-----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, L1aJxBIar58uYL/tWWHoKelPFv9F8KTVIkej0VE5MpNfyCRQV2r4JHvu0xUnINa1 vP2kgi/722YAzSK4dYV62A== 0000950152-01-501908.txt : 20010515 0000950152-01-501908.hdr.sgml : 20010515 ACCESSION NUMBER: 0000950152-01-501908 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010514 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: 1634114 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 l88293ae10-q.txt HEALTH CARE REIT 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION DRAFT 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, 2001 ------------------------------------ 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 10, 2001. Class: Shares of Common Stock, $1.00 par value Outstanding 28,879,061 shares 2 HEALTH CARE REIT, INC. INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets - March 31, 2001 and December 31, 2000 3 Consolidated Statements of Income - Three months ended March 31, 2001 and 2000 4 Consolidated Statements of Shareholders' Equity - Three months ended March 31, 2001 and 2000 5 Consolidated Statements of Cash Flows - Three months ended March 31, 2001 and 2000 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
MARCH 31 DECEMBER 31 2001 2000 (UNAUDITED) (NOTE) ASSETS (IN THOUSANDS) Real estate investments: Real property owned: Land $ 77,109 $ 74,319 Buildings & improvements 792,745 770,660 Construction in progress 7,641 11,976 ------------------ ----------------- 877,495 856,955 Less accumulated depreciation (59,754) (52,968) ------------------ ------------------ Total real property owned 817,741 803,987 Loans receivable Real property loans 268,377 301,321 Subdebt investments 22,225 21,972 ------------------ ----------------- 1,108,343 1,127,280 Less allowance for loan losses (6,111) (5,861) ------------------ ------------------ Net real estate investments 1,102,232 1,121,419 Other Assets: Equity investments 5,501 5,450 Cash and cash equivalents 2,537 2,844 Deferred loan expenses 3,915 2,939 Receivables and other assets 27,096 24,252 ------------------ ----------------- 39,049 35,485 ------------------ ----------------- TOTAL ASSETS $ 1,141,281 $ 1,156,904 ================== ================= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 110,300 $ 119,900 Senior unsecured notes 255,000 255,000 Secured debt 64,835 64,852 Accrued expenses and other liabilities 16,311 18,545 ------------------ ----------------- TOTAL LIABILITIES 446,446 458,297 Shareholders' equity: Preferred stock 150,000 150,000 Common stock 28,881 28,806 Capital in excess of par value 529,417 528,138 Undistributed/(overdistributed) net income (8,416) (3,388) Accumulated other comprehensive income (loss) (994) (744) Unamortized restricted stock (4,053) (4,205) ------------------ ------------------ TOTAL SHAREHOLDERS' EQUITY 694,835 698,607 ------------------ ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,141,281 $ 1,156,904 ================== =================
NOTE: The consolidated balance sheet at December 31, 2000 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 2001 2000 ----------------------- --------------------- (IN THOUSANDS EXCEPT PER SHARE DATA) REVENUES: Rental income $ 22,608 $ 21,630 Interest income 8,945 11,521 Commitment fees and other income 890 1,676 Prepayment fees 134 - ------------------ ----------------- Total revenue 32,577 34,827 EXPENSES: Interest expense 8,112 9,101 Loan expense 375 317 Provision for depreciation 6,786 5,263 Provision for losses 250 250 General and administrative expenses 1,851 1,900 ------------------ ------------------ Total expenses 17,374 16,831 ------------------ ------------------ Net income before gains on sale of properties 15,203 17,996 Gains on sale of properties - 123 ------------------ ------------------ Net income 15,203 18,119 Preferred stock dividends 3,376 3,362 ----------------- ----------------- Net Income Available to Common Shareholders $ 11,827 $ 14,757 ================== ================== Average number of shares outstanding: Basic 28,617 28,315 Diluted 28,871 28,546 Net income per share: Basic $ 0.41 $ 0.52 Diluted 0.41 0.52 Dividends declared and paid per common share $ 0.585 $ 0.580
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, 2001 -------------------------------------------------------------------------------------------- Capital In Unamortized Accum. Other Preferred Common Excess of Restricted Undistributed Comprehensive In thousands Stock Stock Par Value Stock Net Income Income/Loss Total -------------------------------------------------------------------------------------------- Balance at beginning of period $150,000 28,806 $528,138 $(4,205) $ (3,388) $ (744) $698,607 Comprehensive income: Net income 15,203 15,203 Unrealized losses on securities (58) (58) Foreign currency translation adjustment (192) (192) -------- Comprehensive income 14,953 Proceeds from issuance of common stock from dividend reinvestment and 75 1,279 (141) 1,213 stock incentive plans, net of forfeitures Restricted stock amortization 293 293 Cash dividends paid (20,231) (20,231) ------- ------- ------- -------- ---------- --------- ---------- Balance at end of period $150,000 $28,881 $529,417 $(4,053) $ (8,416) $ (994) $694,835 ======== ======= ======== ======== ========== ========= ======== 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 18,119 18,118 Unrealized losses on securities (318) (318) Foreign currency translation adjustment (27) (27) -------- Comprehensive income 17,774 Proceeds from issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures 45 574 118 737 Restricted stock amortization 317 317 Cash dividends paid (19,915) (19,915) ------- ------- --------- -------- --------- --------- -------- Balance at end of period $150,000 $28,577 $524,778 $(4,781) $ 7,087 $ 248 $705,909 ======== ======= ========= ======== ========== ========= ========
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 2001 2000 ------------------------------ (IN THOUSANDS) OPERATING ACTIVITIES Net income $ 15,203 $ 18,119 Adjustments to reconcile net income to net cash Provision for depreciation 6,845 5,484 Provision for losses 250 250 Amortization 668 633 Loan and commitment fees earned (more) less than cash received (559) (1,154) Rental income in excess of cash received (2,154) (1,697) Interest and other income in excess of cash received (84) (75) Increase/(decrease) in accrued expenses and other liabilities (1,676) (2,440) Increase in receivables and other assets (669) (2,060) ---------- ---------- NET CASH PROVIDED FROM OPERATING ACTIVITIES 17,824 17,060 INVESTING ACTIVITIES Investment in real properties (6,857) (10,188) Investment in loans receivable (5,719) (3,799) Other investments, net (228) (5,754) Principal collected on loans 24,738 630 Proceeds from sale of properties - 26,248 Other (79) (679) ------------ ------------ NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES 11,855 6,458 FINANCING ACTIVITIES Net payments under line of credit arrangements (9,600) (4,600) Principal payments on long-term obligations (17) (24) Net proceeds from the issuance of Common Stock 1,213 737 Net proceeds from the issuance of Preferred Stock - - Proceeds from issuance of Senior Notes - - Proceeds from issuance of Secured Debt - - Increase in deferred loan expense (1,351) (466) Cash distributions to shareholders (20,231) (19,914) ------------ ------------ NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES (29,986) (24,267) ------------ ----------- Decrease in cash and cash equivalents (307) (749) Cash and cash equivalents at beginning of period 2,844 2,129 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,537 $ 1,380 ============ =========== Supplemental Cash Flow Information -- Interest Paid $ 9,770 $ 11,522 ============ ===========
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 three months ended March 31, 2001, are not necessarily an indication of the results that may be expected for the year ending December 31, 2001. 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, 2000. NOTE B - REAL ESTATE INVESTMENTS During the three months ended March 31, 2001, the Company invested $2,164,000 in real property, made construction advances of $6,777,000 and funded $273,000 of equity related investments. During the three months ended March 31, 2001, the Company received principal payments on real estate mortgages of $24,738,000. With respect to the above-mentioned construction advances, funding for construction in progress in connection with four properties owned directly by the Company totaled $4,694,000, and funding associated with two construction loans represented $2,083,000. During the three months ended March 31, 2001, one of the construction properties in progress with an investment balance of $9,027,000 completed the construction phase of the Company's investment process and was converted to permanent operating leases. 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. At March 31, 2001, equity investments include the common stock of a corporation, valued at historical cost, 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. The ownership interest is accounted for under the equity method. -7- 8 NOTE D - CONTINGENT LIABILITIES As disclosed in the financial statements for the year ended December 31, 2000, the Company was contingently liable for certain obligations amounting to $11,945,000. NOTE E - DISTRIBUTIONS PAID TO COMMON SHAREHOLDERS On February 20, 2001, the Company paid a dividend of $0.585 per share to shareholders of record on January 31, 2001. This dividend related to the period from October 1, 2000 through December 31, 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 March 31 ----------------------------- 2001 2000 --------- ------- Numerator for basic and diluted earnings per share-income available to common shareholders $ 11,827 $ 14,757 ========= ========= Denominator for basic earnings per share - weighted average shares 28,617 28,315 Effect of dilutive securities: Employee stock options 29 - Nonvested restricted shares 225 231 --------- ---------- Dilutive potential common shares 254 231 --------- ---------- Denominator for diluted earnings per share - adjusted weighted average shares 28,871 28,546 ========= ========== Basic earnings per share $ 0.41 $ 0.52 Diluted earnings per share $ 0.41 $ 0.52
The diluted earnings per share calculation excludes the dilutive effect of 1,350,000 and 1,813,000 shares for the three months ended March 31, 2001 and 2000, 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, 2001, the Company's net real estate investments totaled $1,102,232,000 which included 148 assisted living facilities, 43 nursing facilities and ten specialty 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 from which the Company has received $195,000,000 in proceeds through March 31, 2001. The Company believes the limited asset sales and loan prepayments have strengthened the Company's portfolio and generated liquidity, enhancing the Company's balance sheet. The completion of this program should position the Company for new investment and growth opportunities in the future. As of March 31, 2001, the Company had a total outstanding debt balance of $430,135,000 and shareholders' equity of $694,835,000 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 March 31, 2001, the Company had an unsecured revolving line of credit expiring March 31, 2003 in the amount of $150,000,000 bearing interest at the lender's prime rate or LIBOR plus 1.5%. 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, 2002. At March 31, 2001, under the Company's line of credit arrangements, available funding, subject to customary lending conditions, totaled $64,700,000. As of March 31, 2001, the Company had 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 Change ------------------------------------- ---------------- March 31, 2001 March 31, 2000 $ % -------------- -------------- ---------------- (000's) Rental income $ 22,608 $ 21,630 $ 978 5% Interest income 8,945 11,521 (2,576) -22% Commitment fees and other income 890 1,676 (786) -47% Prepayment fees 134 - 134 - ------------ -------------- ---------------- Total $ 32,577 $ 34,827 $(2,250) -6% ============ ============== ================
For the three months ended March 31, 2001, 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. Commitment fees and other income decreased as a result of the completion of construction projects and curtailment of investing activity. Expenses were comprised of the following:
Three months ended Change ------------------------------------- ---------------------- March 31, 2001 March 31, 2000 $ % -------------- -------------- ---------------------- (000's) Interest expense $ 8,112 $ 9,101 $ (989) -11% Loan expense 375 317 58 18% Provision for depreciation 6,786 5,263 1,523 29% Provision for losses 250 250 - - General and admin. expenses 1,851 1,900 (49) -3% ------------ -------------- ---------------- Total $ 17,374 $ 16,831 $ 543 3% ============ ============== ================
The decrease in interest expense was primarily due to lower average borrowings on the Company's lines of credit and senior notes partially offset by 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 period ended March 31, 2001 totaled $334,000 as compared with $1,220,000 for the same period in 2000. The provision for depreciation increased over the comparable periods in 2000 primarily as a result of additional investments in properties owned directly by the Company. General and administrative expenses for the three-month period was 5.68% of revenues as compared with 5.44% for the same period in 2000. -10- 11 Other items:
Three months ended Change ----------------------------------- ---------------------- March 31, 2001 March 31, 2000 $ % -------------- -------------- ---------------------- (000's) Other items: Gain on sales of properties $ - $ 123 $ (123) -100% Preferred dividends 3,376 3,362 14 -
As a result of the various factors mentioned above, net income available to common shareholders for the three-month period was $11,827,000, or $0.41 per diluted share, as compared with $14,757,000, or $0.52 per diluted share for the comparable period in 2000. 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 from 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, 2000. PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION ----------------- On January 16, 2001, the Company declared fourth quarter dividend and conference call date. On January 29, 2001, the Company issued a press release announcing the extension of unsecured Bank Credit Facility. On January 30, 2001, the Company issued a press release reporting on the closing of Summerville transaction. On February 1, 2001, the Company issued a press release reporting its 2000 operating results. On February 27, 2001, the Company issued a press release reporting on the status of its portfolio with Alterra Healthcare Corporation. On April 10, 2001, the Company issued a press release announcing the schedule of its first quarter conference call. On April 17, 2001, the Company issued a press release declaring its regular dividend. On May 3, 2001, the Company issued a press release reporting on the first quarter results. -11- 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits 99.1 Press release dated January 16, 2001 99.2 Press release dated January 29, 2001 99.3 Press release dated January 30, 2001 99.4 Press release dated February 1, 2001 99.5 Press release dated February 27, 2001 99.6 Press release dated April 10, 2001 99.7 Press release dated April 17, 2001 99.8 Press release dated May 3, 2001 (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: May 14, 2001 By: /s/ GEORGE L. CHAPMAN -------------------- ------------------------------------- George L. Chapman, Chairman, Chief Executive Officer and President Date: May 14, 2001 By: /s/ RAYMOND W. BRAUN -------------------- ------------------------------------- Raymond W. Braun, Chief Financial Officer Date: May 14, 2001 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 -------------- ------------------- 99.1 Press release dated January 16, 2001 99.2 Press release dated January 29, 2001 99.3 Press release dated January 30, 2001 99.4 Press release dated February 1, 2001 99.5 Press release dated February 27, 2001 99.6 Press release dated April 10, 2001 99.7 Press release dated April 17, 2001 99.8 Press release dated May 3, 2001 -13- EX-99.1 2 l88293aex99-1.txt EXHIBIT 99.1 1 Exhibit 99.1 FOR IMMEDIATE RELEASE January 16, 2001 For more information contact: Ray Braun (419) 247-2800 Mike Crabtree (419) 247-2800 HEALTH CARE REIT, INC. DECLARES REGULAR DIVIDEND; FOURTH-QUARTER CONFERENCE CALL SET FOR FEB. 2, 2001 Toledo, Ohio, January 16, 2001...HEALTH CARE REIT, INC. (NYSE/HCN) announced today that its Board of Directors voted to declare a dividend for the quarter ended December 31, 2000, of $0.585 per share as compared with $0.58 per share for the same period in 1999. The dividend represents the 119th consecutive dividend payment. The dividend will be payable February 20, 2001, to shareholders of record on January 31, 2001. The company also announced it would release its 2000 fourth-quarter and year-end earnings results on Thursday, February 1, after New York Stock Exchange trading ends. At 12:00 p.m. Eastern Time on February 2, the company will hold a conference call to discuss its financial and operating performance for the recent period as well as provide its outlook for 2001. The conference call will be accessible by telephone and through the Internet. Telephone access is available by dialing 800-982-3654 or 703-871-3021. Callers to this number will be able to listen to the company's business update. For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the live call on February 2. To access the rebroadcast, dial 888-266-2086 or 703-925-2435. The conference ID number is 4909796. To participate on the webcast, log on to www.hcreit.com or www.streetfusion.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes and assisted living facilities. At September 30, 2000, the company had investments in 209 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. ##### -14- EX-99.2 3 l88293aex99-2.txt EXHIBIT 99.2 1 Exhibit 99.2 FOR IMMEDIATE RELEASE January 29, 2001 For more information contact: Raymond Braun - (419) 247-2800 Mike Crabtree - (419) 247-2800 HEALTH CARE REIT, INC. ANNOUNCES EXTENSION OF UNSECURED BANK CREDIT FACILITY Toledo, Ohio, January 29, 2001......HEALTH CARE REIT, INC. (NYSE/HCN) announced today the extension of its unsecured revolving line of credit facility led by Key Corporate Capital Inc. and Fleet National Bank. The extension is through March 31, 2003. The total commitment was reduced from $175 million to $150 million to decrease fees and expenses. The rate spread applicable under the credit facility was increased to 150 basis points from 100 basis points with a facility fee of 37.5 basis points and an additional 12.5 basis points utilization fee if borrowings exceed 50 percent of the total commitment. "We are pleased to complete the extension of our line of credit," commented George L. Chapman, chairman and CEO. "Our long standing relationship with these lenders, as well as the company's strong credit profile, provided for a successful extension in a challenging market. We believe that the extension, together with the execution of our asset disposition program, confirms Health Care REIT's solid liquidity position." 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 September 30, 2000, the company had investments in 209 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. This document 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. ##### -15- EX-99.3 4 l88293aex99-3.txt EXHIBIT 99.3 1 Exhibit 99.3 FOR IMMEDIATE RELEASE January 30, 2001 For more information contact: Raymond Braun - (419) 247-2800 Mike Crabtree - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS ON CLOSING OF SUMMERVILLE TRANSACTION Toledo, Ohio, January 30, 2001..... HEALTH CARE REIT, INC. (NYSE/HCN) reported today on the completion of its restructuring agreement with Summerville Assisted Living, Inc. ("Summerville") and the re-leasing of the Summerville facilities. As previously disclosed, the company reached an agreement with Summerville for Health Care REIT to restructure its investment in the large assisted living operator. The restructuring results from Summerville's decision to realign its portfolio of communities into specific targeted markets in order to leverage operating efficiencies and maximize value. Health Care REIT's facilities are located outside Summerville's targeted markets. Summerville also agreed to substantially repay Health Care REIT's subdebt and permit it to re-lease 10 of its 11 facilities to new operators. "We are pleased with the Summerville transaction, which provides important benefits to both parties," commented George L. Chapman, chairman and CEO. "The reorganized Summerville is well positioned to complete the stabilization of its facilities and meet its goals. Health Care REIT has the benefit of re-leasing the 10 facilities with five experienced, regional operators. It also furthers our historical commitment to operator diversification." SUMMERVILLE TRANSACTION - ----------------------- Summerville gave consideration of approximately $11.41 million to satisfy all of its obligations to the company. This amount included $6.1 million cash, 2.5 percent of the common stock of the reorganized Summerville, which the company has valued at $1.6 million, and a secured note of $3.71 million. As a result of this transaction, the company will charge $726,000 against its allowance for loan losses in the fourth quarter of 2000. PREFERRED STOCK INVESTMENT - -------------------------- The company owned non-yielding preferred stock of Summerville with a basis of $2.0 million. As part of Summerville's recapitalization, this investment was substantially diluted. Accordingly, based upon an internal valuation, Health Care REIT elected to write-off its preferred stock investment in the fourth quarter of 2000. FFO EFFECT - ---------- Although the preferred stock write-off is non-cash and non-recurring, the company has determined, in accordance with the NAREIT definition, to reduce funds from operations ("FFO") by the loss on investment, resulting in a reduction in fourth quarter 2000 FFO of $0.07 per share. Excluding the loss -16- 2 PRESS RELEASE SUMMERVILLE TRANSACTION - -------------------------------------------------------------------------------- on investment, FFO is expected to be $0.66 per share. For 2001, it is anticipated that FFO will modestly decrease by $0.01 to $0.0125 per share as a result of the restructuring. RE-LEASING OF FACILITIES - ------------------------ The company had the following operating lease investments with Summerville, which are now operated by the companies specified in the following table:
- ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- FACILITY CITY STATE LEASE AMOUNT NEW OPERATOR - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Dunwoody Atlanta GA $16,552,340 Merrill Gardens LLC - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Brick Brick NJ 10,473,504 Gordon Health Ventures - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Pineville Charlotte NC 11,047,412 Southern Assisted Living, Inc. - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Durham Durham NC 11,615,286 Southern Assisted Living, Inc. - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Ellicott City Ellicott City MD 14,317,942 Morningside Developments - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Gardnerville Gardnerville NV 13,357,027 Merrill Gardens LLC - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Kenner Kenner LA 10,966,382 Summerville - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Sarah Pierce Litchfield CT 8,864,156 Gordon Health Ventures - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Merrillville Merrillville IN 7,377,368 Balanced Care Corporation - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Naples Naples FL 18,195,736 Merrill Gardens LLC - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- Roswell Roswell GA 10,256,844 Merrill Gardens LLC - ---------------------- ------------------- ---------- ---------------------- ---------------------------------------------- TOTALS: $133,023,997 - ---------------------- ------------------- ---------- ---------------------- ----------------------------------------------
The lease amounts, lease rates and annual escalators are substantially the same as the leases to Summerville. FACILITIES UPDATE - ----------------- In its quarterly earnings calls, the company will provide updated census and other operating data with respect to these facilities. 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 September 30, 2000, the company had investments in 209 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. This document 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. ##### -17- EX-99.4 5 l88293aex99-4.txt EXHIBIT 99.4 1 FOR IMMEDIATE RELEASE Exhibit 99.4 FEBRUARY 1, 2001 FOR MORE INFORMATION CONTACT: RAY BRAUN - (419) 247-2800 MIKE CRABTREE - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS 2000 OPERATING RESULTS Toledo, Ohio, February 1, 2001........HEALTH CARE REIT, INC. (NYSE/HCN) today announced operating results for its fourth quarter and year ended December 31, 2000. The company's strategies to focus on stabilization of the assisted living portfolio and manage liquidity are successfully being implemented. "Our operating results for the quarter are right on target as a result of our asset disposition program, which is on track to complete $200 million in sales or refinancings," commented George L. Chapman, chairman and chief executive officer. "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. Our company's low leverage of 39 percent debt to total capitalization and EBITDA coverage at 3.5 times strongly support the interest and dividend payments. We intend to maintain the dividend at its current level, with increases to resume once capital becomes available at costs that permit accretive investment activity."
SUMMARY OF FOURTH QUARTER RESULTS - --------------------------------- (In thousands, except per share numbers) - --------------------------------------------------------- ---------------------------- --------------------------------- THREE MONTHS ENDED THREE MONTHS ENDED DEC. 31, 2000 DEC. 31, 1999 - --------------------------------------------------------- ---------------------------- --------------------------------- Revenues $33,775 $33,812 - --------------------------------------------------------- ---------------------------- --------------------------------- Net Income Available to Common Shareholders $11,434 $14,624 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO (excluding charge) $18,969 $19,895 - --------------------------------------------------------- ---------------------------- --------------------------------- Net Income Per Diluted Share $0.40 $0.51 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Per Diluted Share (excluding charge) $0.66 $0.70 - --------------------------------------------------------- ---------------------------- --------------------------------- Dividend Per Share $0.585 $0.575 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Payout Ratio (excluding charge) 89% 82% - --------------------------------------------------------- ---------------------------- --------------------------------- FFO $16,969 $19,895 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Per Diluted Share $0.59 $0.70 - --------------------------------------------------------- ---------------------------- ---------------------------------
Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $17.0 million, or $0.59 per diluted share, for the latest three months, compared with $19.9 million, or $0.70 per diluted share, for the same period in 1999. Included in FFO and net income is a previously disclosed $2 million or $0.07 per diluted share charge for the non-cash, non-recurring write-off of an equity investment in Summerville. Excluding the charge, FFO per diluted share for the three months ended December 31, 2000 would have been $0.66. Revenues were mostly unchanged as a result of increased rental income from newly converted construction properties offsetting the decline in the investment base as a result of asset dispositions. Net income available to common shareholders was reduced by about 22 percent during the quarter primarily as a result of an increase in the company's provision for depreciation, an increase in interest expense and the loss on the Summerville investment. The provision for depreciation in the fourth quarter totaled $6.1 million compared with $5.3 million for the same period in 1999. The increased provision for depreciation primarily was the result of additional investments in properties owned directly by the company. Interest expense for the latest three months was $8.5 million compared with $8.2 million for the same period in 1999. The company capitalizes certain interest costs associated with funds used to finance the construction of properties owned directly by the company. The company's interest expense is reduced by the amount -18- 2 4Q00 EARNINGS RELEASE - -------------------------------------------------------------------------------- capitalized. As a result of reduced construction financing, capitalized interest for the 2000 fourth quarter totaled $302,000 compared with $1.5 million for the same period in 1999.
SUMMARY OF YEAR-TO-DATE RESULTS - ------------------------------- (In thousands, except per share numbers) - --------------------------------------------------------- ---------------------------- --------------------------------- YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 - --------------------------------------------------------- ---------------------------- --------------------------------- Revenues $136,954 $129,307 - --------------------------------------------------------- ---------------------------- --------------------------------- Net Income Available to Common Shareholders $54,566 $62,824 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO (excluding charge) $77,531 $78,441 - --------------------------------------------------------- ---------------------------- --------------------------------- Net Income Per Diluted Share $1.91 $2.21 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Per Diluted Share (excluding charge) $2.71 $2.76 - --------------------------------------------------------- ---------------------------- --------------------------------- Dividend Per Share $2.335 $2.270 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Payout Ratio (excluding charge) 86% 82% - --------------------------------------------------------- ---------------------------- --------------------------------- FFO $75,531 $78,441 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Per Diluted Share $2.64 $2.76 - --------------------------------------------------------- ---------------------------- ---------------------------------
The decline in 2000 net income available to common shareholders was primarily related to an increase in the provision for depreciation, increases in interest expense, and the loss on investment previously indicated. For the year ended 2000, the provision for depreciation totaled $22.7 million compared with $17.9 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. During 2000, interest expense totaled $34.6 million compared with $26.9 million for the same period in the prior year, with capitalized interest totaling $3.1 million compared with $8.6 million for the same period in 1999. ASSET DISPOSITIONS EFFECTIVE IN REDUCING DEBT. In 2000, the company completed asset dispositions totaling $173 million to preserve its low leverage and liquidity in a tight capital market. The proceeds derived from the sales and refinancings were used to meet debt maturities, satisfy unfunded commitment obligations, and pay down the company's line of credit arrangements. The asset dispositions contributed to a 9 percent reduction in total assets, which at December 31, 2000, totaled $1.16 billion. The company had a total outstanding debt balance of $440 million at year-end 2000, down 18 percent from 1999, and shareholders' equity of $699 million, which represents a debt to total capitalization ratio of 0.39 to 1.0. For the year ended December 31, 2000, the company's coverage ratio of EBITDA to interest was 3.5 to 1.0. LEASE UP STATISTICS FOR ASSISTED LIVING FACILITIES. The company's stabilized assisted living portfolio increased significantly in 2000. Forty-four facilities with an investment balance of $196 million stabilized during the year 2000. As of December 31, 2000, 41 assisted living facilities remained in fill-up. Approximately 70 percent of these facilities were more than 50 percent occupied. The company anticipates that approximately 20 facilities with an investment balance of approximately $123 million will stabilize in the first two quarters of 2001, increasing stabilized properties to approximately 80 percent of the portfolio. UPDATE ON BALANCED CARE. Balanced Care Corporation recently announced the initiation of a restructuring plan. The company owns eight assisted living facilities and one skilled nursing facility that are leased to Balanced Care and represent approximately 5 percent of the company's portfolio. These facilities are located in Ohio, Pennsylvania, Indiana, and Tennessee. Five of the facilities are stabilized properties with an average occupancy of approximately 93 percent. Three other properties are in fill-up with an average occupancy of approximately 43 percent. One facility is under construction and is expected to open in the first quarter of 2001. Overall, the eight buildings that are open have occupancy of approximately 70 percent. The company holds letters of credit of approximately $2.2 million as security for Balanced Care's obligations. OUTLOOK FOR 2001. The company's fourth quarter 2000 FFO was $0.66 per diluted share excluding the loss on investment. In order to provide FFO estimates for 2001, the company believes it appropriate to assume no new investment activity beyond completion of $15 to $20 million of existing operator funding commitments, additional asset dispositions of approximately $60 million, increased borrowing costs under its extended line of credit and no further reductions in interest rates. These assumptions produce a base case FFO of $0.64 to $0.65 per diluted share per quarter. As market conditions change, the company will be in a position in subsequent quarterly earnings releases and conference calls to update and adjust FFO estimates. -19- 3 4Q00 EARNINGS RELEASE CONFERENCE CALL INFORMATION. Health Care REIT has scheduled a conference call on February 2, 2001 at 12:00 p.m. EST to discuss its fourth quarter 2000 performance, industry trends, portfolio performance, and its outlook for 2001. To participate on the webcast, log on to www.hcreit.com or www.streetfusion.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes and assisted living facilities. At December 31, 2000, the company had investments in 205 health care facilities in 34 states and had total assets of approximately $1.16 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com. This document and supporting schedules may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in the future to differ materially from expected results. These risks and uncertainties include, among others, general economic conditions, the availability of capital, competition within the financial services and real estate markets, the performance of operators within Health Care REIT's portfolio, and regulatory and other changes in the health care sector, as described in the company's filings with the Securities and Exchange Commission. FINANCIAL SCHEDULES FOLLOW ##### -20- 4 4Q00 EARNINGS RELEASE HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS)
DECEMBER 31 ---------------------------- 2000 1999 ---------------------------- ASSETS Real estate investments: Real property owned Land $ 74,319 $ 73,234 Buildings & improvements 770,660 730,337 Construction in progress 11,976 58,954 ----------- ----------- 856,955 862,525 Less accumulated depreciation (52,968) (35,746) ----------- ----------- Total real property owned 803,987 826,779 Loans receivable Real property loans 301,321 401,019 Subdebt investments 21,972 19,511 ----------- ----------- 323,293 420,530 Less allowance for losses on loans receivable (5,861) (5,587) ----------- ----------- 317,432 414,943 ----------- ----------- Net real estate investments 1,121,419 1,241,722 Other assets: Equity investments 5,450 6,713 Deferred loan expenses 2,939 3,311 Cash and cash equivalents 2,844 2,129 Receivables and other assets 24,252 17,296 ----------- ----------- 35,485 29,449 ----------- ----------- TOTAL ASSETS $ 1,156,904 $ 1,271,171 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 119,900 $ 177,500 Senior unsecured notes 255,000 290,000 Secured debt 64,852 71,342 Accrued expenses and other liabilities 18,545 25,333 ----------- ----------- Total liabilities $ 458,297 $ 564,175 Shareholders' equity: Preferred Stock 150,000 150,000 Common Stock 28,806 28,532 Capital in excess of par value 528,138 524,204 Undistributed net income (3,388) 8,883 Accumulated other comprehensive income (744) 593 Unamortized restricted stock (4,205) (5,216) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY $ 698,607 $ 706,996 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,156,904 $ 1,271,171 =========== ===========
-21- 5 4Q00 EARNINGS RELEASE 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 ----------------------------------- ------------------------------------ 2000 1999 2000 1999 ---------------- ------------------ ----------------- ------------------ Revenues: Operating lease rents $ 22,328 $ 20,872 $ 88,312 $ 72,700 Interest income 9,655 11,575 41,064 48,076 Commitment fees and other income 1,179 1,365 5,837 6,263 Prepayment fees 0 0 57 1,565 Gain on sale of properties 613 0 1,684 703 ------------- -------------- ------------ ------------ Gross Revenues 33,775 33,812 136,954 129,307 Expenses: Interest expense $ 8,529 $ 8,234 $ 34,622 $ 26,916 Provision for depreciation 6,148 5,271 22,706 17,885 Loss on investment 2,000 0 2,000 0 General and administrative 1,751 1,932 7,405 7,359 Loan expense 287 250 1,165 909 Provision for losses 250 150 1,000 600 ------------- -------------- ------------ ------------ Total Expenses 18,965 15,837 68,898 53,669 ------------- -------------- ------------ ------------ Net Income 14,810 17,975 68,056 75,638 Preferred stock dividends 3,376 3,351 13,490 12,814 ------------- -------------- ------------ ------------ Net Income Available to Common Shareholders $ 11,434 $ 14,624 $ 54,566 $ 62,824 ============= ============== ============ ============ Average number of common shares outstanding: Basic 28,537 28,216 28,418 28,128 Diluted 28,762 28,457 28,643 28,384 Net income per share: Basic $ 0.40 $ 0.52 $ 1.92 $ 2.23 Diluted 0.40 0.51 1.91 2.21 Funds from operations: $ 16,969 $ 19,895 $ 75,531 $ 78,441 Funds from operations per share: Basic $ 0.59 $ 0.71 $ 2.66 $ 2.79 Diluted 0.59 0.70 2.64 2.76 Funds from operations excluding loss on investment: $ 18,969 $ 19,895 $ 77,531 $ 78,441 Funds from operations per share excluding loss on investment: Basic $ 0.66 $ 0.71 $ 2.73 $ 2.79 Diluted 0.66 0.70 2.71 2.76 Dividends per share $ 0.585 $ 0.575 $ 2.335 $ 2.270
-22- 6 4Q00 EARNINGS RELEASE HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT - DECEMBER 31, 2000
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1 - ------------------------------ BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance -------------------- ------------------- -------------------- ----------------- Real Property 156 12,400 $ 803,987 71% Loans Receivable 49 5,377 301,321 27% Subdebt Investments -na- -na- 21,972 2% -------------------- ------------------- -------------------- ----------------- Total Investments 205 17,777 $ 1,127,280 100% INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Assisted Living Facilities 150 10,150 $ 749,334 66% Nursing Homes 47 6,625 299,364 26% Specialty Care Facilities 6 708 82,918 7% Behavioral Care 2 294 7,609 1% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 205 17,777 $ 1,139,225 100% INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Publicly Traded 72 4,316 $ 271,096 24% Key Private 88 8,789 655,868 57% Privately Held 45 4,672 212,261 19% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 205 17,777 $ 1,139,225 100% NOTES: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,127,280,000 AND $11,945,000, RESPECTIVELY.
REVENUE COMPOSITION ($000'S) EXHIBIT 2 - ---------------------------- Three Months Ended Year Ended December 31, 2000 December 31, 2000 ---------------------------------- ------------------------------ REVENUE BY INVESTMENT TYPE Real Property $ 23,303 69% $ 93,185 68% Loans Receivable & Other 9,781 29% 42,566 31% Subdebt Investments 691 2% 1,203 1% ------------------ --------------- ----------------- ------------- Total $ 33,775 100% $ 136,954 100% REVENUE BY FACILITY TYPE Assisted Living Facilities $ 22,162 66% $ 91,614 67% Nursing Homes 8,805 26% 34,097 25% Specialty Care Facilities 2,808 8% 11,243 8% Behavioral Care 0 0% 0 0% ------------------ --------------- ----------------- ------------- Total $ 33,775 100% $ 136,954 100% REVENUE BY OWNER TYPE Publicly Traded $ 8,246 24% $ 32,239 24% Key Private 20,264 60% 84,049 61% Privately Held 5,265 16% 20,666 15% ------------------ --------------- ----------------- ------------- Total $ 33,775 100% $ 136,954 100%
-23- 7 4Q00 EARNINGS RELEASE
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 - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2001 $ 1,994 $ 1,818 $ 3,812 4% 2002 1,738 6,524 8,262 6% 2003 2,770 1,480 4,250 3% 2004 410 5,213 5,623 4% Thereafter 86,143 20,922 107,065 83% ------------------------ ------------------------ ----------------------- ------------------- Total $ 93,055 $ 35,957 $ 129,012 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED
COMMITTED INVESTMENT BALANCES EXHIBIT 4 - ------------------------------ ($000'S EXCEPT INVESTMENT PER BED/UNIT) Committed Investment per # Properties # Beds/Units Balance (1) Bed/Unit -------------------- ------------------- -------------------- ------------------ Assisted Living Facilities 150 10,150 $ 763,997 $ 75,271 Nursing Homes 47 6,625 299,364 45,187 Specialty Care Facilities 6 708 82,918 117,116 Behavioral Care 2 294 7,609 25,880 -------------------- ------------------- -------------------- ------------------ Total 205 17,777 $ 1,153,888 -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 ----------------------- ---------------------- ----------------------- Merrill Gardens 19 $ 126,791 11% Life Care Centers of America, Inc. 13 86,654 8% Alterra Healthcare 38 85,961 8% Atria Senior Quarters 9 82,426 7% Balanced Care 9 53,977 5% Remaining Operators 117 703,416 61% ----------------------- ---------------------- ----------------------- Total 205 $ 1,139,225 100% CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Merrill Gardens 18 $ 12,941 10% Alterra Healthcare 38 10,482 8% Atria Senior Quarters 9 10,426 8% Life Care Centers of America, Inc. 13 9,189 7% Olympus Healthcare Group 11 7,069 5% Remaining Operators 116 86,847 62% ----------------------- ---------------------- ----------------------- Total 205 $ 136,954 100% NOTES: (1) YEAR ENDED DECEMBER 31, 2000
-24- 8 4Q00 EARNINGS RELEASE
SELECTED FACILITY DATA EXHIBIT 6 - ---------------------- Coverage Data % Payor Mix ---------------------------------- ----------------------------------- Before After Census Private Medicare Mgt. Fees Mgt. Fees ------------------ ------------------------------------ ------------------ --------------- Nursing Homes 81% 24% 12% 1.71x 1.21x Assisted Living Facilities 91% 100% 0% 1.35x 1.17x Specialty Care Facilities 65% 22% 50% 2.42x 1.88x Behavioral Care 53% 34% 66% 3.82x 1.90x ------------------ --------------- Weighted Averages 1.62x 1.27x NOTES: DATA AS OF SEPTEMBER 30, 2000
SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7 - ------------------------------------------------- Balance % Investment --------------- ----------------- Cross Defaulted $ 1,054,315 92% of gross real estate investments Cross Collateralized 274,554 92% of mortgage loans Bank Letters of Credit & Cash 30,767 3% of investment balance CURRENT CAPITALIZATION ($000'S) Balance % Balance LEVERAGE & PERFORMANCE RATIOS - ------------------------------- --------------- ----------------- ---------------------------------------- Borrowings Under Bank Lines $ 119,900 11% Debt/Total Book Cap 39% Long-Term Debt Obligations 319,852 28% Debt/Equity 63% Shareholders' Equity 698,607 61% Interest Coverage 3.66x 4th Qtr. --------------- ----------------- 3.51x L12M Total Book Capitalization $ 1,138,359 100% FFO Payout Ratio 89% 4th Qtr. (excluding loss on 86% L12M investment)
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 8 - ----------------------------------------------- Year Lines of Credit (1) Senior Notes Secured Debt Total - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2001 $ 25,000 $ 10,000 $ 67 $ 35,067 2002 0 20,000 75 20,075 2003 150,000 35,000 84 185,084 2004 0 40,000 64,133 104,133 2005 0 0 493 493 2006 0 0 0 0 Thereafter 0 150,000 0 150,000 ------------------------ ------------------------ ----------------------- ------------------- Total $ 175,000 $ 255,000 $ 64,852 $ 494,852 NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY
-25- 9 4Q00 EARNINGS RELEASE
INVESTMENT ACTIVITY ($000'S) EXHIBIT 9 ---------------------------- Three Months Ended Year Ended December 31, 2000 December 31, 2000 --------------------------------- --------------------------------- FUNDING BY INVESTMENT TYPE Real Property $ 4,097 21% $ 18,113 25% Mortgage & Other Loans 5,199 26% 5,199 7% Construction Advances 6,125 31% 33,957 47% Subdebt Investments 4,510 22% 15,523 21% ----------------- --------------- ---------------- ---------------- Total $ 19,931 100% $ 72,792 100% REAL ESTATE INVESTMENTS Assisted Living Facilities $ 16,852 87% $ 60,014 82% Nursing Homes 3,079 13% 12,778 18% Behavioral Care 0 0% 0 0% Specialty Care Facilities 0 0% 0 0% ----------------- --------------- ---------------- ---------------- Total $ 19,931 100% $ 72,792 100%
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10 - --------------------------------- CONCENTRATION BY REGION # Properties Investment % Investment ----------------------- ---------------------- ----------------------- South 116 $ 546,678 48% Northeast 31 260,826 23% West 32 200,338 17% Midwest 26 131,383 12% ----------------------- ---------------------- ----------------------- Total 205 $ 1,139,225 100% CONCENTRATION BY STATE # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Texas 34 $ 138,562 12% Florida 28 137,811 12% Massachusetts 14 119,318 10% New York 6 61,639 5% California 9 63,110 6% Remaining States 114 618,785 55% ----------------------- ---------------------- ----------------------- Total 205 $ 1,139,225 100% REVENUE BY STATE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Texas 34 $ 18,995 14% Florida 28 14,647 11% Massachusetts 14 12,627 9% California 9 9,339 7% North Carolina 9 8,451 6% Remaining States 111 72,895 53% ----------------------- ---------------------- ----------------------- Total 205 $ 136,954 100% NOTES: (1) YEAR ENDED DECEMBER 31, 2000
-26- 10 4Q00 EARNINGS RELEASE
FUNDS FROM OPERATIONS COMPUTATION ($000'S) EXHIBIT 11 - ------------------------------------------ Three Months Ended Year Ended December 31, 2000 December 31, 2000 ------------------------------- -------------------------- Net Income Available to Common Shareholders $ 11,434 $ 54,566 Add: Depreciation Expense 6,148 22,706 Asset Impairment Charges 0 0 Deduct: Gain on Sale of Assets (613) (1,684) Prepayment Fees (0) (57) ---------------------------- -- -------------------------- Funds From Operations (FFO) $ 16,969 $ 75,531 FFO Excluding Loss on Investment $ 18,969 $ 77,531 Average Common Shares Outstanding: Basic 28,537 28,418 Diluted 28,762 28,643 FFO Per Common Share: Basic $ .59 $ 2.66 Diluted $ .59 $ 2.64 FFO Per Common Share Excluding Loss on Investment: Basic $ .66 $ 2.73 Diluted $ .66 $ 2.71
DISPOSITION ACTIVITY EXHIBIT 12 -------------------- Three Months Ended Year Ended December 31, 2000 December 31, 2000 --------------------------------- --------------------------------- DISPOSITIONS BY INVESTMENT TYPE Real Property $ 0 0% $ 107,179 62% Mortgage & Other Loans 12,586 100% 65,963 38% ----------- ---- ----------- ------ Total $ 12,586 100% $ 173,142 100% =========== ==== =========== ==== REAL ESTATE INVESTMENTS Assisted Living Facilities $ 12,586 100% $ 170,743 99% Nursing Homes 0 0% 2,399 1% ----------- ------ ----------- ------ Total $ 12,586 100% $ 173,142 100% =========== ==== =========== ====
LEASE UP STATISTICS ON ASSISTED LIVING FACILITIES EXHIBIT 13 - ------------------------------------------------- OCCUPANCY FACILITIES MONTHS IN OPERATION REVENUE (1) % OF REVENUE ------------------- ----------------------- ----------------- ----------------- 00% - 50% 12 13.8 $3,110 9% 50% - 70% 15 17.2 $2,949 9% 70% + 14 18.1 $1,880 6% NOTES: (1) INTEREST AND RENTAL INCOME FOR YEAR ENDED DECEMBER 31, 2000.
-27- EX-99.5 6 l88293aex99-5.txt EXHIBIT 99.5 1 EXHIBIT 99.5 FOR IMMEDIATE RELEASE February 27, 2001 For more information contact: Raymond Braun - (419) 247-2800 Mike Crabtree - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS STATUS OF PORTFOLIO WITH ALTERRA HEALTHCARE CORPORATION Toledo, Ohio, February 27, 2001... HEALTH CARE REIT, INC. (NYSE/HCN), today provided details of its investments with Alterra Healthcare Corporation in response to Alterra's recent press release regarding the restructuring of its debt and lease obligations. Health Care REIT owns 38 assisted living facilities with 1,443 units and an investment balance of $86 million that are leased to Alterra and represent approximately 8 percent of the company's portfolio at December 31, 2000. These facilities are located in Oklahoma (17), Texas (6), Ohio (4), Florida (2), North Carolina (2), Tennessee (2), Minnesota (1), Oregon (1), Pennsylvania (1), South Carolina (1), and Washington (1). Thirty-two of the facilities are stabilized properties with an average occupancy for the fourth quarter 2000 of 95 percent and payment coverage of 1.62 before management fees and 1.40 after management fees. Six properties are in fill-up with an average occupancy for the fourth quarter 2000 of 70 percent and payment coverage before management fees of .33 and .20 after management fees. Overall, the portfolio had occupancy at 91 percent and payment coverage of 1.24 before management fees and 1.05 after management fees for the fourth quarter 2000. Alterra is current on its rent obligations with the company. Further reports will be made once the final terms of Alterra's restructuring plan have been determined. 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, 2000, the company had investments in 205 health care facilities in 34 states and had total assets of approximately $1.16 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com. This document 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. ##### -28- EX-99.6 7 l88293aex99-6.txt EXHIBIT 99.6 1 EXHIBIT 99.6 FOR IMMEDIATE RELEASE April 10, 2001 For more information contact: Ray Braun (419) 247-2800 Mike Crabtree (419) 247-2800 HEALTH CARE REIT, INC. TO RELEASE EARNINGS AND HOLD FIRST-QUARTER CONFERENCE CALL SET FOR MAY 4, 2001 Toledo, Ohio, April 10, 2001...HEALTH CARE REIT, INC. (NYSE/HCN) announced today that it will release its 2001 first-quarter earnings on Thursday, May 3, after New York Stock Exchange trading ends. At 11:00 a.m. Eastern Time on Friday, May 4, the company will hold a conference call to discuss the company's results and performance for the first quarter. The conference call will be accessible by telephone and through the Internet. Telephone access is available by dialing 888-413-2121. Callers to this number will be able to listen to the company's business update. For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the live call on May 4. To access the rebroadcast, dial 888-266-2086 or 703-925-2435. The conference ID number is 5052481. To participate on the webcast, log on to www.hcreit.com or www.streetfusion.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes and assisted living facilities. At December 31, 2000, the company had investments in 205 health care facilities in 34 states and had total assets of approximately $1.16 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. ##### -29- EX-99.7 8 l88293aex99-7.txt EXHIBIT 99.7 1 EXHIBIT 99.7 FOR IMMEDIATE RELEASE April 17, 2001 For more information contact: Ray Braun (419) 247-2800 Mike Crabtree (419) 247-2800 HEALTH CARE REIT, INC. DECLARES REGULAR DIVIDEND Toledo, Ohio, April 17, 2001...HEALTH CARE REIT, INC. (NYSE/HCN) announced today that its Board of Directors declared a dividend for the quarter ended March 31, 2001, of $0.585 per share. The dividend represents the 120th consecutive dividend payment. The dividend will be payable May 21, 2001, to shareholders of record on May 1, 2001. 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, 2000, the company had investments in 205 health care facilities in 34 states and had total assets of approximately $1.16 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. ##### -30- EX-99.8 9 l88293aex99-8.txt EXHIBIT 99.8 1 EXHIBIT 99.8 FOR IMMEDIATE RELEASE MAY 3, 2001 FOR MORE INFORMATION CONTACT: RAY BRAUN - (419) 247-2800 MIKE CRABTREE - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS FIRST QUARTER RESULTS Toledo, Ohio, May 3, 2001........HEALTH CARE REIT, INC. (NYSE/HCN) today announced operating results for its first quarter of 2001. The company continues to meet financial and operational expectations. "Our operating results for the quarter are on target with the guidance of $0.64 to $0.65 per share we provided earlier this year," commented George L. Chapman, chairman and chief executive officer. "We completed our $200 million asset disposition program this quarter with dispositions of $22 million for a total of $195 million. This strategy effectively preserved the company's fundamental credit qualities with low leverage of 38 percent debt to total capitalization and EBITDA coverage at 3.68 times. We will redeploy any future proceeds from sales or payoffs to acquire stabilized properties. We are seeing excellent investment opportunities that will enhance the portfolio. We intend to maintain the dividend at its current level, with increases to resume once capital becomes available at costs that permit accretive investment activity."
SUMMARY OF FIRST QUARTER RESULTS - -------------------------------- (In thousands, except per share numbers) - --------------------------------------------------------- ---------------------------- --------------------------------- THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 2001 MARCH 31, 2000 - --------------------------------------------------------- ---------------------------- --------------------------------- Revenues $32,577 $34,950 - --------------------------------------------------------- ---------------------------- --------------------------------- Net Income Available to Common Shareholders $11,827 $14,757 - --------------------------------------------------------- ---------------------------- --------------------------------- Funds From Operations (FFO) $18,479 $19,897 - --------------------------------------------------------- ---------------------------- --------------------------------- Net Income Per Diluted Share $0.41 $0.52 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Per Diluted Share $0.64 $0.70 - --------------------------------------------------------- ---------------------------- --------------------------------- Dividend Per Share $0.585 $0.580 - --------------------------------------------------------- ---------------------------- --------------------------------- FFO Payout Ratio 91% 83% - --------------------------------------------------------- ---------------------------- ---------------------------------
Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $18.5 million, or $0.64 per diluted share, for the first three months of 2001, compared with $19.9 million, or $0.70 per diluted share, for the same period in 2000. The decrease was attributable to the decline in revenues generated by the smaller asset base, which resulted from the planned asset disposition program. ASSET DISPOSITIONS EFFECTIVE IN REDUCING DEBT. In 2000, the company completed asset dispositions totaling $173 million to preserve its low leverage and liquidity in a tight capital market. The company completed its asset disposition program in the first quarter of 2001 with dispositions totaling $22 million reducing total assets to $1.1 billion. The proceeds derived from the sales and mortgage payoffs were used to meet debt maturities, satisfy unfunded commitment obligations, and pay down the company's line of credit arrangements. -31- 2 1Q01 EARNINGS RELEASE The company had a total outstanding debt balance of $430 million at March 31, 2001, down from $534 million in first quarter 2000, and shareholders' equity of $695 million, which represents a debt to total capitalization ratio of 38 percent. For the first three months of 2001, the company's coverage ratio of EBITDA to interest was 3.68 to 1.0. LEASE UP STATISTICS FOR ASSISTED LIVING FACILITIES. The company is on track to stabilize another $100-$125 million of investments in its assisted living portfolio by June 30, 2001. As of December 31, 2000, 41 assisted living facilities remained in fill-up. During the first quarter 2001, 11 assisted living facilities were stabilized and two completed construction. The company ended the quarter with 111 stabilized assisted living facilities and 32 assisted living facilities in fill-up. "We are pleased with the progress in stabilizing the assisted living portfolio," remarked Mr. Chapman. "Approximately 75 percent of our portfolio is currently stabilized and will approach 80 percent by midyear. Our same store payment coverage after management fees for 2000 was 1.41 times compared with 1.08 times in 1999. Stabilized facility cash flows are increasingly reflecting the dramatic decrease in new construction, the burn-off of rent concessions, and the pricing power of quality operators in this asset class. Many of our operators are implementing price increases of 5-10 percent this year in stabilized facilities. We are looking forward to completing the stabilization process." OUTLOOK FOR 2001. The company previously announced its guidance of FFO of $0.64 to $0.65 per diluted share per quarter. The company believes these estimates remain appropriate. CONFERENCE CALL INFORMATION. Health Care REIT has scheduled a conference call on May 4, 2001, at 11:00 A.M. EST to discuss its first quarter 2001 performance, industry trends, portfolio performance, and its outlook for 2001. To participate on the webcast, log on to www.hcreit.com or www.streetfusion.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily nursing homes and assisted living facilities. At March 31, 2001, the company had investments in 201 health care facilities in 34 states and had total assets of approximately $1.1 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com. This document and supporting schedules may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in the future to differ materially from expected results. These risks and uncertainties include, among others, general economic conditions, the availability of capital, competition within the financial services and real estate markets, the performance of operators within Health Care REIT's portfolio, and regulatory and other changes in the health care sector, as described in the company's filings with the Securities and Exchange Commission. FINANCIAL SCHEDULES FOLLOW ##### -32- 3 1Q01 EARNINGS RELEASE HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS)
MARCH 31 ---------------------------- 2001 2000 ---------------------------- ASSETS Real estate investments: Real property owned Land $ 77,109 $ 72,373 Buildings & improvements 792,745 720,601 Construction in progress 7,641 52,975 ----------- ----------- 877,495 845,949 Less accumulated depreciation (59,754) (40,494) ----------- ----------- Total real property owned 817,741 805,455 Loans receivable Real property loans 268,377 404,189 Subdebt investments 22,225 25,350 ----------- ----------- 290,602 429,539 Less allowance for losses on loans receivable (6,111) (5,837) ----------- ----------- 284,491 423,702 ----------- ----------- Net real estate investments 1,102,232 1,229,157 Other assets: Equity investments 5,501 6,359 Deferred loan expenses 3,915 3,461 Cash and cash equivalents 2,537 1,380 Receivables and other assets 27,096 21,509 ----------- ----------- 39,049 32,709 ----------- ----------- TOTAL ASSETS $ 1,141,281 $ 1,261,866 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 110,300 $ 172,900 Senior unsecured notes 255,000 290,000 Secured debt 64,835 71,318 Accrued expenses and other liabilities 16,311 21,739 ----------- ----------- Total liabilities $ 446,446 $ 555,957 Shareholders' equity: Preferred Stock 150,000 150,000 Common Stock 28,881 28,577 Capital in excess of par value 529,417 524,778 Undistributed (overdistributed) net income (8,416) 7,087 Accumulated other Comprehensive income (994) 248 Unamortized restricted stock (4,053) (4,781) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY $ 694,835 $ 705,909 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,141,281 $ 1,261,866 =========== ===========
-33- 4 1Q01 EARNINGS RELEASE HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31 -------------------------------------------- 2001 2000 ----------------------- -------------------- Revenues: Operating lease rents $ 22,608 $ 21,630 Interest income 8,945 11,521 Commitment fees and other income 890 1,676 Prepayment fees 134 0 Gain on sale of properties 0 123 -------------- -------------- Gross Revenues 32,577 34,950 Expenses: Interest expense $ 8,112 $ 9,101 Provision for depreciation 6,786 5,263 General and administrative 1,851 1,900 Loan expense 375 317 Provision for losses 250 250 -------------- -------------- Total Expenses 17,374 16,831 -------------- -------------- Net Income 15,203 18,119 Preferred stock dividends 3,376 3,362 -------------- -------------- Net Income Available to Common Shareholders $ 11,827 $ 14,757 ============== ============== Average number of common shares outstanding: Basic 28,617 28,216 Diluted 28,871 28,457 Net income per share: Basic $ 0.41 $ 0.52 Diluted 0.41 0.52 Funds from operations: $ 18,479 $ 19,897 Funds from operations per share: Basic $ 0.65 $ 0.71 Diluted 0.64 0.70 Dividends per share $ 0.585 $ 0.580
-34- 5 1Q01 EARNINGS RELEASE HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT - MARCH 31, 2001
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1 - ------------------------------ BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance -------------------- ------------------- -------------------- ----------------- Real Property 157 12,444 $ 817,741 74% Loans Receivable 44 5,065 268,377 24% Subdebt Investments -na- -na- 22,225 2% -------------------- ------------------- -------------------- ----------------- Total Investments 201 17,509 $ 1,108,343 100% INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Assisted Living Facilities 148 10,090 $ 749,763 67% Nursing Homes 43 5,868 248,004 22% Specialty Care Facilities 10 1,551 122,001 11% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 201 17,509 $ 1,119,768 100% INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Publicly Traded 71 4,235 $ 267,115 24% Key Private 86 8,581 633,545 57% Privately Held 44 4,693 219,108 19% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 201 17,509 $ 1,119,768 100% NOTES: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,108,343,000 AND $11,425,000, RESPECTIVELY.
REVENUE COMPOSITION ($000'S) EXHIBIT 2 - ---------------------------- Three Months Ended March 31, 2001 Year-to-Date ---------------------------------- ------------------------------ REVENUE BY INVESTMENT TYPE Real Property $ 23,063 71% Loans Receivable & Other 8,822 27% (Not Applicable) Subdebt Investments 692 2% ------------------ --------------- ----------------- ------------- Total $ 32,577 100% REVENUE BY FACILITY TYPE Assisted Living Facilities $ 21,292 65% Nursing Homes 7,071 22% Specialty Care Facilities 4,214 13% ------------------ --------------- ----------------- ------------- Total $ 32,577 100% REVENUE BY OWNER TYPE Publicly Traded $ 8,208 25% Key Private 18,956 58% Privately Held 5,413 17% ------------------ --------------- ----------------- ------------- Total $ 32,577 100%
-35- 6 1Q01 EARNINGS RELEASE
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 - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2001 $ 1,993 $ 1,801 $ 3,794 3% 2002 1,738 6,576 8,314 7% 2003 2,770 0 2,770 2% 2004 410 5,832 6,242 5% Thereafter 88,183 18,163 106,346 83% ------------------------ ------------------------ ----------------------- ------------------- Total $ 95,094 $ 32,372 $ 127,466 100% NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED
COMMITTED INVESTMENT BALANCES EXHIBIT 4 - ------------------------------ ($000'S EXCEPT INVESTMENT PER BED/UNIT) Committed Investment per # Properties # Beds/Units Balance (1) Bed/Unit -------------------- ------------------- -------------------- ------------------ Assisted Living Facilities 148 10,090 $ 759,147 $ 75,238 Nursing Homes 43 5,868 248,592 42,364 Specialty Care Facilities 10 1,551 122,001 78,659 -------------------- ------------------- -------------------- ------------------ Total 201 17,509 $ 1,129,740 -na- NOTES: (1) COMMITTED BALANCE INCLUDES REAL ESTATE INVESTMENTS, CREDIT ENHANCEMENTS AND UNFUNDED COMMITMENTS FOR WHICH INITIAL FUNDING HAD COMMENCED.
OPERATOR CONCENTRATION ($000'S) EXHIBIT 5 - ------------------------------- CONCENTRATION BY INVESTMENT # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Merrill Gardens 19 $ 126,722 11% Life Care Centers of America, Inc. 13 86,093 8% Alterra Healthcare 38 85,353 8% Atria Senior Quarters 9 79,571 7% Balanced Care 9 54,991 5% Remaining Operators 113 687,038 61% ----------------------- ---------------------- ----------------------- Total 201 $ 1,119,768 100% CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Merrill Gardens 19 $ 3,446 11% Alterra Healthcare 38 2,655 8% Atria Senior Quarters 9 2,400 7% Life Care Centers of America, Inc. 13 2,039 6% Tandem 8 1,572 5% Remaining Operators 114 20,465 63% ----------------------- ---------------------- ----------------------- Total 201 $ 32,577 100% NOTES: (1) THREE MONTHS ENDED MARCH 31, 2001
-36- 7 1Q01 EARNINGS RELEASE
SELECTED FACILITY DATA EXHIBIT 6 - ---------------------- Coverage Data % Payor Mix ---------------------------------- ------------------------------------ Before After Census Private Medicare Mgt. Fees Mgt. Fees ------------------ ------------------------------------ ------------------ --------------- Nursing Homes 83% 26% 11% 1.61x 1.20x Assisted Living Facilities 90% 100% 0% 1.30x 1.12x Specialty Care Facilities 57% 13% 36% 1.93x 1.52x ------------------ --------------- Weighted Averages 1.48x 1.20x NOTES: DATA AS OF DECEMBER 31, 2000
SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7 - ------------------------------------------------- Balance % Investment --------------- ----------------- Cross Defaulted $ 1,028,874 92% of gross real estate investments Cross Collateralized 224,980 84% of mortgage loans Bank Letters of Credit & Cash 24,277 2% of investment balance CURRENT CAPITALIZATION ($000'S) Balance % Balance LEVERAGE & PERFORMANCE RATIOS - ------------------------------- --------------- ----------------- ---------------------------------------- Borrowings Under Bank Lines $ 110,300 10% Debt/Total Book Cap 38% Long-Term Debt Obligations 319,835 28% Debt/Equity 62% Shareholders' Equity 694,835 62% Interest Coverage 3.68x 1st Qtr. --------------- ----------------- 3.61x L12M Total Book Capitalization $ 1,124,970 100% FFO Payout Ratio 91% 1st Qtr. 88% L12M
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 8 - ----------------------------------------------- Year Lines of Credit (1) Senior Notes Secured Debt Total - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2001 $ 0 $ 10,000 $ 51 $ 10,051 2002 25,000 20,000 75 45,075 2003 150,000 35,000 84 185,084 2004 0 40,000 64,132 104,132 2005 0 0 493 493 2006 0 0 0 0 2007 0 0 0 0 Thereafter 0 150,000 0 150,000 ------------------------ ------------------------ ----------------------- ------------------- Total $ 175,000 $ 255,000 $ 64,835 $ 494,835 NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY
-37- 8 1Q01 EARNINGS RELEASE
INVESTMENT ACTIVITY ($000'S) EXHIBIT 9 ---------------------------- Three Months Ended March 31, 2001 Year-to-Date --------------------------------- --------------------------------- FUNDING BY INVESTMENT TYPE Real Property $ 2,164 15% Mortgage & Other Loans 0 0% (Not Applicable) Construction Advances 6,777 82% Subdebt Investments 273 3% ----------------- --------------- --------------------------------- Total $ 9,214 100% REAL ESTATE INVESTMENTS Assisted Living Facilities $ 5,661 67% Nursing Homes 3,553 33% Behavioral Care 0 0% Specialty Care Facilities 0 0% ----------------- --------------- --------------------------------- Total $ 9,214 100%
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10 - --------------------------------- CONCENTRATION BY REGION # Properties Investment % Investment ----------------------- ---------------------- ----------------------- South 112 $ 518,980 46% Northeast 31 260,372 23% West 32 208,992 19% Midwest 26 131,424 12% ----------------------- ---------------------- ----------------------- Total 201 $ 1,119,768 100% CONCENTRATION BY STATE # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Florida 26 $ 138,105 12% Texas 33 124,361 11% Massachusetts 14 121,702 11% California 10 69,837 6% New York 6 58,974 5% Remaining States 112 606,789 55% ----------------------- ---------------------- ----------------------- Total 201 $ 1,119,768 100% REVENUE BY STATE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Texas 33 $ 4,246 13% Florida 26 3,537 11% Massachusetts 14 3,053 9% California 10 2,268 7% New York 6 1,778 5% Remaining States 112 17,695 55% ----------------------- ---------------------- ----------------------- Total 201 $ 32,577 100% NOTES: (1) THREE MONTHS ENDED MARCH 31, 2001
-38- 9 1Q01 EARNINGS RELEASE
FUNDS FROM OPERATIONS COMPUTATION ($000'S) EXHIBIT 11 - ------------------------------------------ Three Months Ended March 31, 2001 Year-to-Date ------------------------------- -------------------------- Net Income Available to Common Shareholders $ 11,827 Add: Depreciation Expense 6,786 Asset Impairment Charges 0 (Not Applicable) Deduct: Gain on Sale of Assets 0 Prepayment Fees (134) ---------------------------- -- -------------------------- Funds From Operations (FFO) $ 18,479 Average Common Shares Outstanding: Basic 28,617 Diluted 28,871 FFO Per Common Share: Basic $ 0.65 Diluted $ 0.64
DISPOSITION ACTIVITY EXHIBIT 12 -------------------- Three Months Ended March 31, 2001 (Year-to-Date) --------------------------------- --------------------------------- DISPOSITIONS BY INVESTMENT TYPE Real Property $ 0 0% Mortgage & Other Loans 21,655 100% (Not Applicable) ----------- ---- Total $ 21,655 100% =========== ==== REAL ESTATE INVESTMENTS Assisted Living Facilities $ 0 0% Nursing Homes 0 0% Specialty Care Facilities 21,655 100% ----------- ---- Total $ 21,655 100% =========== ====
LEASE UP STATISTICS ON ASSISTED LIVING FACILITIES EXHIBIT 13 - ------------------------------------------------- OCCUPANCY FACILITIES MONTHS IN OPERATION REVENUE (1) % OF REVENUE ------------------- ----------------------- ----------------- ----------------- 00% - 50% 11 14.6 $3,013 9% 50% - 70% 15 18.6 $2,840 8% 70% + 6 20.9 $1,656 5% NOTES: (1) INTEREST AND RENTAL INCOME FOR THREE MONTHS ENDED MARCH 31, 2001.
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