that has defaulted on its lease or loan could be delayed by the approval process of any federal, state or local agency necessary for the transfer of the property or the replacement of the operator licensed to manage the facility. In addition, the Company may be required to fund certain expenses (i.e. real estate taxes and maintenance) to retain control of a property. In some instances the Company may take possession of a property, which may expose the Company to successor liabilities. Should such events occur, the Company's revenue and operating cash flow may be adversely affected. -11- 12 PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION ----------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits 27 Financial Data Schedule 99.1 Press release dated January 10, 2000 99.2 Press release dated January 18, 2000 99.3 Press release dated January 20, 2000 99.4 Press release dated February 3, 2000 (b) Reports on Form 8-K None -12- 13 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HEALTH CARE REIT, INC. Date: May 15, 2000 By: /S/ GEORGE L. CHAPMAN ---------------------- ---------------------------------------- George L. Chapman, Chairman, Chief Executive Officer and President Date: May 15, 2000 By: /S/ EDWARD F. LANGE, JR. --------------------- ---------------------------------------- Edward F. Lange, Jr., Chief Financial Officer Date: May 15, 2000 By: /S/ MICHAEL A. CRABTREE --------------------- ---------------------------------------- Michael A. Crabtree, Chief Accounting Officer -13- 14 EXHIBIT INDEX ------------- The following documents are included in this Form 10-Q as Exhibits: DESIGNATION NUMBER UNDER ITEM 601 OF REGULATION S-K EXHIBIT DESCRIPTION -------------- ------------------- 27 Financial Data Schedule 99.1 Press release dated January 10, 2000 99.2 Press release dated January 18, 2000 99.3 Press release dated January 20, 2000 99.4 Press release dated February 3, 2000 -14- EX-27 2 EXHIBIT 27
5 0000766704 HEALTH CARE REIT, INC. 1,000 3-MOS DEC-31-2000 MAR-31-2000 1,380 545 21,509 5,837 0 0 805,455 40,494 1,261,866 0 534,218 0 150,000 28,577 527,332 1,261,866 0 34,827 0 0 5,580 250 9,101 14,757 0 14,757 0 0 0 14,757 0.52 0.52
EX-99.1 3 EXHIBIT 99.1 1 Exhibit 99.1 JANUARY 10, 2000 FOR MORE INFORMATION CONTACT: ERIN IBELE - (419) 247-2800 ED LANGE - (419) 247-2800 HEALTH CARE REIT EXPANDS RELATIONSHIP WITH SUMMERVILLE HEALTHCARE GROUP Toledo, Ohio, January 10, 2000 - HEALTH CARE REIT, INC. (NYSE/HCN) today reported that $93 million of leases relating to eight assisted living properties leased by Chancellor Senior Housing, Inc. and operated by CareMatrix Corporation have been assigned to Summerville HealthCare Group, one of Health Care REIT's key private operators. "This is an important transaction, benefiting all of the parties involved," said George L. Chapman, chairman and chief executive officer of Health Care REIT. "We are able to increase our investment portfolio with Summerville, a well-capitalized operator with a successful track record. Summerville gains significant critical mass with the addition of modern, purpose-built facilities, and CareMatrix reduces the number of noncore properties it will operate." "We are pleased to support CareMatrix's repositioning efforts in light of our excellent relationship with that organization and its principals. At the same time, we successfully retained these properties with Summerville with whom we have been working for more than three years with very favorable results," said Chapman. With the addition of the CareMatrix properties, the company's Summerville investment balance totaled approximately $171 million at December 31, 1999, 13.5% of total assets. As part of the assignment and in keeping with Health Care REIT's commitment to portfolio diversification, Summerville has agreed to refinance five development projects, which would reduce the Summerville investment to approximately $136 million, or 10% of the company's total assets. Including the CareMatrix properties, Summerville, which was founded in 1996, now has 55 communities in operation or development in 12 states with more than 5,100 units and more than 2,200 employees. Summerville President and CEO, Russell D. Ragland, said, "We're excited to have these state-of-the-art communities, their residents and employees as part of Summerville. Moreover, expanding our relationship with a partner like Health Care REIT, with its strong management team, assisted living expertise and industry relationships, ensures that we are well-positioned to maximize this opportunity." -15- 2 Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes, assisted living facilities and retirement centers. At December 31, 1999, the company had investments in 238 health care facilities in 34 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. Information is also 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. #### -16- EX-99.2 4 EXHIBIT 99.2 1 Exhibit 99.2 FOR IMMEDIATE RELEASE January 18, 2000 For more information contact: Erin Ibele - (419) 247-2800 Ed Lange - (419) 247-2800 HEALTH CARE REIT, INC. ANNOUNCES INCREASE IN QUARTERLY DIVIDEND Toledo, Ohio, January 18, 2000...HEALTH CARE REIT, INC. (NYSE/HCN) announced today that the Board of Directors voted to declare a dividend for the quarter ended December 31, 1999 of $0.58 per share as compared to $0.56 per share for the same period in 1998. The dividend is a one-half cent increase from the dividend paid for the third quarter of 1999 and represents the 115th consecutive dividend payment. The dividend will be payable February 21, 2000 to shareholders of record on February 1, 2000. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust which invests in health care facilities, primarily nursing homes, assisted living facilities and retirement centers. At December 31, 1999, the company had investments in 238 health care facilities in 34 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, or visit the company's website at www.hcreit.com ##### -17- EX-99.3 5 EXHIBIT 99.3 1 Exhibit 99.3 FOR IMMEDIATE RELEASE January 20, 2000 For more information contact: Erin Ibele - (419) 247-2800 Ed Lange - (419) 247-2800 HEALTH CARE REIT, INC. ANNOUNCES FOURTH QUARTER INVESTMENTS OF $34 MILLION 1999 INVESTMENTS TOTAL $275 MILLION Toledo, Ohio, January 20, 2000..... HEALTH CARE REIT, INC. (NYSE/HCN) announced today that investment activity for the fourth quarter of 1999 totalled $34,370,000. For the year ended December 31, 1999, the company funded investments of $275,119,000. The 1999 investment activity contributed to an 18.5 percent increase in total assets which totalled $1,271,000,000 at December 31, 1999, as compared with $1,073,000,000 at December 31, 1998. Investment activity during 1999 included real property investments of $215,339,000, mortgage loans of $52,318,000 and equity related investments of $7,462,000. Facility-based investments, inclusive of construction advances, were comprised of $216,808,000 for 77 assisted living facilities, $28,441,000 for ten nursing homes and $22,408,000 for ten retirement centers. Aggregate funding was provided to 26 operators in 28 states. At December 31, 1999, the company had approximately $53 million in unfunded commitments. During 1999, 55 construction projects completed the construction phase of the company's investment process. Forty-three facilities were converted to permanent real property investments, with an aggregate investment of $224,117,000. Twelve facilities were converted to permanent mortgage loans with an aggregate investment balance of $67,553,000. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust, which invests in health care facilities, primarily nursing homes, assisted living facilities and retirement centers. At December 31, 1999, the company had investments in 238 health care facilities in 34 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, or visit the company's website at www.hcreit.com. ##### -18- EX-99.4 6 EXHIBIT 99.4 1 Exhibit 99.4 FOR IMMEDIATE RELEASE FEBRUARY 3, 2000 FOR MORE INFORMATION CONTACT: ERIN IBELE - (419) 247-2800 ED LANGE - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS 1999 OPERATING RESULTS 1999 YEAR END RESULTS 1999 YEAR END HIGHLIGHTS --------------------- ------------------------ - $129 million gross income - $1.3 billion total assets - $2.76 per diluted share FFO - $275 million new investments - $2.27 per share dividends - 18% asset growth - 82% FFO payout ratio - 7% per diluted share FFO growth Toledo, Ohio, February 3, 2000........HEALTH CARE REIT, INC. (NYSE/HCN) today announced operating results for the fourth quarter and year ended December 31, 1999. For 1999, funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, achieved a record level of $78.4 million, or $2.76 per diluted share, a 7 percent per share increase from $66.8 million, or $2.57 per diluted share, for the same period in 1998. Revenues for 1999 increased 32 percent to $129.3 million from $98 million a year ago. Net income available to common shareholders for 1999, totaled $62.8 million, or $2.21 per diluted share, as compared with net income available to common shareholders of $58.1 million, or $2.24 per diluted share, for the same period in 1998. For the fourth quarter of 1999, FFO totaled $19.9 million, or $0.70 per diluted share, a 6 percent per share increase from $18.4 million, or $0.66 per diluted share, for the same period in 1998. Revenues for the quarter increased 22 percent to $33.8 million from $27.8 million for the three months ended December 31, 1998. Net income available to common shareholders for the fourth quarter of 1999 totaled $14.6 million, or $0.51 per diluted share, as compared with net income available to common shareholders of $16.5 million, or $0.59 per diluted share, for the same period in 1998. Revenue growth was generated primarily by new investment activity in 1998 and 1999 of $397.5 million and $275 million, respectively. Investment activity contributed to an 18 percent increase in total assets, which at December 31, 1999, totaled $1.3 billion as compared with total assets of $1.1 billion at December 31, 1998. Dividend payments to common shareholders for the year ended December 31, 1999, totaled $64.4 million, or $2.27 per share, as compared with dividend payments of $56.5 million, or $2.19 per share, for the same period in 1998. Correspondingly, the FFO payout ratio for 1999 was 82 percent as compared with 85 percent for 1998. -19- 2 At December 31, 1999, the company had a total outstanding debt balance of $539 million, and shareholders' equity of $707 million, which represents a debt to total capitalization ratio of 0.43 to 1.0. "We are pleased with the company's 1999 operating results, which were consistent with consensus estimates and met management's expectations," commented George L. Chapman, chairman and chief executive officer. "The company's FFO growth was generated by continued investment activity, which was supported by the proceeds realized from the placement of $75 million of convertible preferred stock in January, the issuance of $50 million of senior unsecured notes in March and $56 million of asset sales. "However, the past 12 months have presented many challenges to the health care REIT sector. The underperformance of publicly owned nursing home and assisted living companies, combined with the much publicized shift in equity funds flow from income-oriented investments to high-growth opportunities, have impaired the stock valuations of all health care REITs. The availability of external capital is limited and expensive, constraining new investment activity and earnings growth. We believe the restrictive capital environment will continue until the prospects for the long-term care industry improve. "Our top priority remains to preserve the company's outstanding fundamentals, that include a well capitalized balance sheet with modest leverage, strong interest coverage and an attractive FFO payout ratio that demonstrates significant dividend coverage. "In October 1999, we announced a $200 million asset divestiture program, which is proceeding as planned. The limited asset sales will strengthen the company's portfolio and generate liquidity, enhancing the company's balance sheet. This strategy positions the company for new investment and growth opportunities in the future." 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, 1999, the company had investments in 238 health care facilities in 34 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. FINANCIAL SCHEDULES FOLLOW 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. ##### -20- 3 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS)
DECEMBER 31 --------------------------------- 1999 1998 --------------------------------- ASSETS Real estate investments: Real property owned: Land $ 73,234 $ 44,722 Buildings & improvements 730,337 443,574 Construction in progress 58,954 151,317 ----------- ----------- 862,525 639,613 Less accumulated depreciation (35,746) (19,624) ----------- ----------- Total real property owned 826,779 619,989 Loans receivable 401,019 412,704 ----------- ----------- 1,227,798 1,032,693 Less allowance for losses on loans receivable (5,587) (4,987) ----------- ----------- Net real estate investments 1,222,211 1,027,706 Other assets: Direct investments 25,361 26,180 Marketable securities 863 4,106 Deferred loan expenses 3,311 2,389 Cash and cash equivalents 2,129 1,269 Receivables and other assets 17,296 11,774 ----------- ----------- 48,960 45,718 ----------- ----------- TOTAL ASSETS $ 1,271,171 $ 1,073,424 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 177,500 $ 171,550 Senior unsecured notes 290,000 240,000 Secured debt 71,342 7,429 Accrued expenses and other liabilities 25,333 20,686 ----------- ----------- Total liabilities $ 564,175 $ 439,665 Shareholders' equity: Preferred Stock, $1.00 par value: Authorized - 10,000,000 shares Issued and outstanding - 6,000,000 in 1999 and 3,000,000 in 1998 150,000 75,000 Common Stock, $1.00 par value: Authorized - 40,000,000 shares Issued and outstanding -28,532,419 in 1999 and 28,240,165 in 1998 28,532 28,240 Capital in excess of par value 524,204 520,692 Undistributed net income 8,883 10,434 Accumulated other comprehensive income 593 3,982 Unamortized restricted stock (5,216) (4,589) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY $ 706,996 $ 633,759 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,271,171 $ 1,073,424 =========== ===========
-21- 4 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 ---------------------------------- ----------------------------------- 1999 1998 1999 1998 ----------------- ---------------- ----------------- ----------------- Revenues: Operating lease rents $ 20,872 $ 12,471 $ 72,700 $ 41,953 Interest income 11,574 12,274 48,076 48,488 Commitment fees and other income 1,365 1,809 6,263 5,914 Prepayment fees 0 167 1,565 588 Gain on sale of properties 0 1,049 703 1,049 -------------- ----------- ------------ ----------- $ 33,811 $ 27,770 $ 129,307 $ 97,992 Expenses: Interest expense $ 8,234 $ 4,451 $ 26,916 $ 18,030 Provision for depreciation 5,271 3,128 17,885 10,254 General and administrative 1,932 1,757 7,359 6,114 Loan expense 250 152 909 685 Provision for losses 150 150 600 600 -------------- ----------- ------------ ----------- 15,837 9,638 53,669 35,683 -------------- ----------- ------------ ----------- Net Income 17,974 18,132 75,638 62,309 Preferred stock dividends 3,351 1,664 12,814 4,160 -------------- ----------- ------------ ----------- Net Income Available to Common Shareholders $ 14,623 $ 16,468 $ 62,824 $ 58,149 ============== =========== ============ =========== Average number of common shares outstanding: Basic 28,216 27,572 28,128 25,579 Diluted 28,457 27,930 28,384 25,954 Net income per share: Basic $ 0.52 $ 0.60 $ 2.23 $ 2.27 Diluted 0.51 0.59 2.21 2.24 Funds from operations $ 19,894 $ 18,380 $ 78,441 $ 66,766 Funds from operations per share: Basic $ 0.71 $ 0.67 $ 2.79 $ 2.61 Diluted 0.70 0.66 2.76 2.57 Dividends per share $ 0.575 $ 0.555 $ 2.270 $ 2.190
-22- 5 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT - DECEMBER 31, 1999 PORTFOLIO COMPOSITION ($000'S) - ------------------------------ EXHIBIT 1
BALANCE SHEET DATA # Properties # Beds/Units Balance (1) % Balance -------------------- ------------------- -------------------- ----------------- Real Property 165 12,804 $ 826,779 66% Loans Receivable & Other 73 7,675 401,019 32% Direct Investments -na- -na- 25,361 2% -------------------- ------------------- -------------------- ----------------- Total Investments 238 20,479 $ 1,253,159 100% INVESTMENT DATA # Properties # Beds/Units Investment (2) % Investment -------------------- ------------------- -------------------- ----------------- Assisted Living Facilities 182 12,683 $ 865,634 70% Nursing Homes 48 6,807 281,594 22% Specialty Care Facilities 6 695 83,807 7% Behavioral Care 2 294 9,188 1% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 238 20,479 $ 1,240,223 100% INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (2) % Investment -------------------- ------------------- -------------------- ----------------- Publicly Traded 83 5,536 $ 365,360 29% Key Private 109 10,403 693,471 56% Privately Held 46 4,540 181,392 15% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 238 20,479 $ 1,240,223 100%
NOTES: (1) TOTAL INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND DIRECT INVESTMENTS WHICH AMOUNTED TO $1,227,798,000 AND $25,361,000, RESPECTIVELY. (2) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,227,798,000 AND $12,425,000, RESPECTIVELY. REVENUE COMPOSITION ($000'S) - ---------------------------- EXHIBIT 2
Three Months Ended Twelve Months Ended December 31, 1999 December 31, 1999 ---------------------------------- ------------------------------ REVENUE BY INVESTMENT TYPE Real Property $ 21,654 64% $ 77,491 60% Loans Receivable & Other 11,595 34% 49,275 38% Direct Investments 562 2% 2,541 2% ------------------ --------------- ----------------- ------------- Total $ 33,811 100% $ 129,307 100% REVENUE BY FACILITY TYPE Assisted Living Facilities $ 22,807 68% $ 82,022 64% Nursing Homes 8,180 24% 35,323 27% Specialty Care Facilities 2,824 8% 11,962 9% Behavioral Care 0 0% 0 0% ------------------ --------------- ----------------- ------------- Total $ 33,811 100% $ 129,307 100% REVENUE BY OWNER TYPE Publicly Traded $ 11,532 34% $ 40,716 31% Key Private 17,957 53% 67,291 52% Privately Held 4,322 13% 21,300 17% ------------------ --------------- ----------------- ------------- Total $ 33,811 100% $ 129,307 100%
-23- 6 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 - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2000 $ 1,417 $ 1,268 $ 2,685 2% 2001 0 1,004 1,004 1% 2002 1,241 1,247 2,488 2% 2003 3,677 7,382 11,059 8% 2004 0 7,116 7,116 5% Thereafter 87,263 24,726 111,989 82% ------------------------ ------------------------ ----------------------- ------------------- Total $ 93,598 $ 42,743 $ 136,341 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED EXHIBIT 4 COMMITTED INVESTMENT BALANCES - ----------------------------- ($000'S EXCEPT INVESTMENT PER BED/UNIT)
Committed Balance Investment per # Properties # Beds/Units (1) Bed/Unit -------------------- ------------------- -------------------- ------------------ Assisted Living Facilities 182 12,683 $ 910,527 $ 71,791 Nursing Homes 48 6,807 290,057 42,612 Specialty Care Facilities 6 695 83,807 120,586 Behavioral Care 2 294 9,188 31,252 -------------------- ------------------- -------------------- ------------------ Total 238 20,479 $ 1,293,579 n/a
NOTES: (1) COMMITTED BALANCE INCLUDES REAL ESTATE INVESTMENTS, CREDIT ENHANCEMENTS AND UNFUNDED COMMITMENTS FOR WHICH INITIAL FUNDING HAD COMMENCED. EXHIBIT 5 OPERATOR CONCENTRATION ($000'S) - -------------------------------
CONCENTRATION BY INVESTMENT # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Summerville Healthcare 17 $ 171,139 14% Atria Senior Quarters 11 93,117 8% Alterra Healthcare 38 88,219 7% Life Care Centers of America, Inc. 13 87,337 7% Olympus Healthcare Group, Inc. 11 80,584 6% Remaining Operators 148 719,827 58% ----------------------- ---------------------- ----------------------- Total 238 $ 1,240,223 100% CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Summerville Healthcare 17 $ 11,248 9% Atria Senior Quarters 11 10,160 8% Olympus Healthcare Group, Inc. 11 9,218 7% Alterra Healthcare 38 8,628 7% Life Care Centers of America, Inc. 13 7,974 6% Remaining Operators 148 82,079 63% ----------------------- ---------------------- ----------------------- Total 238 $ 129,307 100%
NOTES: (1) YEAR ENDED DECEMBER 31, 1999 -24- 7 SELECTED FACILITY DATA - ---------------------- EXHIBIT 6
Coverage Data % Payor Mix ---------------------------------- ------------------------------------ Before After Census Private Medicare Mgt. Fees Mgt. Fees ------------------ ------------------------------------ ------------------ --------------- Nursing Homes 84% 24% 12% 1.89x 1.36x Assisted Living Facilities 92% 100% 0% 1.34x 1.16x Specialty Care Facilities 53% 22% 31% 3.27x 2.71x Behavioral Care 44% 12% 88% 3.39x 2.17x ------------------ --------------- Weighted Averages 1.85x 1.46x
NOTES: DATA AS OF SEPTEMBER 30, 1999 SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7 - -------------------------------------------------
Balance % Investment --------------- ----------------- Cross Defaulted $ 1,146,058 92% of gross real estate investments Cross Collateralized 384,594 96% of mortgage loans Bank Letters of Credit & Cash 44,790 4% of investment balance CURRENT CAPITALIZATION ($000'S) Balance % Balance LEVERAGE & PERFORMANCE RATIOS - ------------------------------- --------------- ----------------- ---------------------------------------- Borrowings Under Bank Lines $ 177,500 14% Debt/Total Book Cap 43% Long-Term Debt Obligations 361,342 29% Debt/Equity 76% Shareholders' Equity 706,996 57% Interest Coverage 3.42x 4th Qtr. --------------- ----------------- Total Book Capitalization $ 1,245,838 100% 3.66x L12M FFO Payout Ratio 82% 4th Qtr. 82% L12M
EXHIBIT 8 DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) - -----------------------------------------------
Year Lines of Credit (1) Senior Notes Secured Debt Total - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2000 $ 20,000 $ 35,000 $ 99 $ 55,099 2001 175,000 10,000 109 185,109 2002 0 20,000 121 20,121 2003 0 35,000 133 35,133 2004 0 40,000 64,186 94,186 2005 0 0 549 549 Thereafter 0 150,000 6,145 156,145 ------------------------ ------------------------ ----------------------- ------------------- Total $ 195,000 $ 290,000 $ 71,342 $ 556,342
NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY -25- 8 INVESTMENT ACTIVITY ($000'S) ---------------------------- EXHIBIT 9
Three Months Ended Twelve Months Ended December 31, 1999 December 31, 1999 --------------------------------- --------------------------------- FUNDING BY INVESTMENT TYPE Real Property $ 1,478 4% $ 81,008 29% Mortgage & Other Loans 2,829 8% 17,565 6% Construction Advances 28,498 83% 169,085 62% Direct Investments 1,565 5% 7,461 3% ----------------- --------------- ---------------- ---------------- Total $ 34,370 100% $ 275,119 100% REAL ESTATE INVESTMENTS Assisted Living Facilities $ 29,790 91% $ 239,216 89% Nursing Homes 3,015 9% 28,442 11% Behavioral Care 0 0% 0 0% Specialty Care Facilities 0 0% 0 0% ----------------- --------------- ---------------- ---------------- Total $ 32,805 100% $ 267,658 100%
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10 - ---------------------------------
CONCENTRATION BY REGION # Properties Investment % Investment ----------------------- ---------------------- ----------------------- South 140 $ 636,048 51% Northeast 38 284,848 23% West 32 182,423 15% Midwest 28 136,904 11% ----------------------- ---------------------- ----------------------- Total 238 $ 1,240,223 100% CONCENTRATION BY STATE # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Texas 47 $ 189,120 15% Florida 30 148,645 12% Massachusetts 14 99,130 8% North Carolina 18 87,690 7% Pennsylvania 14 82,781 7% Remaining States 115 632,857 51% ----------------------- ---------------------- ----------------------- Total 238 $ 1,240,223 100% REVENUE BY STATE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Texas 47 $ 21,364 17% Florida 30 12,507 10% Massachusetts 14 11,424 9% Pennsylvania 14 9,699 7% North Carolina 18 8,285 6% Remaining States 115 66,028 51% ----------------------- ---------------------- ----------------------- Total 238 $ 129,307 100%
NOTES: (1) YEAR ENDED DECEMBER 31, 1999 -26- 9 FUNDS FROM OPERATIONS COMPUTATION EXHIBIT 11 - ---------------------------------
Three Months Ended Twelve Months Ended December 31, 1999 December 31, 1999 ------------------------------- -------------------------- Net Income Available to Common Shareholders $ 14,623 $ 62,824 Add: Depreciation Expense 5,271 17,885 Loss on Sale of Assets 0 0 Asset Impairment Charges 0 0 Deduct: Gain on Sale of Assets 0 (703) Prepayment Fees 0 (1,565) ---------------------------- -- -------------------------- Funds From Operations (FFO) $ 19,894 $ 78,441 Average Common Shares Outstanding: Basic 28,216 28,128 Diluted 28,457 28,384 FFO Per Common Share: Basic $0.71 $2.79 Diluted $0.70 $2.76
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