-----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, Kiycw0yrN76gkmy5X8TtdOFzqNOJHnUeU5JdzaWXnNxH6AUBg7oLOU7f4TCdvoPW 3lbo473/ywg2EfHxorczmA== /in/edgar/work/0000950152-00-007498/0000950152-00-007498.txt : 20001102 0000950152-00-007498.hdr.sgml : 20001102 ACCESSION NUMBER: 0000950152-00-007498 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001031 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH CARE REIT INC /DE/ CENTRAL INDEX KEY: 0000766704 STANDARD INDUSTRIAL CLASSIFICATION: [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: 749877 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 l84522ae10-q.txt HEALTH CARE REIT, INC. FORM 10-Q 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 SEPTEMBER 30, 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 October 27, 2000. Class: Shares of Common Stock, $1.00 par value Outstanding 28,693,011 shares 2 HEALTH CARE REIT, INC. INDEX Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets - September 30, 2000 and December 31, 1999 3 Consolidated Statements of Income - Three and nine months ended September 30, 2000 and 1999 4 Consolidated Statements of Shareholders' Equity - Nine months ended September 30, 2000 and 1999 5 Consolidated Statements of Cash Flows - Nine months ended September 30, 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 11 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 12 EXHIBIT INDEX 13 -2- 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
SEPTEMBER 30 DECEMBER 31 2000 1999 (UNAUDITED) (NOTE) ----------- ----------- ASSETS (IN THOUSANDS) Real estate investments: Real property owned: Land $ 71,289 $ 73,234 Buildings & improvements 739,437 730,337 Construction in progress 23,744 58,954 ----------- ----------- 834,470 862,525 Less accumulated depreciation (46,820) (35,746) ----------- ----------- Total real property owned 787,650 826,779 Loans receivable Real property loans 314,570 401,019 Subdebt investments 27,551 19,511 ----------- ----------- 342,121 1,247,309 Less allowance for loan losses (6,337) (5,587) ----------- ----------- Net real estate investments 1,123,434 1,241,722 Other Assets: Equity investments 5,556 6,713 Cash and cash equivalents 3,516 2,129 Deferred loan expenses 3,065 3,311 Receivables and other assets 26,712 17,296 ----------- ----------- 38,849 29,449 ----------- ----------- TOTAL ASSETS $ 1,162,283 $ 1,271,171 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 118,850 $ 177,500 Senior unsecured notes 255,000 290,000 Secured debt 64,867 71,342 Accrued expenses and other liabilities 20,554 25,333 ----------- ----------- TOTAL LIABILITIES 459,271 564,175 Shareholders' equity: Preferred stock 150,000 150,000 Common stock 28,691 28,532 Capital in excess of par value 526,307 524,204 Undistributed net income 2,001 8,883 Accumulated other comprehensive income (loss) (715) 593 Unamortized restricted stock (3,272) (5,216) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 703,012 706,996 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,162,283 $ 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 NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 2000 1999 2000 1999 ------------------------- ------------------------- (IN THOUSANDS EXCEPT PER SHARE DATA) REVENUES: Rental income $ 22,266 $ 19,554 $ 65,984 $ 51,828 Interest income 9,695 12,419 31,408 36,502 Commitment fees and other income 1,390 1,280 4,657 4,898 Prepayment fees 0 907 57 1,565 -------- -------- -------- -------- Total revenues 33,351 34,160 102,106 94,793 EXPENSES: Interest expense 8,411 7,733 26,093 18,682 Loan expense 276 242 879 660 Provision for depreciation 5,985 4,608 16,558 12,614 Provision for losses 250 150 750 450 General and administrative expenses 1,823 1,881 5,654 5,427 -------- -------- -------- -------- Total expenses 16,745 14,614 49,934 37,833 -------- -------- -------- -------- Net income before gain on sale of properties 16,606 19,546 52,172 56,960 Gain on sale of properties 555 0 1,072 703 -------- -------- -------- -------- Net Income 17,161 19,546 53,244 57,663 Preferred stock dividends 3,376 3,351 10,114 9,462 -------- -------- -------- -------- Net Income Available to Common Shareholders $ 13,785 $ 16,195 $ 43,130 $ 48,201 ======== ======== ======== ======== Average number of common shares outstanding: Basic 28,507 28,196 28,460 28,141 Diluted 28,650 28,418 28,603 28,403 Net income per share: Basic $ 0.48 $ 0.57 $ 1.52 $ 1.71 Diluted 0.48 0.57 1.51 1.70 Dividends declared and paid per common share $ 0.585 $ 0.570 $ 1.750 $ 1.695
See notes to unaudited consolidated financial statements -4- 5 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
Nine months ended September 30, 2000 -------------------------------------------------------------------------------------------- Capital In Unamortized Accum. Other Preferred Common Excess of Restricted Undistributed Comprehensive In thousands 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 53,244 53,244 Unrealized losses on securities (591) (591) Foreign currency translation adjustment (717) (717) -------- Comprehensive income 51,936 Proceeds from issuance of common stock from dividend reinvestment and stock incentive plans, net of 159 2,103 1,085 3,347 forfeitures Restricted stock amortization 859 859 Cash dividends paid (60,126) (60,126) -------- ------- -------- -------- ---------- --------- -------- Balance at end of period $150,000 $28,691 $526,307 $(3,272) $ 2,001 $ (715) $703,012 ======== ======= ======== ======== ========= ========= ======== Nine months ended September 30, 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 57,663 57,663 Unrealized losses on securities (2,848) (2,848) -------- Foreign currency translation adjustment (259) (259) -------- Comprehensive income 54,556 Proceeds from issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures 173 3,820 172 4,165 Proceeds from sale of Preferred 75,000 (2,455) 72,545 Stock Restricted stock amortization 556 556 Cash dividends paid (57,455) (57,455) -------- ------- -------- ------- ---------- --------- --------- Balance at end of period $150,000 $28,413 $522,057 $(3,861) $ 10,642 $ 875 $708,126 ======== ======= ======== ======= ========== ========= =========
See notes to unaudited consolidated financial statements -5- 6 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
NINE MONTHS ENDED SEPTEMBER 30 2000 1999 ----------------------------- (IN THOUSANDS) OPERATING ACTIVITIES Net income $ 53,244 $ 57,663 Adjustments to reconcile net income to net cash Provision for depreciation 16,751 12,774 Provision for losses 750 450 Amortization 1,737 1,397 Loan and commitment fees earned (more) less than cash received (1,154) 1,001 Direct financing lease income less than cash received -- 60 Rental income in excess of cash received (4,396) (4,983) Interest and other income in excess of cash received (235) (196) Increase/(decrease) in accrued expenses and other liabilities (3,623) 2,581 Increase in receivables and other assets (4,554) (881) --------- --------- NET CASH PROVIDED FROM OPERATING ACTIVITIES 58,520 69,866 INVESTING ACTIVITIES Investment in real properties (37,833) (189,541) Investment in loans receivable (14,478) (47,940) Other investments, net (10,955) (4,754) Principal collected on loans 57,147 42,061 Proceeds from sale of properties 107,182 9,255 Other (659) (384) --------- --------- NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES 100,404 (191,303) FINANCING ACTIVITIES Net payments under line of credit arrangements (58,650) 6,550 Principal payments on long-term obligations (41,475) (64) Net proceeds from the issuance of Common Stock 3,347 3,993 Net proceeds from the issuance of Preferred Stock -- 72,545 Proceeds from issuance of Senior Notes -- 50,000 Proceeds from issuance of Secured Debt -- 54,000 Increase in deferred loan expense (633) (1,622) Cash distributions to shareholders (60,126) (57,455) --------- --------- NET CASH PROVIDED FROM (USED IN)FINANCING ACTIVITIES (157,537) 127,947 --------- --------- Increase in cash and cash equivalents 1,387 6,510 Cash and cash equivalents at beginning of period 2,129 1,269 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,516 $ 7,779 ========= ========= Supplemental Cash Flow Information -- Interest Paid $ 22,774 $ 22,541 ========= =========
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 have been included. Operating results for the nine months ended September 30, 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 nine months ended September 30, 2000, the Company invested $14,856,000 in real property, made construction advances of $27,833,000 and funded $11,012,000 of equity related investments. During the nine months ended September 30, 2000, the Company sold $107,182,000 of real property, received principal payments on real estate mortgages of $57,147,000 and had net advances on working capital loans of $9,674,000. With respect to the above-mentioned construction advances, funding for construction in progress in connection with thirteen properties owned directly by the Company totaled $23,114,000, and funding associated with six construction loans represented $4,719,000. During the nine months ended September 30, 2000, six of the construction properties in progress with an investment balance of $45,506,000 completed the construction phase of the Company's investment process and were converted to permanent operating leases. Also, during the nine months ended September 30, 2000, three of the construction loans with an investment balance of $10,690,000 completed the construction phase of the Company's investment process and were converted to investments in permanent mortgage loans. NOTE C - EQUITY INVESTMENTS Management determines the appropriate classification of an equity investment at the time of acquisition and reevaluates such designation as of each balance sheet date. Equity investments include direct investments and marketable securities. Direct investments are stated at historical cost. At September 30, 2000, direct investments included the preferred stock of one private corporation, and 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. Marketable securities are stated at market value with unrealized gains and losses reported in a separate component of shareholders' equity. At September 30, 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 D - 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 $11,945,000. NOTE E - 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 1, 2000. This dividend related to the period from October 1, 1999 through December 31, 1999. On May 22, 2000, the Company paid a dividend of $0.585 per share to shareholders of record on May 2, 2000. This dividend related to the period from January 1, 2000 to March 31, 2000. On August 21, 2000, the Company paid a dividend of $0.585 per share to shareholders of record on August 1, 2000. This dividend related to the period from April 1, 2000 to June 30, 2000. NOTE F - 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 Nine months ended September 30 September 30 --------------------------------- ----------------------------- 2000 1999 2000 1999 ------- ------- ------- ------- Numerator for basic and diluted earnings per share-income available to common shareholders $13,785 $16,195 $43,130 $48,201 ======= ======= ======= ======= Denominator for basic earnings per share - weighted average shares 28,507 28,196 28,460 28,141 Effect of dilutive securities: Employee stock options -- 24 -- 64 Nonvested restricted shares 143 198 143 198 ------- ------- ------- ------- Dilutive potential common shares 143 222 143 262 ------- ------- ------- ------- Denominator for diluted earnings per share - adjusted weighted average shares 28,650 28,418 28,603 28,403 ======= ======= ======= ======= Basic earnings per share $ 0.48 $ 0.57 $ 1.52 $ 1.71 Diluted earnings per share $ 0.48 $ 0.57 $ 1.51 $ 1.70
The diluted earnings per share calculation excludes the dilutive effect of 1,813,000 and 932,000 shares for the nine months ended September 30, 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. NOTE G - NEW ACCOUNTING STANDARD In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement No. 133 "Accounting for Derivative Investments and Hedging Activities," which is effective January 1, 2001. Under the Statement, all financial instruments meeting the definition of a derivative will be carried at fair value. The Company currently has no derivative instruments nor has engaged in any hedging activities. As a result, the Company does not anticipate this Statement having an effect on the Company at this time. -8- 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES At September 30, 2000, the Company's net real estate investments totaled $1,123,434,000, which included 154 assisted living facilities, 47 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 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 and loan prepayments 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. The Company has received $161,000,000 in proceeds from these divestitures through September 30, 2000. As of September 30, 2000, the Company had a total outstanding debt balance of $438,717,000 and shareholders' equity of $703,012,000 which represents a debt to equity ratio of .62 to 1.0, and a debt to total capitalization ratio of .38 to 1.0. As of September 30, 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 $25,000,000 bearing interest at the lender's prime rate expiring April 30, 2001. At September 30, 2000, under the Company's line of credit arrangements, available funding, subject to customary lending conditions, totaled $81,150,000. As of September 30, 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 were comprised of the following:
Three months ended Year to date through --------------------- Change -------------------- Change Sept. 30, Sept. 30, ------------------- Sept. 30, Sept. 30, ------------------ 2000 1999 $ % 2000 1999 $ % -------- -------- -------- ----- -------- -------- -------- ---- (000's) Rental income $ 22,266 $ 19,554 $ 2,712 14% $ 65,984 $ 51,828 $ 14,156 27% Interest income 9,695 12,419 (2,724) -22% 31,408 36,502 (5,094) -14% Commitment fees and other income 1,390 1,280 110 9% 4,657 4,898 (241) -5% Prepayment fees 0 907 (907) -100% 57 1,565 (1,508) -96% -------- -------- ------------------- -------- -------- ------------------ Total $ 33,351 $ 34,160 $ (809) -2% $102,106 $ 94,793 $ 7,313 8% ======== ======== =================== ======== ======== ==================
For the three months ended September 30, 2000 ("the three month period"), the Company generated increased rental income as a result of the completion of real property construction projects for which the Company began receiving rent and the purchase of properties previously financed by the Company. This offset a reduction in interest income due to the repayment of mortgage loans and the purchase of properties previously financed by the Company with mortgage loans. Revenue growth for the nine months ended September 30, 2000 ("the year-to-date period"), resulted primarily from the completion of real property construction projects for which the Company began receiving rent. Expenses were comprised of the following:
Three months ended Year to date through --------------------- Change -------------------- Change Sept. 30, Sept. 30, ------------------- Sept. 30, Sept. 30, ------------------ 2000 1999 $ % 2000 1999 $ % -------- -------- -------- ----- -------- -------- -------- ---- (000's) Interest expense $ 8,411 $ 7,733 $ 678 9% $ 26,093 $ 18,682 $ 7,411 40% Loan expense 276 242 34 14% 879 660 219 33% Provision for depreciation 5,985 4,608 1,377 30% 16,558 12,614 3,944 31% Provision for losses 250 150 100 67% 750 450 300 67% General and admin. expenses 1,823 1,881 (58) -3% 5,654 5,427 227 4% -------- -------- ------------------- ------- -------- ------------------ Total $ 16,745 $ 14,614 $ 2,131 15% $ 49,934 $ 37,833 $12,101 32% ======== ======== =================== ======== ======== ==================
The increase in interest expense for the 2000 periods were primarily due to higher average interest rates on the Company's lines of credit and secured debt and a reduction in the amount of capitalized interest offsetting interest expense. 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. Capitalized interest for the three month and year-to-date periods totaled $603,000, and $1,913,000, respectively, as compared with $2,777,000 and $7,054,000 for the same periods in 1999. The provision for depreciation increased over the comparable periods in 1999 as a result of additional investments in properties owned directly by the Company. General and administrative expenses for the three month and year-to-date periods were 5.38% and 5.48% of revenues as compared with 5.50% and 5.68% for the same periods in 1999. -10- 11 Other items:
Three months ended Year to date through --------------------- Change -------------------- Change Sept. 30, Sept. 30, ------------------- Sept. 30, Sept. 30, ------------------ 2000 1999 $ % 2000 1999 $ % -------- -------- -------- ----- -------- -------- -------- ---- (000's) Other items: Gain on sales of properties $ 555 $ 0 $ 555 100% $ 1,072 $ 703 $ 369 52% Preferred dividends 3,376 3,351 25 1% 10,114 9,462 652 7%
As a result of the various factors mentioned above, net income available to common shareholders for the three month and year-to-date periods was $13,785,000, or $0.48 per diluted share, and $43,130,000, or $1.51 per diluted share, respectively, as compared with $16,195,000, or $0.57 per diluted share, and $48,201,000, or $1.70 per diluted share for the comparable periods in 1999. STATEMENT REGARDING FORWARD LOOKING DISCLOSURE This report on Form 10-Q of the Company includes forward looking statements that reflect the Company's current view with respect to future events and financial performance. The words "believe", "expect", "anticipate" and similar expressions identify forward looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially form those described in the statements. These risks and uncertainties include (without limitation) the following: the effect of economic and market conditions and changes in interest rates, government regulations, including changes in Medicare and Medicaid payment levels, changes in the healthcare industry, deterioration of the operating results or financial condition, including bankruptcies, of the Company's tenants and borrowers, the ability of the Company to attract new operators for certain facilities, the amount of any additional investments, access to capital markets and changes in the ratings of the Company's debt securities. Forward looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events, or otherwise. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For information on the Company's exposure to various market risks, see the discussion in the Company's annual report on Form 10-K for the year ended December 31, 1999. PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION On July 10, 2000, the Company issued a press release in which it announced two key promotions. On July 18, 2000, the Company issued a press release in which it announced second quarter 2000 operating results. On July 19, 2000, the Company issued a press release in which it announced the appointment of Charles J. Herman, Jr. as Vice President of Operations. -11- 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule 99.1 Press release dated July 10, 2000 99.2 Press release dated July 18, 2000 99.3 Press release dated July 19, 2000 (b) Reports on Form 8-K None 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: October 31, 2000 By: /S/ GEORGE L. CHAPMAN ----------------------- --------------------------- George L. Chapman, Chairman, Chief Executive Officer and President Date: October 31, 2000 By: /S/ RAYMOND W. BRAUN ----------------------- ------------------------- Raymond W. Braun, Chief Financial Officer Date: October 31, 2000 By: /S/ MICHAEL A. CRABTREE ----------------------- --------------------------- Michael A. Crabtree, Chief Accounting Officer -12- 13 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 July 10, 2000 99.2 Press release dated July 18, 2000 99.3 Press release dated July 19, 2000 -13- EX-27 2 l84522aex27.txt EXHIBIT 27
5 1,000 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 3,065 5,556 26,712 6,337 0 0 834,470 46,820 1,162,283 0 438,717 0 150,000 28,691 524,321 1,162,283 0 102,106 0 0 17,437 750 26,093 43,130 0 43,130 0 0 0 43,130 1.52 1.51
EX-99.1 3 l84522aex99-1.txt EXHIBIT 99.1 1 Exhibit 99.1 F O R I M M E D I A T E R E L E A S E JULY 10, 2000 FOR MORE INFORMATION CONTACT: MIKE CRABTREE - (419) 247-2800 ERIN IBELE - (419) 247-2800 HEALTH CARE REIT, INC. ANNOUNCES TWO KEY PROMOTIONS Toledo, Ohio, July 10, 2000 - HEALTH CARE REIT, INC. (NYSE/HCN) today announced the promotions of Ray Braun to Executive Vice President and Mike Crabtree to Treasurer. Braun, age 42, has been an officer of the company since 1993, serving as the company's Chief Operating Officer since 1997. He has successfully managed the company's investment program and been instrumental in developing the company's state-of-the-art origination, underwriting and portfolio monitoring capabilities. Braun was a partner with the law firm of Shumaker, Loop & Kendrick, Toledo, Ohio, before joining Health Care REIT in 1993. With the promotion, Braun will devote more of his time and energies to the company's capital market's activities, serving in the additional capacity of Chief Financial Officer. Crabtree, age 43, assumes the additional role of Treasurer after serving as Controller for the past four years. He spearheaded the modernization of the company's accounting and financial systems and has worked with other members of the management team in integrating the financial, accounting and investment functions and processes. Prior to joining Health Care REIT, Crabtree served as Chief Financial Officer for Westhaven Services Co., a provider of pharmaceutical services to nursing homes. As CFO, Braun replaces Ed Lange who has resigned to pursue other interests. "Ed Lange has been an excellent CFO, contributing significantly to the growth and financial strength of our company," said George L. Chapman, Health Care REIT's Chief Executive Officer. "He has worked effectively with our management team developing our strategic plan and creating the infrastructure and systems to professionally manage every aspect of our business. While his talents will be missed, I am gratified to have Ray Braun, Mike Crabtree and the remainder of the management team to pick up where Ed left off." 2 Chapman cited Braun's success in managing the investment program as well as his active involvement in the execution of the company's capital plan as key reasons behind the promotion. "Ray has proven to be a true leader in both the operational and financial sides of the business," he added. "Mike Crabtree's appointment to the additional role of Treasurer will further strengthen our core competencies in the finance area and will assist Ray in executing our strategic and capital initiatives." Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes and assisted living facilities. At March 31, 2000, the company had investments in 235 health care facilities in 33 states and had total assets of approximately $1.3 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com. #### EX-99.2 4 l84522aex99-2.txt EXHIBIT 99.2 1 Exhibit 99.2 F O R I M M E D I A T E R E L E A S E JULY 18, 2000 FOR MORE INFORMATION CONTACT: RAY BRAUN - (419) 247-2800 MIKE CRABTREE - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS SECOND QUARTER OPERATING RESULTS Toledo, Ohio, July 18, 2000........HEALTH CARE REIT, INC. (NYSE/HCN) today announced operating results for the second quarter of 2000 and six months ending June 30, 2000. Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $19.4 million, or $0.68 per diluted share for the three months ended June 30, 2000, as compared with $19.7 million, or $0.69 per diluted share, for the same period in 1999. Revenues for the quarter increased 6 percent to $34.3 million from $32.5 million for the three months ended June 30, 1999. Net income available to common shareholders for the second quarter of 2000 totaled $14.6 million, or $0.51 per diluted share as compared with net income available to common shareholders of $15.8 million, or $0.56 per diluted share, for the same period in 1999. For the six months ended June 30, 2000, FFO totaled $39.3 million, or $1.38 per diluted share, as compared with $38.7 million, or $1.36 per diluted share, for the same period in 1999. Revenues for the six month period increased 13 percent to $69.3 million from $61.3 million a year ago. Net income available to common shareholders for the six months ended June 30, 2000, totaled $29.3 million, or $1.03 per diluted share, as compared with net income available to common shareholders of $32.0 million, or $1.13 per diluted share, for the same period in 1999. Separately, the Board of Directors voted to declare a dividend for the quarter ended June 30, 2000, of $0.585 per share as compared with $0.57 per share for the same period in 1999. The dividend represents the 117th consecutive dividend payment. The dividend will be payable August 21, 2000, to shareholders of record on August 1, 2000. Dividend payments to common shareholders during the six months ended June 30, 2000, totaled $33.3 million, or $1.165 per share, as compared with dividend payments of $31.8 million, or $1.125 per share for the same period in 1999. Correspondingly, the FFO payout ratio for the six month period for 2000 was 84 percent as compared with a FFO payout ratio of 83 percent for the six months ended June 30, 1999. During the first six months of 2000, the company completed asset sales totaling $138 million. The proceeds derived from the sales were used to meet debt maturities, satisfy unfunded commitment obligations, and pay down the company's line of credit arrangements. The asset sales contributed to a 5 percent reduction in total assets, which at June 30, 2000, totaled $1.17 billion. At June 30, 2000, the company had a total outstanding debt balance of $442 million, and shareholders' equity of $705 million, which represents a debt to total capitalization ratio of 0.39 to 1.0. During the first six months of 2000, the company's coverage ratio of EBITDA to interest was 3.4 to 1.0. 2 "The combination of asset sales and operating results were consistent with our expectations and stated objectives. We are on track to complete our $200 million asset sales program," commented George L. Chapman, chairman and chief executive officer. "The success of our asset sales has generated liquidity, enhancing the company's balance sheet and financial strength. Although the divestiture program has created a modest reduction in asset size and FFO results, this strategy has effectively preserved the company's fundamental credit qualities, ensuring the certainty of interest and dividend payments. We have elected to maintain the dividend at its current level, with increases to resume once capital becomes available at costs that permit accretive investment activity. We are well positioned to pursue future investment opportunities as our industry recovers." Interest expense for the three months ended June 30, 2000, was $8.6 million as compared with $6.7 million for the same period in 1999. During the six month period ended June 30, 2000, interest expense totaled $17.7 million as compared with $10.9 million for the same period in the prior year. The increase in the 2000 periods was primarily due to the issuance of $114 million of long-term debt during 1999 and higher average borrowings under the company's line of credit arrangements. The increase in the 2000 periods was 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 second quarter of 2000, totaled $1.0 million as compared with $2.2 million for the same period in 1999. During the six month period ended June 30, 2000, capitalized interest totaled $2.0 million as compared with $5.1 million for the same period in 1999. The decline in net income during the three and six month periods was related primarily to an increase in the company's provision for depreciation and the level of non-recurring revenue recognized in the comparable periods in 1999. For the three months ended June 30, 2000, the provision for depreciation totaled $5.3 million as compared with $4.5 million for the same period in 1999. The increased provision for depreciation was the result of additional investments in properties owned directly by the company. Included in net income for the second quarter of 1999 were non-recurring gains and prepayment fees of $550,000, as compared with $451,000 for the second quarter of 2000. For the six months ended June 30, 2000, the provision for depreciation totaled $10.6 million as compared with $8 million for the same period in 1999. The increased provision for depreciation was the result of additional investments in properties owned directly by the company. Included in net income for the first half of 1999 were non-recurring gains and prepayment fees of $1.4 million, as compared with $574,000 for the first half of 2000. 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 June 30, 2000, the company had investments in 215 health care facilities in 34 states and had total assets of approximately $1.2 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. ##### 3 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS)
JUNE 30 -------------------------------------- 2000 1999 ----------- ----------- ASSETS Real estate investments: Real property owned Land $ 72,374 $ 60,847 Buildings & improvements 740,290 636,149 Construction in progress 27,462 100,794 ----------- ----------- 840,126 797,790 Less accumulated depreciation (41,952) (27,505) ----------- ----------- Total real property owned 798,174 770,285 Loans receivable Real property loans 318,259 422,720 Subdebt investments 26,541 21,313 ----------- ----------- 344,800 444,033 Less allowance for losses on loans receivable (6,087) (5,287) ----------- ----------- 338,713 438,746 ----------- ----------- Net real estate investments 1,136,887 1,209,031 Other assets: Equity investments 5,790 7,845 Deferred loan expenses 3,273 3,575 Cash and cash equivalents 3,022 907 Receivables and other assets 20,354 14,155 ----------- ----------- 32,439 26,482 ----------- ----------- TOTAL ASSETS $ 1,169,326 $ 1,235,513 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 122,800 $ 156,600 Senior unsecured notes 255,000 290,000 Secured debt 64,882 57,386 Accrued expenses and other liabilities 21,932 24,175 ----------- ----------- Total liabilities $ 464,614 $ 528,161 Shareholders' equity: Preferred Stock 150,000 150,000 Common Stock 28,660 28,379 Capital in excess of par value 525,980 521,362 Undistributed net income 4,956 10,621 Accumulated other comprehensive income (413) 1,213 Unamortized restricted stock (4,471) (4,223) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY $ 704,712 $ 707,352 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,169,326 $ 1,235,513 =========== ===========
4 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ------------------------- ------------------------- 2000 1999 2000 1999 ------- ------- ------- ------- Revenues: Operating lease rents $22,087 $18,134 $43,718 $32,274 Interest income 10,192 12,142 21,713 23,937 Commitment fees and other income 1,591 1,718 3,266 3,764 Prepayment fees 57 475 57 658 Gain on sale of properties 394 75 517 703 ------- ------- ------- ------- Gross Revenues 34,321 32,544 69,271 61,336 Expenses: Interest expense $ 8,581 $ 6,680 $17,682 $10,949 Provision for depreciation 5,311 4,451 10,574 8,006 General and administrative 1,930 1,872 3,830 3,546 Loan expense 286 252 603 418 Provision for losses 250 150 500 300 ------- ------- ------- ------- Total Expenses 16,358 13,405 33,189 23,219 ------- ------- ------- ------- Net Income 17,963 19,139 36,082 38,117 Preferred stock dividends 3,376 3,352 6,738 6,111 ------- ------- ------- ------- Net Income Available to Common Shareholders $14,587 $15,787 $29,344 $32,006 ======= ======= ======= ======= Average number of common shares outstanding: Basic 28,384 28,145 28,350 28,111 Diluted 28,613 28,440 28,579 28,431 Net income per share: Basic $ 0.51 $ 0.56 $ 1.04 $ 1.14 Diluted 0.51 0.56 1.03 1.13 Funds from operations $19,447 $19,688 $39,344 $38,651 Funds from operations per share: Basic $ 0.69 $ 0.70 $ 1.39 $ 1.37 Diluted 0.68 0.69 1.38 1.36 Dividends per share $ 0.585 $ 0.565 $ 1.165 $ 1.125
5 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT - JUNE 30, 2000 PORTFOLIO COMPOSITION ($000'S)
EXHIBIT 1 BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance -------------------- ------------------- -------------------- ----------------- Real Property 156 12,448 $ 798,174 70% Loans Receivable 59 5,911 318,259 28% Subdebt Investments -na- -na- 26,541 2% -------------------- ------------------- -------------------- ----------------- Total Investments 215 18,359 $ 1,142,974 100% INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Assisted Living Facilities 159 10,638 $ 774,988 67% Nursing Homes 48 6,719 289,616 25% Specialty Care Facilities 6 708 83,370 7% Behavioral Care 2 294 7,425 1% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 215 18,359 $ 1,155,399 100% INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Publicly Traded 74 4,408 $ 271,402 24% Key Private 101 9,119 680,758 59% Privately Held 40 4,832 203,239 17% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 215 18,359 $ 1,155,399 100%
NOTE: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,142,974,000 AND $12,425,000, RESPECTIVELY. REVENUE COMPOSITION ($000'S)
EXHIBIT 2 Three Months Ended Six Months Ended June 30, 2000 June 30, 2000 ---------------------------------- ------------------------------ REVENUE BY INVESTMENT TYPE Real Property $ 23,506 68% $ 46,409 67% Loans Receivable & Other 10,211 30% 21,733 31% Subdebt Investments 604 2% 1,129 2% ------------------ --------------- ----------------- ------------- Total $ 34,321 100% $ 69,271 100% REVENUE BY FACILITY TYPE Assisted Living Facilities $ 23,346 68% $ 47,157 68% Nursing Homes 8,166 24% 16,519 24% Specialty Care Facilities 2,809 8% 5,595 8% Behavioral Care 0 0% 0 0% ------------------ --------------- ----------------- ------------- Total $ 34,321 100% $ 69,271 100% REVENUE BY OWNER TYPE Publicly Traded $ 8,133 24% $ 15,889 23% Key Private 20,727 60% 43,106 62% Privately Held 5,461 16% 10,276 15% ------------------ --------------- ----------------- ------------- Total $ 34,321 100% $ 69,271 100%
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 $ 2,241 $ 312 $ 2,553 2% 2001 0 1,812 1,812 1% 2002 1,738 6,119 7,857 7% 2003 2,770 1,488 4,258 3% 2004 410 5,069 5,479 4% Thereafter 84,950 23,120 108,070 83% ------------------------ ------------------------ ----------------------- ------------------- Total $ 92,109 $ 37,920 $ 130,029 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED COMMITTED INVESTMENT BALANCES
EXHIBIT 4 ($000'S EXCEPT INVESTMENT PER BED/UNIT) Committed Balance Investment per # Properties # Beds/Units (1) Bed/Unit -------------------- ------------------- -------------------- ------------------ Assisted Living Facilities 159 10,638 $ 795,575 $ 74,786 Nursing Homes 48 6,719 290,531 43,240 Specialty Care Facilities 6 708 83,370 117,754 Behavioral Care 2 294 7,426 25,257 -------------------- ------------------- -------------------- ------------------ Total 215 18,359 $ 1,176,902 -na-
NOTES: (1) COMMITTED BALANCE INCLUDES REAL ESTATE INVESTMENTS, CREDIT ENHANCEMENTS AND UNFUNDED COMMITMENTS FOR WHICH INITIAL FUNDING HAD COMMENCED. OPERATOR CONCENTRATION ($000'S)
EXHIBIT 5 CONCENTRATION BY INVESTMENT # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Summerville Healthcare 12 $ 144,501 12% Atria Senior Quarters 11 92,320 8% Life Care Centers of America, Inc. 13 87,773 8% Alterra Healthcare 38 87,177 8% Merrill Gardens 15 67,455 6% Remaining Operators 126 676,173 58% ----------------------- ---------------------- ----------------------- Total 215 $ 1,155,399 100% CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Summerville Healthcare 12 $ 7,711 11% Atria Senior Quarters 11 5,391 8% Alterra Healthcare 38 5,169 8% Olympus Healthcare Group, Inc. 3 4,337 5% Life Care Centers of America, Inc. 13 4,005 6% Remaining Operators 138 42,658 62% ----------------------- ---------------------- ----------------------- Total 215 $ 69,271 100%
NOTES: (1) SIX MONTHS ENDED JUNE 30, 2000 7 SELECTED FACILITY DATA
EXHIBIT 6 Coverage Data % Payor Mix ---------------------------------- ------------------------------------ Before After Census Private Medicare Mgt. Fees Mgt. Fees ------------------ ------------------------------------ ------------------ --------------- Nursing Homes 83% 25% 15% 1.90x 1.39x Assisted Living Facilities 91% 100% 0% 1.38x 1.19x Specialty Care Facilities 65% 21% 30% 3.22x 2.62x Behavioral Care 51% 33% 67% 3.39x 2.01x ------------------ --------------- Weighted 1.81x 1.45x Averages
NOTES: DATA AS OF MARCH 31, 2000
SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7 - ------------------------------------------------- Balance % Investment --------------- ----------------- Cross Defaulted $ 1,032,348 91% of gross real estate investments Cross Collateralized 300,423 94% of mortgage loans Bank Letters of Credit & Cash 34,539 3% of investment balance CURRENT CAPITALIZATION ($000'S) Balance % Balance LEVERAGE & PERFORMANCE RATIOS - ------------------------------- --------------- ----------------- ---------------------------------------- Borrowings Under Bank Lines $ 122,800 11% Debt/Total Book Cap 39% Long-Term Debt Obligations 319,882 28% Debt/Equity 63% Shareholders' Equity 704,712 61% Interest Coverage 3.5x 2nd Qtr. --------------- ----------------- Total Book Capitalization $ 1,147,394 100% 3.5x L12M FFO Payout Ratio 86% 2nd Qtr. 83% L12M
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S)
EXHIBIT 8 Year Lines of Credit (1) Senior Notes Secured Debt Total - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2000 $ 0 $ 0 $ 31 $ 31 2001 200,000 10,000 67 210,067 2002 0 20,000 75 20,075 2003 0 35,000 84 35,084 2004 0 40,000 64,133 104,133 2005 0 0 492 492 2006 0 0 0 0 Thereafter 0 150,000 0 150,000 ------------------------ ----------------------- ----------------------- ------------------- Total $ 200,000 $ 255,000 $ 64,882 $ 519,882
NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY 8 INVESTMENT ACTIVITY ($000'S)
EXHIBIT 9 Three Months Ended Six Months Ended June 30, 2000 June 30, 2000 --------------------------------- --------------------------------- FUNDING BY INVESTMENT TYPE Real Property $ 11,703 48% $ 11,886 28% Mortgage & Other Loans 0 0% 0 0% Construction Advances 8,452 35% 20,535 48% Direct Investments 4,094 17% 9,941 24% ----------------- --------------- ---------------- ---------------- Total $ 24,248 100% $ 42,362 100% REAL ESTATE INVESTMENTS Assisted Living Facilities $ 18,551 77% $ 35,626 84% Nursing Homes 5,697 23% 6,736 16% Behavioral Care 0 0% 0 0% Specialty Care Facilities 0 0% 0 0% ----------------- --------------- ---------------- ---------------- Total $ 24,248 100% $ 42,362 100%
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10 - --------------------------------- CONCENTRATION BY REGION # Properties Investment % Investment ----------------------- ---------------------- ----------------------- South 126 $ 580,420 50% Northeast 31 250,779 22% West 32 195,740 17% Midwest 26 128,460 11% ----------------------- ---------------------- ----------------------- Total 215 $ 1,155,399 100% CONCENTRATION BY STATE # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Texas 36 $ 143,240 13% Florida 29 142,839 13% Massachusetts 14 107,025 9% North Carolina 16 82,597 7% New York 10 64,791 6% Remaining States 110 614,907 52% ----------------------- ---------------------- ----------------------- Total 215 $ 1,155,399 100% REVENUE BY STATE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Texas 36 $ 10,534 15% Florida 29 7,001 10% Massachusetts 14 6,138 9% North Carolina 16 4,673 7% California 10 4,446 6% Remaining States 110 36,479 53% ----------------------- ---------------------- ----------------------- Total 215 $ 69,271 100%
NOTES: (1) SIX MONTHS ENDED JUNE 30, 2000 9
FUNDS FROM OPERATIONS COMPUTATION ($000'S) EXHIBIT 11 - ------------------------------------------ Three Months Ended Six Months Ended June 30, 2000 June 30, 2000 ------------------------------- -------------------------- Net Income Available to Common Shareholders $ 14,588 $ 29,345 Add: Depreciation Expense 5,311 10,574 Loss on Sale of Assets 0 0 Asset Impairment Charges 0 0 Deduct: Gain on Sale of Assets (394) (517) Prepayment Fees (57) (57) ---------------------------- -- -------------------------- Funds From Operations (FFO) $ 19,448 $ 39,345 Average Common Shares Outstanding: Basic 28,384 28,350 Diluted 28,613 28,579 FFO Per Common Share: Basic $ 0.69 $ 1.39 Diluted $ 0.68 $ 1.38
EX-99.3 5 l84522aex99-3.txt EXHIBIT 99.3 1 Exhibit 99.3 F O R I M M E D I A T E R E L E A S E JULY 19, 2000 FOR MORE INFORMATION CONTACT: MIKE CRABTREE - (419) 247-2800 ERIN IBELE - (419) 247-2800 HEALTH CARE REIT, INC. ADDS VICE PRESIDENT - OPERATIONS Toledo, Ohio, July 19, 2000 - HEALTH CARE REIT, INC. (NYSE/HCN) today announced the appointment of Charles J. Herman, Jr., to the newly created position of vice president - operations. In making the announcement, George L. Chapman, Health Care REIT's chief executive officer said, "We are truly pleased that someone of Chuck's experience and abilities is joining Health Care REIT's management team. Chuck's knowledge of the health care and senior housing industry will provide invaluable support to our position as a leader in the sector. His decision to join our company is an important affirmation of Health Care REIT's strategy and performance." Herman, 35, has a broad range of health care and senior housing experience. Since entering the industry in 1987, he has been a visible and influential figure in the development of the senior housing sector, having served on the Board of Directors of the Assisted Living Federation of America (ALFA) and America Senior Housing Association (ASHA). Herman and his company have performed a large number of valuation and consulting assignments for a broad array of health care operators, financial services and banking organizations and governmental entities and agencies. Prior to joining the company, Herman has held various positions in the health care and senior housing industry in which he was primarily responsible for operations, staffing, information systems, research activities and day-to-day management decisions. Most recently, Herman was a founding member and president of Herman Turner Group, LLC, a nationally recognized health care consulting firm. Herman received his undergraduate degree in finance from Rider University and his MBA from the Rider School of Business. 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 and assisted living facilities. At June 30, 2000, the company had investments in 215 health care facilities in 34 states and had total assets of approximately $1.2 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. #### -----END PRIVACY-ENHANCED MESSAGE-----