-----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, EHb66+IjCr9lWtb6MGZHTHbPmABL6JJKnk946ZWeSpadeEbuI6pYzsjmT6qb5LGo 3EG/ApZ5I1xzTLKIYacXyA== 0000950152-02-003872.txt : 20020507 0000950152-02-003872.hdr.sgml : 20020507 ACCESSION NUMBER: 0000950152-02-003872 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020507 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: 1934 Act SEC FILE NUMBER: 001-08923 FILM NUMBER: 02637215 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 l93886ae10-q.txt HEALTH CARE REIT, INC. FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2002 ------------------------------------------------ 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 2, 2002. Class: Shares of Common Stock, $1.00 par value Outstanding 33,947,132 shares HEALTH CARE REIT, INC. INDEX
Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets - March 31, 2002 and December 31, 2001 3 Consolidated Statements of Income - Three months ended March 31, 2002 and 2001 4 Consolidated Statements of Shareholders' Equity - Three months ended March 31, 2002 and 2001 5 Consolidated Statements of Cash Flows - Three months ended March 31, 2002 and 2001 6 Notes to Unaudited Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosure About Market Risk 11 PART II. OTHER INFORMATION Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 EXHIBIT INDEX 14
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS -------------------- CONSOLIDATED BALANCE SHEETS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
MARCH 31 DECEMBER 31 2002 2001 (UNAUDITED) (NOTE) ----------- ------ (IN THOUSANDS) ASSETS Real estate investments: Real property owned: Land $ 98,901 $ 89,601 Buildings & improvements 1,044,243 947,794 ----------------- ----------------- 1,143,144 1,037,395 Less accumulated depreciation (89,221) (80,544) ------------------ ------------------ Total real property owned 1,053,923 956,851 Loans receivable Real property loans 240,128 240,126 Subdebt investments 24,212 23,448 ------------------ ------------------- 264,340 263,574 Less allowance for loan losses (7,111) (6,861) ------------------ ------------------ Net real estate investments 1,311,152 1,213,564 Other Assets: Equity investments 6,550 6,498 Deferred loan expenses 6,823 7,190 Cash and cash equivalents 8,122 9,826 Receivables and other assets 36,333 32,765 ------------------ ------------------- 57,828 56,279 ------------------ ------------------- TOTAL ASSETS $ 1,368,980 $ 1,269,843 ================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 78,000 $ 0 Senior unsecured notes 412,250 412,250 Secured debt 81,123 78,966 Accrued expenses and other liabilities 16,047 20,757 ------------------ ----------------- TOTAL LIABILITIES 587,420 511,973 Shareholders' equity: Preferred stock 150,000 150,000 Common stock 33,947 32,740 Capital in excess of par value 637,920 608,942 Cumulative net income 528,725 512,837 Cumulative dividends (563,473) (540,946) Accumulated other comprehensive loss (995) (923) Unamortized restricted stock (4,564) (4,780) ------------------ ------------------ TOTAL SHAREHOLDERS' EQUITY 781,560 757,870 ------------------ ------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,368,980 $ 1,269,843 ================== ===================
NOTE: The consolidated balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. See notes to unaudited consolidated financial statements 3 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31 2002 2001 ----------------------- --------------------- (IN THOUSANDS EXCEPT PER SHARE DATA) REVENUES: Rental income $ 30,051 $ 22,608 Interest income 6,787 8,945 Commitment fees and other income 557 890 Prepayment fees 0 134 ------------------ ------------------ Total revenue 37,395 32,577 EXPENSES: Interest expense 9,742 8,112 Loan expense 577 375 Provision for depreciation 8,677 6,786 Provision for losses 250 250 General and administrative expenses 2,261 1,851 ------------------ ------------------ Total expenses 21,507 17,374 ------------------ ------------------ Net income 15,888 15,203 Preferred stock dividends 3,377 3,376 ----------------- ----------------- Net income available to common shareholders $ 12,511 $ 11,827 ================== ================== Average number of shares outstanding: Basic 32,946 28,617 Diluted 33,693 28,871 Net income per share: Basic $ 0.38 $ 0.41 Diluted 0.37 0.41 Dividends declared and paid per common share $ 0.585 $ 0.585
See notes to unaudited consolidated financial statements 4 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
Three months ended March 31, 2002 ---------------------------------------------------------------- Capital In Unamortized Preferred Common Excess of Restricted Cumulative In thousands Stock Stock Par Value Stock Earnings ---------------------------------------------------------------- Balance at beginning of period $150,000 32,740 $608,942 $(4,780) $512,837 Comprehensive income: Net income 15,888 Unrealized gains on securities Foreign currency translation adjustment Comprehensive income Proceeds from issuance from dividend reinvestment and stock 301 6,228 (189) incentive plans, net of forfeitures Proceeds from issuance of 906 22,750 common shares Restricted stock amortization 405 Cash dividends paid -------- ------ -------- ------- -------- Balance at end of period $150,000 $33,947 $637,920 $(4,564) $528,725 ======== ======= ======== ======== ========
Three months ended March 31, 2002 ----------------------------------------- Accum. Other Cumulative Comprehensive In thousands Dividends Loss Total ----------------------------------------- Balance at beginning of period $(540,946) $ (923) $757,870 Comprehensive income: Net income 15,888 Unrealized gains on securities 9 9 Foreign currency translation adjustment (81) (81) --------- Comprehensive income 15,816 Proceeds from issuance from dividend reinvestment and stock 6,340 incentive plans, net of forfeitures Proceeds from issuance of 23,656 common shares Restricted stock amortization Cash dividends paid (22,527) (22,527) --------- --------- ---------- Balance at end of period $(563,473) $ (995) $781,560 ========== ========= ========
Three months ended March 31, 2002 ---------------------------------------------------------------- Capital In Unamortized Preferred Common Excess of Restricted Cumulative In thousands Stock Stock Par Value Stock Earnings ---------------------------------------------------------------- Balance at beginning of period $150,000 $28,806 $528,138 $(4,205) $452,288 Comprehensive income: Net income 15,203 Unrealized losses on securities Foreign currency translation adjustment Comprehensive income Proceeds from issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures 75 1,279 (141) Restricted stock amortization 293 Cash dividends paid -------- ------- --------- -------- -------- Balance at end of period $150,000 $28,881 $529,417 $(4,053) $467,491 ======== ======= ========= ======== ========
Three months ended March 31, 2002 ----------------------------------------- Accum. Other Cumulative Comprehensive In thousands Dividends Loss Total ----------------------------------------- Balance at beginning of period $(455,676) $ (744) $698,607 Comprehensive income: Net income 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 stock incentive plans, net of forfeitures 1,213 Restricted stock amortization 293 Cash dividends paid (20,231) (20,231) --------- -------- -------- Balance at end of period $(475,907) $ (994) $694,835 ========== ========= ======== See notes to unaudited consolidated financial statements 5 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31 2002 2001 ------------------------------ (IN THOUSANDS) OPERATING ACTIVITIES Net income $ 15,888 $ 15,203 Adjustments to reconcile net income to net cash Provision for depreciation 8,696 6,845 Provision for losses 250 250 Amortization 981 668 Loan and commitment fees earned in excess of cash received (456) (559) Rental income in excess of cash received (2,122) (2,154) Interest and other income in excess of cash received 104 (84) Decrease in accrued expenses and other liabilities (4,253) (1,676) Increase in receivables and other assets (1,458) (669) ---------- ---------- NET CASH PROVIDED FROM OPERATING ACTIVITIES 17,630 17,824 INVESTING ACTIVITIES Investment in real properties (97,659) (6,857) Investment in loans receivable (7,338) (5,719) Other investments, net (228) (228) Principal collected on loans 731 24,738 Other (8) (79) ------------ ------------ NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES (104,502) 11,855 FINANCING ACTIVITIES Net (payments) borrowings under line of credit arrangements 78,000 (9,600) Principal payments on long-term obligations (90) (17) Issuance of common stock 29,996 1,213 Increase in deferred loan expense (211) (1,351) Cash distributions to shareholders (22,527) (20,231) ------------ ------------ NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES 85,168 (29,986) ------------ ------------ Decrease in cash and cash equivalents (1,704) (307) Cash and cash equivalents at beginning of period 9,826 2,844 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,122 $ 2,537 ============ =========== Supplemental Cash Flow Information -- Interest Paid $ 14,170 $ 9,770 ============ =========== See notes to unaudited consolidated financial statements
6 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 accounting principles generally accepted in the United States 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 accounting principles generally accepted in the United States 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, 2002, are not necessarily an indication of the results that may be expected for the year ending December 31, 2002. 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, 2001. NOTE B - REAL ESTATE INVESTMENTS During the three months ended March 31, 2002, the Company invested $97,659,000 in real property, made real estate loan advances of $7,338,000 and funded $228,000 of equity related investments. During the three months ended March 31, 2002, the Company had no property sales and received principal payments on real estate mortgages totaling $731,000. 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, 2002, 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. NOTE D - CONTINGENT LIABILITIES As disclosed in the financial statements for the year ended December 31, 2001, the Company was contingently liable for certain obligations amounting to $11,425,000. NOTE E - DISTRIBUTIONS PAID TO COMMON SHAREHOLDERS On February 20, 2002, the Company paid a dividend of $0.585 per share to shareholders of record on January 31, 2002. This dividend related to the period from October 1, 2001 through December 31, 2001. 7 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 -------------------------------- 2002 2001 --------- --------- Numerator for basic and diluted earnings per share-income available to common shareholders $ 12,511 $ 11,827 ========= ========= Denominator for basic earnings per share - weighted average shares 32,946 28,617 Effect of dilutive securities: Employee stock options 492 29 Nonvested restricted shares 255 225 --------- --------- Dilutive potential common shares 747 254 --------- --------- Denominator for diluted earnings per share - adjusted weighted average shares 33,693 28,871 ========= ========= Basic earnings per share $ 0.38 $ 0.41 Diluted earnings per share $ 0.37 $ 0.41
The diluted earnings per share calculation excludes the dilutive effect of 10,000 and 1,350,000 shares for the three month periods ended March 31, 2002 and March 31, 2001, 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 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- LIQUIDITY AND CAPITAL RESOURCES At March 31, 2002, the Company's net real estate investments totaled $1,311,152,000 which included 159 assisted living facilities, 60 skilled nursing facilities and seven 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. In February, 2002, the Company issued 906,125 shares of Common Stock, $1 par value, at a price of $27.59 per share, which generated net proceeds of $23,656,000. As of March 31, 2002, the Company had a total outstanding debt balance of $571,373,000 and shareholders' equity of $781,560,000 which represents a debt to equity ratio of .73 to 1.0, and a debt to total capitalization ratio of .42 to 1.0. As of March 31, 2002, 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 May 31, 2002. Also, at March 31, 2002, the Company had secured line of credit arrangements totaling $64,000,000. At March 31, 2002, the Company had $78,000,000 in borrowings under the unsecured line of credit arrangements and $33,000,000 outstanding on the secured line of credit arrangements. As of March 31, 2002, the Company had an effective shelf registration on file with the Securities and Exchange Commission under which the Company may issue up to $652,000,000 of securities including debt securities, common and preferred stock and warrants. 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. RESULTS OF OPERATIONS Revenues were comprised of the following:
Three months ended Change ------------------ -------------------- March. 31, 2002 March. 31, 2001 $ % --------------- --------------- -------- ------ (000's) Rental income $ 30,051 $ 22,608 $ 7,443 33% Interest income 6,787 8,945 (2,158) (24%) Commitment fees and other income 557 890 (333) 37% Prepayment fees - 134 (134) (100%) -------------- -------------- -------- -------- Total $ 37,395 $ 32,577 $ 4,818 15% ============== ============== ======== ======
For the three months ended March 31, 2002, the Company generated increased rental income as a result of the acquisition of properties for which the Company receives rent. This offset a reduction in interest income due to the repayment of mortgage loans. Commitment fees and other income decreased primarily as a result of the completion of construction projects. 9 Expenses were comprised of the following:
Three months ended Change ------------------ --------------------- March 31, 2002 March 31, 2001 $ % -------------- -------------- --------- ---------- (000's) Interest expense $ 9,742 $ 8,112 $ 1,630 20% Loan expense 577 375 202 54% Provision for depreciation 8,677 6,786 1,891 28% Provision for losses 250 250 - -% General and administrative expenses 2,261 1,851 410 22% -------------- -------------- --------- ---------- Total $ 21,507 $ 17,374 $ 4,133 24% ============== ============= ========= ==========
The increase in interest expense was primarily due to the issuance of $175,000,000 in senior unsecured notes in August, 2001. This was offset by lower average borrowings on the Company's lines of credit and lower interest rates. In addition, there was 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. There was no capitalized interest for the three-month period ended March 31, 2002 as compared with $334,000 for the same period in 2001. The provision for depreciation increased over the comparable periods in 2001 primarily as a result of additional investments in properties owned directly by the Company. General and administrative expenses as a percentage of revenues for the three-month period were 6.05% as compared with 5.68% for the same period in 2001. As a result of the various factors mentioned above, net income available to common shareholders for the three-month period was $12,511,000 or $0.37 per diluted share, as compared with $11,827,000, or $0.41 per diluted share for the comparable periods in 2001. 10 STATEMENT REGARDING FORWARD LOOKING DISCLOSURE This report on Form 10-Q of the Company may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern the possible expansion of our portfolio; the performance of our operators and properties; our ability to obtain new viable tenants for properties which we take back from financially troubled tenants, if any; our ability to make distributions; our policies and plans regarding investments, financings and other matters; our tax status as a real estate investment trust; our ability to appropriately balance the use of debt and equity; and our ability to access capital markets or other sources of funds. When we use words such as "believes", "expects", "anticipates", or similar expressions, we are making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including: the status of the economy; the status of capital markets, including prevailing interest rates; compliance with and changes to regulations and payment policies within the health care industry; changes in financing terms; competition within the health care and senior housing industries; and changes in federal, state and local legislation. Finally, we assume no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements." ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------- The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates. The Company seeks to mitigate the effects of fluctuations in interest rates by matching the term of new investments with new long-term fixed rate borrowings to the extent possible. The following section is presented to provide a discussion of the risks associated with potential fluctuations in interest rates. The Company historically borrows on its revolving lines of credit to make acquisitions or to finance the construction of health care facilities. Then, as market conditions dictate, the Company will issue equity or long-term fixed rate debt to repay the borrowings under the revolving lines of credit. A change in interest rates will not affect future earnings or cash flow on our fixed rate debt. Interest rate changes, however, will affect the fair value of such debt. A 1% increase in interest rates would result in a decrease in fair value of the Company's Senior Unsecured Notes by approximately $15 million at March 31, 2002. Changes in the interest rate environment upon maturity of this fixed rate debt could have an affect on the future cash flows and earnings of the Company, depending on whether the debt is replaced with other fixed rate debt, with variable rate debt, with equity or by the sale of assets. A change in interest rates will not affect the fair value of the Company's variable rate debt, including its unsecured and secured revolving credit arrangements. At March 31, 2002, a 1% increase in interest rates related to this variable rate debt and assuming no changes in outstanding balances, would result in increased annual interest expense of $1,110,000. The Company is subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of such refinancing may not be as favorable as the terms of current indebtedness. The majority of the Company's borrowings were completed pursuant to indentures or contractual agreements which limit the amount of indebtedness the Company may incur. Accordingly, in the event that the Company is unable to raise additional equity or borrow money because of these limitations, the Company's ability to acquire additional properties may be limited. From time to time, the Company's variable interest rate debt may exceed its variable interest rate assets, presenting an exposure to rising interest rates. The Company may or may not elect to use financial derivative instruments to hedge variable interest rate exposure. Such decisions are principally based on the Company's policy to match its variable rate investments with comparable borrowings, but is also based on the general trend in interest rates at the applicable dates and the Company's perception of future volatility of interest rates. 11 PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION ----------------- On April 10, 2002, the Company issued a press release announcing investments of $101.7 million for first quarter. On April 16, 2002, the Company issued a press release announcing declaration of regular dividend. On May 2, 2002, the Company issued a press release announcing earnings results for first quarter. On May 3, 2002, the Company issued a press release anncouncing the promotion of Ray Braun to President. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits 10.1 Amendment No. 4 to Loan Agreement dated as of April 15, 2002 by and among Health Care REIT, Inc., its subsidiaries, the banks signatory thereto and Key Corporate Capital Inc. 99.1 Press release dated April 10, 2002. 99.2 Press release dated April 16, 2002. 99.3 Press release dated May 2, 2002. 99.4 Press release dated May 3, 2002. (b) Form 8-K filed on February 22, 2002. Form 8-K filed on February 26, 2002. 12 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 7, 2002 By: /S/ GEORGE L. CHAPMAN ------------------------ ------------------------------------------------ George L. Chapman, Chairman and Chief Executive Officer Date: May 7, 2002 By: /S/ RAYMOND W. BRAUN ----------------------- ------------------------------------------------ Raymond W. Braun, President and Chief Financial Officer Date: May 7, 2002 By: /S/ MICHAEL A. CRABTREE ----------------------- ------------------------------------------------ Michael A. Crabtree, Chief Accounting Officer
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 -------------- ------------------- 10.1 Amendment No. 4 to Loan Agreement dated as of April 15, 2002 by and among Health Care REIT, Inc., its subsidiaries, the banks signatory thereto and Key Corporate Capital Inc. 99.1 Press release dated April 10, 2002. 99.2 Press release dated April 16, 2002. 99.3 Press release dated May 2, 2002. 99.4 Press release dated May 3, 2002.
14 EX-10.1 3 l93886aex10-1.txt EXHIBIT 10.1 Exhibit 10.1 AMENDMENT NO. 4 TO LOAN AGREEMENT --------------------------------- AGREEMENT, made as of the 15th day of April, 2002, by and among: HEALTH CARE REIT, INC., a Delaware corporation, and each of the other entities listed on Exhibit 1 annexed hereto (individually, a "BORROWER" and collectively, THE "BORROWERS"); The Banks that have executed the signature pages hereto (individually, a "BANK" and, collectively, the "BANKS"); and KEY CORPORATE CAPITAL INC., a Michigan corporation, as Agent for the Banks (in such capacity, together with its successors in such capacity, the "AGENT"). W I T N E S S E T H: WHEREAS: (A) The Borrowers, the Agent and the Banks entered into a certain Loan Agreement dated as of March 28, 1997 (as amended by (i) Amendment No. 1 to Loan Agreement dated as of October 1, 1998, (ii) Amendment No. 2 to Loan Agreement dated as of January 29, 2001, and (iii) Amendment No. 3 to Loan Agreement dated as of October 5, 2001, the "ORIGINAL LOAN AGREEMENT"; the Original Loan Agreement, as amended hereby, and as it may hereafter be further amended, modified or supplemented, is hereinafter referred as the "LOAN AGREEMENT"); (B) The Borrowers wish to amend the definition of the "Borrowing Base" in the Original Loan Agreement and the Banks and the Agent are willing to amend the Original Loan Agreement as hereinafter set forth; and (C) All capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed thereto in the Original Loan Agreement. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1. AMENDMENTS TO ORIGINAL LOAN AGREEMENT. (a) The definition of "Borrowing Base" appearing in Article 1 of the Original Loan Agreement is hereby amended by deleting clause (i)(G) thereof in its entirety, deleting the comma at the end of clause (i)(E) thereof, and inserting "; and" therefor, and deleting "; and" at the end of clause (i)(F) thereof and inserting a comma therefor. (b) All references in the Original Loan Agreement and the other Loan Documents to the "Loan Agreement", and also in the case of the Original Loan Agreement to "this Agreement", shall be deemed to refer to the Original Loan Agreement, as amended hereby. (c) The Original Loan Agreement and the other Loan Documents shall each be deemed amended and supplemented hereby to the extent necessary, if any, to give effect to the provisions of this Agreement. ARTICLE 2. REPRESENTATIONS AND WARRANTIES. (a) The Borrowers hereby confirm, reaffirm and restate to each of the Banks and the Agent all of the representations and warranties set forth in Article 3 of the Original Loan Agreement as if such representations and warranties were made as of the date hereof, except for changes in the ordinary course of business which, either singly or in the aggregate, would not have a Material Adverse Effect. (b) (i) The execution, delivery and performance by each Borrower of this Amendment No. 4 are within its organizational powers and have been duly authorized by all necessary action (corporate or otherwise) on the part of each Borrower, (ii) this Amendment No. 4 is the legal, valid and binding obligation of each Borrower, enforceable against each Borrower in accordance with its respective terms, and (iii) the execution, delivery and performance by each Borrower of this Amendment No. 4 does not: (A) contravene the terms of any Borrower's organizational documents, (B) conflict with or result in a breach or contravention of, or the creation of any lien under, any document evidencing any contractual obligation to which any Borrower is a party or any order, injunction, writ or decree to which any Borrower or its property is subject, or (C) violate any requirement of law. ARTICLE 3. ACKNOWLEDGEMENT. The Borrowers hereby acknowledge that $35,000,000 was borrowed under the Loan Agreement on April 1, 2002, the proceeds of which were used to repay certain existing unsecured debt set forth in Paragraph III on Schedule 7.1 to the Loan Agreement, as permitted under subsection 7.8(d) of the Loan Agreement. ARTICLE 4. MISCELLANEOUS. SECTION 4.1 ARTICLE 10 OF THE ORIGINAL LOAN AGREEMENT. The miscellaneous provisions under Article 10 of the Original Loan Agreement, together with the definition of all terms used therein, and all other sections of the Original Loan Agreement to which Article 10 refers are hereby incorporated by reference as if the provisions thereof were set forth in full herein, except that (i) the term "Loan Agreement" shall be deemed to refer to the Original Loan Agreement, as amended hereby, (ii) the term "this Agreement" shall be deemed to refer to this Agreement; and (iii) the terms "hereunder" and "hereto" shall be deemed to refer to this Agreement. SECTION 4.2 CONTINUED EFFECTIVENESS. Except as amended hereby, the Original Loan Agreement and the other Loan Documents are hereby ratified and confirmed in all respects and shall remain in full force and effect in accordance with their respective terms. SECTION 4.3 COUNTERPARTS. This Agreement may be executed by the parties hereto in one or more counterparts, each of which shall be an original and all of which shall constitute one and the same agreement. 2 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date first above written. HEALTH CARE REIT, INC. HCRI PENNSYLVANIA PROPERTIES, INC. HCRI OVERLOOK GREEN, INC. HCRI TEXAS PROPERTIES, INC. HCRI TEXAS PROPERTIES, LTD. BY HEALTH CARE REIT, INC., ITS GENERAL PARTNER HCRI NEVADA PROPERTIES, INC. HCRI LOUISIANA PROPERTIES, L.P. BY HCRI SOUTHERN INVESTMENTS I, INC., ITS GENERAL PARTNER HEALTH CARE REIT INTERNATIONAL, INC. HCN ATLANTIC GP, INC. HCN ATLANTIC LP, INC. HCN BCC HOLDINGS, INC. HCRI INDIANA PROPERTIES, INC. HCRI INDIANA PROPERTIES, LLC BY HEALTH CARE REIT, INC., ITS MEMBER HCRI LIMITED HOLDINGS, INC. HCRI MASSACHUSETTS PROPERTIES, INC. HCRI MASSACHUSETTS PROPERTIES TRUST BY HCRI MASSACHUSETTS PROPERTIES, INC. ITS TRUSTEE HCRI HOLDINGS TRUST BY HCRI MASSACHUSETTS PROPERTIES, INC. ITS TRUSTEE HCRI NORTH CAROLINA PROPERTIES, LLC BY HEALTH CARE REIT, INC. ITS MEMBER HCRI SOUTHERN INVESTMENTS I, INC. HCRI TENNESSEE PROPERTIES, INC. PENNSYLVANIA BCC PROPERTIES, INC. BY: /S/ GEORGE L. CHAPMAN --------------------------------------- CHIEF EXECUTIVE OFFICER GEORGE L. CHAPMAN, as Chief Executive Officer of all of the aforementioned entities, has executed this Amendment No. 4 to Loan Agreement and intending that all entities above named are bound and are to be bound by the one signature as if he had executed this Amendment No. 4 to Loan Agreement separately for each of the above named entities. KEY CORPORATE CAPITAL INC., AS AGENT AND AS A BANK BY: /S/ F. D. KELLY III VICE PRESIDENT ------------------------------------ TITLE Lending Office for Base Rate Loans and LIBOR Loans: Key Corporate Capital Inc. 127 Public Square, MC:OH-01-27-0605 Cleveland, Ohio 44114 Attention: Healthcare Administrative Assistant Address for Notices: Key Corporate Capital Inc. 127 Public Square, MC:OH-01-27-0605 Cleveland, Ohio 44114 Attention: Ms. Angela Mago Telecopier: (216) 689-5970 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement FLEET NATIONAL BANK AS SYNDICATION AGENT AND AS A BANK BY: /S/ JOHN C. AUTH VICE PRESIDENT ---------------------------------------------- TITLE Lending Office for Base Rate Loans and LIBOR Loans: Fleet National Bank 1185 Avenue of the Americas New York, New York 10036 Attention: Mr. John C. Auth Address for Notices: Fleet National Bank 1185 Avenue of the Americas New York, New York 10036 Attention: Mr. John C. Auth Telecopier: (212) 819-4112 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement HARRIS TRUST AND SAVINGS BANK BY: /S/ EDWARD MCGUIRE VICE PRESIDENT ------------------------------------------- TITLE Lending Office for Base Rate Loans and LIBOR Loans: Harris Trust and Savings Bank 111 West Monroe Chicago, Illinois 60603 Attention: Edward McGuire Address for Notices: Harris Trust and Savings Bank 111 West Monroe Chicago, Illinois 60603 Attention: Edward McGuire Telecopier: (312) 293-5852 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement COMERICA BANK BY: /S/ JEFFREY R. GARDNER ACCOUNT OFFICER ------------------------------------------ TITLE Lending Office for Base Rate Loans and LIBOR Loans: Comerica Bank Comerica Tower at Detroit Center 500 Woodward Avenue Detroit, Michigan 48226 Attention: Jeffrey Gardner Address for Notices: Comerica Bank Comerica Tower at Detroit Center 500 Woodward Avenue Detroit, Michigan 48226 Attention: Jeffrey Gardner Telecopier: (313) 222-3420 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement BANK OF AMERICA BY: /S/ KEVIN WAGLEY PRINCIPAL ----------------------------------------- TITLE Lending Office for Base Rate Loans and LIBOR Loans: Bank of America 100 North N. Tryon Street Charlotte, North Carolina 28255-0001 Attention: Mr. Kevin Wag Address for Notices: Bank of America 100 North N. Tryon Street Charlotte, North Carolina 28255-0001 Attention: William Duke Telecopier: (704) 388-6002 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement BANK ONE, N.A. BY /S/ JAN E. PETRIK FIRST VICE PRESIDENT ------------------------------------------ TITLE Lending Office for Base Rate Loans and LIBOR Loans: Bank One, N.A. 600 Superior Cleveland, Ohio 44114 Attention: Commercial Loan Operations Address for Notices: Bank One, N.A. Commercial Banking 600 Superior Cleveland, Ohio 44114 Attention: Ms. Jan Petrik Telecopier: (216) 781-4567 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement NATIONAL CITY BANK BY: /S/ DOUGLAS L. BOX SENIOR VICE PRESIDENT --------------------------------------------- TITLE Lending Office for Base Rate Loans and LIBOR Loans: National City Bank 405 Madison Avenue Toledo, Ohio 43604 Attention: Mr. Douglas Box Address for Notices: National City Bank 405 Madison Avenue Toledo, Ohio 43604 Attention: Mr. Douglas Box Telecopier: (419) 259-6666 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement MANUFACTURERS AND TRADERS TRUST COMPANY BY: /S/ C. GREGORY VOGELSANG ASSISTANT VICE PRESIDENT -------------------------------------------------------- TITLE Lending Office for Base Rate Loans and LIBOR Loans: M & T Center One Fountain Plaza, 12th Floor Buffalo, New York 14203-1495 Attention: Mr. C. Gregory Vogelsang Address for Notices: M & T Center One Fountain Plaza, 12th Floor Buffalo, New York 14203-1495 Attention: Mr. Gregory Vogelsang Telecopier: (716) 848-7318 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement KBC N.V. BY: /S/ JEAN-PIERRE DIELS FIRST VICE PRESIDENT ------------------------------------------------- TITLE BY: /S/ ERIC RASKIN VICE PRESIDENT ------------------------------------------------- TITLE Lending Office for Base Rate Loans and LIBOR Loans: KBC N.V. 125 West 55th Street New York, New York 10019 Attention: Coralie Van Wilder Address for Notices: KBC N.V. 125 West 55th Street New York, New York 10019 Attention: Coralie Van Wilder Telecopier: (212) 541-0793 Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement EXHIBIT 1 TO AMENDMENT NO. 4 TO LOAN AGREEMENT BY AND AMONG HEALTH CARE REIT, INC. AND ITS SUBSIDIARIES, THE BANKS SIGNATORY HERETO AND KEY CORPORATE CAPITAL INC., AS AGENT ------------------------------------ LIST OF BORROWERS ----------------- NAME OF BORROWER STATE OF ORGANIZATION - ---------------- --------------------- Health Care REIT, Inc. Delaware HCRI Pennsylvania Properties, Inc. Pennsylvania HCRI Overlook Green, Inc. Pennsylvania HCRI Texas Properties, Inc. Delaware HCRI Texas Properties, Ltd. Texas HCRI Louisiana Properties, L.P. Delaware Health Care REIT International, Inc.. Delaware HCN Atlantic GP, Inc. Delaware HCN Atlantic LP, Inc. Delaware HCRI Nevada Properties, Inc. Nevada HCN BCC Holdings, Inc. Delaware HCRI Holdings Trust Massachusetts HCRI Indiana Properties, Inc. Delaware HCRI Indiana Properties, LLC Indiana HCRI Limited Holdings, Inc. Delaware HCRI Massachusetts Properties Trust Massachusetts HCRI Massachusetts Properties, Inc. Delaware HCRI North Carolina Properties, LLC Delaware HCRI Southern Investments I, Inc. Delaware HCRI Tennessee Properties, Inc. Delaware Pennsylvania BCC Properties, Inc. Pennsylvania Health Care REIT, Inc. Signature Page to Amendment No. 4 to Loan Agreement EX-99.1 4 l93886aex99-1.txt EXHIBIT 99.1 [HEALTHCARE REIT LETTERHEAD] Exhibit 99.1 F O R I M M E D I A T E R E L E A S E April 10, 2002 For more information contact: Ray Braun - (419) 247-2800 Mike Crabtree - (419) 247-2800 HEALTH CARE REIT, INC. ANNOUNCES INVESTMENTS OF $101.7 MILLION FOR FIRST QUARTER FIRST QUARTER CONFERENCE CALL SET FOR MAY 3, 2002 Toledo, Ohio, April 10, 2002..... HEALTH CARE REIT, INC. (NYSE/HCN) announced today that it had completed $101.7 million of new investments during the first quarter of 2002. The investment activity during the quarter was approximately 99% real property investments. Facility-based investments were about 64% assisted living facilities, 35% skilled nursing facilities and 1% specialty care facilities. Aggregate funding was provided to 11 operators in 17 states. The company also confirmed that it would release its 2002 first quarter earnings on Thursday May 2, 2002, after the market closes. At 10:00 a.m. Eastern Time on May 3, 2002, the company will hold a conference call to discuss its results and performance for the first quarter. The conference call will be accessible by telephone and through the Internet. Telephone access will be available by dialing 703-871-3599 or 877-817-7175. 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 3, 2002 through May 10, 2002. To access the rebroadcast, dial 703-925-2435 or 888-266-2086. The conference ID number is 5924823. To participate via the webcast, log on to www.hcreit.com or www.ccbn.com 15 minutes before the call to download the necessary software. Replay 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 skilled nursing and assisted living facilities. At December 31, 2001, the company had investments in 214 health care facilities in 33 states and had total assets of approximately $1.3 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com. INVESTMENTS FOR 2002 FIRST QUARTER 2002 CONFERENCE CALL APRIL 10, 2002 - ------------------------------------------------------------------------------- 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. ##### Page 2 of 2 EX-99.2 5 l93886aex99-2.txt EXHIBIT 99.2 [HEALTH CARE REIT LETTERHEAD] Exhibit 99.2 F O R I M M E D I A T E R E L E A S E April 16, 2002 For more information contact: Ray Braun (419) 247-2800 Mike Crabtree (419) 247-2800 HEALTH CARE REIT, INC. DECLARES REGULAR DIVIDEND Toledo, Ohio, April 16, 2002...HEALTH CARE REIT, INC. (NYSE/HCN) announced today that its Board of Directors declared a dividend for the quarter ended March 31, 2002, of $0.585 per share. The dividend represents the 124th consecutive dividend payment. The dividend will be payable May 20, 2002, to shareholders of record on April 30, 2002. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. At December 31, 2001, the company had investments in 214 health care facilities in 33 states and had total assets of approximately $1.3 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com. ##### PAGE 1 OF 1 EX-99.3 6 l93886aex99-3.txt EXHIBIT 99.3 Exhibit 99.3 [HEALTHCARE REIT LETTERHEAD] F O R I M M E D I A T E R E L E A S E MAY 2, 2002 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 2, 2002........HEALTH CARE REIT, INC. (NYSE/HCN) today announced operating results for its first quarter of 2002. The company continues to meet its financial and operational expectations. "We had a very productive first quarter," commented George L. Chapman, chairman and chief executive officer. "We completed investments totaling $101.7 million and continue to see attractive investment opportunities. Moreover, capital remains reasonable and accessible as evidenced by our recent sale of shares to a real estate fund that yielded net proceeds of $23.6 million. We believe that the combination of attractive investment opportunities and supportive capital markets bodes well for the company." As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2002, of $.585 per share. The dividend represents the 124th consecutive dividend payment. The dividend will be payable May 20, 2002, to shareholders of record on April 30, 2002.
SUMMARY OF FIRST QUARTER RESULTS - -------------------------------- (In thousands, except per share numbers) - --------------------------------------------- ---------------------------- ------------------------------ THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 2002 MARCH 31, 2001 - --------------------------------------------- ---------------------------- ------------------------------ Revenues $37,395 $32,577 - --------------------------------------------- ---------------------------- ------------------------------ Net Income Available to Common Shareholders $12,511 $11,827 - --------------------------------------------- ---------------------------- ------------------------------ Funds From Operations (FFO) $21,188 $18,479 - --------------------------------------------- ---------------------------- ------------------------------ Net Income Per Diluted Share $0.37 $0.41 - --------------------------------------------- ---------------------------- ------------------------------ FFO Per Diluted Share $0.63 $0.64 - --------------------------------------------- ---------------------------- ------------------------------ Dividend Per Share $0.585 $0.585 - --------------------------------------------- ---------------------------- ------------------------------ FFO Payout Ratio 93% 91% - --------------------------------------------- ---------------------------- ------------------------------
Funds from operations (FFO), the generally accepted measure of operating performance for the real estate investment trust industry, totaled $21.2 million, or $0.63 per diluted share, for the three months ended March 31, 2002, compared with $18.5 million, or $0.64 per diluted share, for the same period in 2001. The company had a total outstanding debt balance of $571 million at March 31, 2002, as compared with $430 million at March 31, 2001, and shareholders' equity of $782 million, which represents a debt to total capitalization ratio of 42 percent. For the first three months of 2002, the company's coverage ratio of EBITDA to interest was 3.61 to 1.00. PORTFOLIO UPDATE. The portfolio results met the company's expectations. The seasoning of the assisted living portfolio is on target. The company ended the year with 18 assisted living facilities remaining in fill-up representing 13 percent of revenues. Only four assisted living facilities have occupancy less than 50 percent. Page 1 of 9 1Q02 EARNINGS RELEASE MAY 2, 2002 - ------------------------------------------------------------------------------- OUTLOOK FOR 2002. Based upon the investment activity for the first quarter, the company expects to report FFO in the range of $2.64 to $2.68 per share for the full year 2002. CONFERENCE CALL INFORMATION. Health Care REIT has scheduled a conference call on May 3, 2002, at 10:00 A.M. EST to discuss its first quarter 2002 performance, industry trends, portfolio performance, and its outlook for the remainder of 2002. To participate on the webcast, log on to www.hcreit.com or www.ccbn.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, 2002, the company had investments in 226 health care facilities in 34 states and had total assets of approximately $1.4 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. These forward-looking statements concern the possible expansion of our portfolio; the performance of our operators and properties; our ability to obtain new viable tenants for properties which we take back from financially troubled tenants, if any; our ability to make distributions; our policies and plans regarding investments, financings and other matters; our tax status as a real estate investment trust; our ability to appropriately balance the use of debt and equity; and our ability to access capital markets or other sources of funds. When we use words such as "believes", "expects", "anticipates", or similar expressions, we are making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including: the status of the economy; the status of capital markets, including prevailing interest rates; compliance with and changes to regulations and payment policies within the health care industry; changes in financing terms; competition within the health care and senior housing industries; and changes in federal, state and local legislation. Finally, we assume no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements. FINANCIAL SCHEDULES FOLLOW ##### Page 2 of 9 1Q02 EARNINGS RELEASE MAY 2, 2002 - ------------------------------------------------------------------------------- HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS)
MARCH 31 ----------------------------------------- 2002 2001 ----------------------------------------- ASSETS Real estate investments: Real property owned Land $ 98,901 $ 77,109 Buildings & improvements 1,044,243 792,745 Construction in progress 0 7,641 -------------- -------------- 1,143,144 877,495 Less accumulated depreciation (89,221) (59,754) -------------- -------------- Total real property owned 1,053,923 817,741 Loans receivable Real property loans 240,128 268,377 Subdebt investments 24,212 22,225 -------------- -------------- 264,340 290,602 Less allowance for losses on loans receivable (7,111) (6,111) -------------- -------------- 257,229 284,491 -------------- -------------- Net real estate investments 1,311,152 1,102,232 Other assets: Equity investments 6,550 5,501 Deferred loan expenses 6,823 3,915 Cash and cash equivalents 8,122 2,537 Receivables and other assets 36,333 27,096 -------------- -------------- 57,828 39,049 -------------- -------------- TOTAL ASSETS $ 1,368,980 $ 1,141,281 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Borrowings under line of credit obligations $ 78,000 $ 110,300 Senior unsecured notes 412,250 255,000 Secured debt 81,123 64,835 Accrued expenses and other liabilities 16,047 16,311 -------------- -------------- Total liabilities $ 587,420 $ 446,446 Shareholders' equity: Preferred Stock 150,000 150,000 Common Stock 33,947 28,881 Capital in excess of par value 637,920 529,417 Cumulative net income 528,725 467,491 Cumulative dividends (563,473) (475,907) Accumulated other comprehensive income (995) (994) Unamortized restricted stock (4,564) (4,053) -------------- -------------- TOTAL SHAREHOLDERS' EQUITY $ 781,560 $ 694,835 -------------- -------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,368,980 $ 1,141,281 ============== ==============
Page 3 of 9 1Q02 EARNINGS RELEASE MAY 2, 2002 - ------------------------------------------------------------------------------- HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31 ------------------------------------------ 2002 2001 -------------------- --------------------- Revenues: Operating lease rents $ 30,051 $ 22,608 Interest income 6,787 8,945 Commitment fees and other income 557 890 Prepayment fees 0 134 -------------- -------------- Gross Revenues 37,395 32,577 Expenses: Interest expense $ 9,742 $ 8,112 Provision for depreciation 8,677 6,786 General and administrative 2,261 1,851 Loan expense 577 375 Provision for losses 250 250 -------------- -------------- Total Expenses 21,507 17,374 -------------- -------------- Net Income 15,888 15,203 Preferred stock dividends 3,377 3,376 -------------- -------------- Net Income available to Common Shareholders $ 12,511 $ 11,827 ============== ============== Average number of common shares outstanding: Basic 32,946 28,617 Diluted 33,693 28,871 Net income per share: Basic $ 0.38 $ 0.41 Diluted 0.37 0.41 Funds from operations: $ 21,188 $ 18,479 Funds from operations per share: Basic $ 0.64 $ 0.65 Diluted 0.63 0.64 Dividends per share $ 0.585 $ 0.585
Page 4 of 9 1Q02 EARNINGS RELEASE MAY 2, 2002 - ------------------------------------------------------------------------------- HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT - MARCH 31, 2002
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1 - ------------------------------ BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance -------------------- ------------------- -------------------- ----------------- Real Property 188 15,797 $ 1,053,923 80% Loans Receivable 38 4,528 240,128 18% Subdebt Investments 0 0 24,212 2% -------------------- ------------------- -------------------- ----------------- Total Investments 226 20,325 $ 1,318,263 100% INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Assisted Living Facilities 159 10,607 $ 837,683 63% Skilled Nursing Facilities 60 8,413 402,225 30% Specialty Care Facilities 7 1,305 89,215 7% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 226 20,325 $ 1,329,123 100% INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (1) % Investment -------------------- ------------------- -------------------- ----------------- Publicly Traded 71 3,977 $ 254,435 19% Key Private 83 8,764 621,199 47% Privately Held 72 7,584 453,489 34% -------------------- ------------------- -------------------- ----------------- Real Estate Investments 226 20,325 $ 1,329,123 100%
NOTES: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,318,263,000 AND $10,860,000, RESPECTIVELY.
REVENUE COMPOSITION ($000'S) EXHIBIT 2 - ---------------------------- Three Months Ended March 31, 2002 Year-to-Date ---------------------------------- ------------------------------ REVENUE BY INVESTMENT TYPE Real Property $ 30,338 81% Loans Receivable & Other 6,566 18% (Not Applicable) Subdebt Investments 491 1% ------------------ --------------- ------------------------------ Total $ 37,395 100% REVENUE BY FACILITY TYPE Assisted Living Facilities $ 23,749 63% Nursing Homes 12,312 33% Specialty Care Facilities 1,334 4% ------------------ --------------- ------------------------------ Total $ 37,395 100% REVENUE BY OWNER TYPE Publicly Traded $ 7,788 21% Key Private 18,812 50% Privately Held 10,795 29% ------------------ --------------- ------------------------------ Total $ 37,395 100%
Page 5 of 9 1Q02 EARNINGS RELEASE MAY 2, 2002 - -------------------------------------------------------------------------------
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 - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2002 $ 0 $ 815 $ 815 2% 2003 3,670 0 3,670 2% 2004 410 2,223 2,633 2% 2005 0 4,715 4,715 2% 2006 5,044 5,065 10,109 7% Thereafter 114,173 16,465 130,638 85% ------------------------ ------------------------ ----------------------- ------------------- Total $ 123,297 $ 29,283 $ 152,580 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED
COMMITTED INVESTMENT BALANCES EXHIBIT 4 - ------------------------------ ($000'S EXCEPT INVESTMENT PER BED/UNIT) Committed Balance Investment per # Properties # Beds/Units (1) Bed/Unit -------------------- ------------------- -------------------- ------------------ Assisted Living Facilities 159 10,607 $ 839,107 $ 79,109 Skilled Nursing Facilities 60 8,413 402,225 47,810 Specialty Care Facilities 7 1,305 89,215 68,364 -------------------- ------------------- -------------------- ------------------ Total 226 20,325 $ 1,330,547 -na-
NOTES: (1) COMMITTED BALANCE INCLUDES GROSS 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 21 $ 149,550 11% Alterra Healthcare 46 109,955 8% Home Quality Management 18 109,106 8% Commonwealth 7 95,820 7% Life Care Centers of America, Inc. 13 83,841 6% Remaining Operators 121 780,851 60% ----------------------- ---------------------- ----------------------- Total 226 $ 1,329,123 100% CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Merrill Gardens 21 $ 3,711 10% Alterra Healthcare 46 3,639 10% Home Quality Management 18 3,164 8% Life Care Centers of America, Inc. 13 2,437 6% Atria Senior Quarters 9 2,356 6% Remaining Operators 119 22,088 60% ----------------------- ---------------------- ----------------------- Total 226 $ 37,395 100%
NOTES: (1) THREE MONTHS ENDED MARCH 31, 2002 Page 6 of 9 1Q02 EARNINGS RELEASE MAY 2, 2002 - -------------------------------------------------------------------------------
SELECTED FACILITY DATA EXHIBIT 6 - ---------------------- Coverage Data ---------------------------------- % Payor Mix ------------------------------------ Before After Census Private Medicare Mgt. Fees Mgt. Fees ------------------ ------------------------------------ ------------------ --------------- Assisted Living Facilities 86% 100% 0% 1.29x 1.11x Nursing Homes 84% 20% 13% 1.77x 1.32x Specialty Care Facilities 58% 19% 31% 2.06x 1.47x ------------------ --------------- Weighted Averages 1.51x 1.20x SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7 - ------------------------------------------------- Balance % Investment --------------- ----------------- Cross Defaulted $ 1,258,346 95% of gross real estate investments Cross Collateralized 202,908 86% of mortgage loans CURRENT CAPITALIZATION ($000'S) Balance % Balance LEVERAGE & PERFORMANCE RATIOS - ------------------------------- --------------- ----------------- ---------------------------------------- Borrowings Under Bank Lines $ 78,000 6% Debt/Total Book Cap 42% Long-Term Debt Obligations 493,373 36% Debt/Total Mkt. Cap 34% Shareholders' Equity 781,610 58% Interest Coverage 3.61x 1st Qtr. --------------- ----------------- Total Book Capitalization $ 1,352,983 100% 3.82x L12M FFO Payout Ratio 93% 1st Qtr. 94% L12M DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 8 - ----------------------------------------------- Year Lines of Credit (1) Senior Notes Secured Debt (1) Total - ------------------- ------------------------ ------------------------ ----------------------- ------------------- 2002 $ 25,000 $ 12,250 $ 368 $ 37,618 2003 150,000 35,000 400 185,400 2004 0 40,000 64,474 104,474 2005 0 0 862 862 2006 0 50,000 398 50,398 2007 0 175,000 430 175,430 2008 0 100,000 464 100,464 Thereafter 0 0 44,727 44,727 ------------------------ ------------------------ ----------------------- ------------------- Total $ 175,000 $ 412,250 $ 112,123 $ 699,373
NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY Page 7 of 9
INVESTMENT ACTIVITY ($000'S) EXHIBIT 9 ---------------------------- Three Months Ended March 31, 2002 Year-to-Date --------------------------------- --------------------------------- FUNDING BY INVESTMENT TYPE Real Property $ 99,907 98% Mortgage & Other Loans 738 1% (Not Applicable) Subdebt Investments 1,052 1% ----------------- --------------- -------------------------------- Total $ 101,697 100% REAL ESTATE INVESTMENTS Assisted Living Facilities $ 63,430 63% Nursing Homes 35,880 36% Specialty Care Facilities 1,335 1% ----------------- --------------- -------------------------------- Total $ 100,645 100% GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10 - --------------------------------- CONCENTRATION BY REGION # Properties Investment % Investment ----------------------- ---------------------- ----------------------- South 126 $ 589,672 44% Northeast 35 300,329 23% West 33 236,298 18% Midwest 32 202,824 15% ----------------------- ---------------------- ----------------------- Total 226 $ 1,329,123 100% CONCENTRATION BY STATE # Properties Investment % Investment ----------------------- ---------------------- ----------------------- Massachusetts 15 $ 149,415 11% Florida 30 149,125 11% Ohio 13 106,721 8% Texas 29 100,549 8% California 11 88,181 7% Remaining States 128 735,132 55% ----------------------- ---------------------- ----------------------- Total 226 $ 1,329,123 100% REVENUE BY STATE (1) # Properties Revenue (1) % Revenue ----------------------- ---------------------- ----------------------- Florida 30 $ 3,816 10% Massachusetts 15 3,556 10% Ohio 13 2,229 6% Texas 29 2,715 7% California 11 1,807 5% Remaining States 128 23,272 62% ----------------------- ---------------------- ----------------------- Total 226 $ 37,395 100%
NOTES: (1) THREE MONTHS ENDED MARCH 31, 2002 Page 8 of 9
FUNDS FROM OPERATIONS COMPUTATION ($000'S) EXHIBIT 11 - ------------------------------------------ Three Months Ended March 31, 2002 Year-to-Date ------------------------------- -------------------------- Net Income Available to Common Shareholders $ 12,511 Add: Depreciation Expense 8,677 Loss on Extinguishment 0 (Not Applicable) Net Loss on Sale of Properties 0 Deduct: Gain on Sale of Assets 0 Prepayment Fees 0 ---------------------------- ---------------------------- Funds From Operations (FFO) $ 21,188 Average Common Shares Outstanding: Basic 32,946 Diluted 33,693 FFO Per Common Share: Basic $ 0.64 Diluted $ 0.63 LEASE UP STATISTICS ON ASSISTED LIVING FACILITIES EXHIBIT 12 - ------------------------------------------------- OCCUPANCY FACILITIES MONTHS IN OPERATION REVENUE (1) % OF REVENUE ------------------- ----------------------- ----------------- ----------------- 00% - 50% 4 11.0 $ 1,192 3% 50% - 70% 6 22.0 $ 1,930 5% 70% + 8 24.9 $ 2,012 5%
NOTES: (1) INTEREST AND RENTAL INCOME FOR QUARTER ENDED MARCH 31, 2002. Page 9 of 9 EX-99.4 7 l93886aex99-4.txt EXHIBIT 99.4 [HEALTH CARE REIT LETTERHEAD] Exhibit 99.4 F O R I M M E D I A T E R E L E A S E May 3, 2002 For more information contact: Ray Braun - (419) 247-2800 Mike Crabtree - (419) 247-2800 HEALTH CARE REIT, INC. PROMOTES RAY BRAUN TO PRESIDENT Toledo, Ohio, May 3, 2002..... HEALTH CARE REIT, INC. (NYSE/HCN) announced today the promotion of Raymond W. Braun, executive vice president and chief financial officer, to president. In addition, he will maintain his current responsibilities as chief financial officer. In making the announcement, George L. Chapman, chairman and chief executive officer said, "Ray has been a key executive in driving Health Care REIT's growth and success. He has assumed responsibility in every critical area within the company, bringing his considerable talent and energy to each position. His work ethic, integrity and leadership have contributed to the company's success in the past and will continue to do so in the future. This appointment is a well deserved reward for his superior performance." Mr. Braun joined the company in 1993, serving as assistant vice president and assistant general counsel. In his nine years, he has also served as vice president-operations, executive vice president and chief operating officer, and most recently as chief financial officer. Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. At March 31, 2002, the company had investments in 226 health care facilities in 34 states and had total assets of approximately $1.4 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. These forward-looking statements concern the possible expansion of our portfolio; the performance of our operators and properties; our ability to obtain new viable tenants for properties which we take back from financially troubled tenants, if any; our ability to make distributions; our policies and plans regarding investments, financings and other matters; our tax status as a real estate investment trust; our ability to appropriately balance the use of debt and equity; and our ability to access capital markets or other sources of funds. When we use words such as "believes," expects," "anticipates," or similar expressions, we are making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including: the status of the economy; the status of capital markets, including prevailing interest rates; compliance with and changes to regulations and payment policies within the health care industry; changes in financing terms; competition within the health care and senior housing industries; and changes in federal, state and local legislation. Finally, we assume no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements. #### -----END PRIVACY-ENHANCED MESSAGE-----