-----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, TKTGcKHCuP+adXtDwL//uO1b+CGdWU139ugaWSA06gm/GWcZvoqiyAUdiDpO31AB 7K5NZ8SennX/eTVnAjRSTw== 0000950152-04-000673.txt : 20040202 0000950152-04-000673.hdr.sgml : 20040202 20040202151558 ACCESSION NUMBER: 0000950152-04-000673 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040202 ITEM INFORMATION: FILED AS OF DATE: 20040202 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08923 FILM NUMBER: 04559021 BUSINESS ADDRESS: STREET 1: ONE SEAGATE STE 1500 STREET 2: P O BOX 1475 CITY: TOLEDO STATE: OH ZIP: 43604 BUSINESS PHONE: 4192472800 8-K 1 l05382ae8vk.txt HEALTH CARE REIT, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of report (Date of earliest event reported): February 2, 2004 HEALTH CARE REIT, INC. (Exact name of registrant as specified in its charter) DELAWARE 1-8923 34-1096634 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or organization) Number) Identification Number) One SeaGate, Suite 1500, Toledo, Ohio 43604 (Address of principal executive office) (Zip Code) (419) 247-2800 (Registrant's telephone number, including area code) ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 2, 2004, Health Care REIT, Inc. issued a press release that announced operating results of its fourth quarter and year ended December 31, 2003. The press release is posted on the Company's Web site (www.hcreit.com) under the heading Press Releases. A copy of the press release has been furnished as Exhibit 99.1 to this Current Report. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant had duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. HEALTH CARE REIT, INC. By: /s/ GEORGE L. CHAPMAN ------------------------------ George L. Chapman Chairman of the Board and Chief Executive Officer Date: February 2, 2004 EXHIBIT INDEX DESIGNATION NUMBER UNDER EXHIBIT NO. ITEM 601 OF REGULATION S-K DESCRIPTION - ----------- -------------------------- ----------- 99.1 99 Press release dated February 2, 2004 EX-99.1 3 l05382aexv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 [HEALTH CARE REIT LOGO] F O R I M M E D I A T E R E L E A S E FEBRUARY 2, 2004 FOR MORE INFORMATION CONTACT: RAY BRAUN - (419) 247-2800 MIKE CRABTREE - (419) 247-2800 SCOTT ESTES - (419) 247-2800 HEALTH CARE REIT, INC. REPORTS FOURTH QUARTER AND YEAR END RESULTS INCREASES 2004 QUARTERLY DIVIDEND RATE Toledo, Ohio, February 2, 2004........HEALTH CARE REIT, INC. (NYSE/HCN) today announced operating results for its fourth quarter and year ended December 31, 2003. We continue to meet our financial and operational expectations. "Our overall performance for 2003 was exceptional," commented George L. Chapman, chief executive officer of Health Care REIT, Inc. "We expanded our credit facilities and successfully accessed the capital markets on several occasions, enabling us to complete a record $500 million in net investments. Adjusted FFO increased seven percent over 2002, driving down our adjusted FFO payout ratio to 81 percent for the fourth quarter. As a result of these successes, the Board of Directors approved an increase in the common stock dividend to $0.60 per quarter from $0.585 per quarter commencing with the May 2004 dividend." As previously announced, the Board of Directors declared a dividend for the quarter ended December 31, 2003 of $0.585 per share. The dividend represents the 131st consecutive dividend payment. The dividend will be payable February 20, 2004 to stockholders of record on January 30, 2004.
SUMMARY OF FOURTH QUARTER RESULTS (In thousands, except per share data) - ----------------------------------------------------------------------------------------------------- THREE MONTHS ENDED THREE MONTHS ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 - ----------------------------------------------------------------------------------------------------- Revenues $61,240 $43,380 - ----------------------------------------------------------------------------------------------------- Net Income Available to Common Stockholders $16,935 $12,303 - ----------------------------------------------------------------------------------------------------- Funds From Operations $33,206 $25,731 - ----------------------------------------------------------------------------------------------------- Funds From Operations - Adjusted $35,998 $27,479 - ----------------------------------------------------------------------------------------------------- Net Income Per Diluted Share $ 0.34 $ 0.31 - ----------------------------------------------------------------------------------------------------- FFO Per Diluted Share $ 0.66 $ 0.64 - ----------------------------------------------------------------------------------------------------- FFO Per Diluted Share - Adjusted $ 0.72 $ 0.69 - ----------------------------------------------------------------------------------------------------- Dividend Per Share $ 0.585 $ 0.585 - ----------------------------------------------------------------------------------------------------- FFO Payout Ratio 88% 91% - ----------------------------------------------------------------------------------------------------- FFO Payout Ratio - Adjusted 81% 85% - -----------------------------------------------------------------------------------------------------
PAGE 1 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 Net income available to common stockholders totaled $16.9 million, or $0.34 per diluted share, for the fourth quarter of 2003, compared with $12.3 million, or $0.31 per diluted share, for the same period in 2002. Funds from operations totaled $33.2 million, or $0.66 per diluted share, for the fourth quarter of 2003, compared with $25.7 million, or $0.64 per diluted share, for the same period in 2002. Adjusted funds from operations, which excludes non-cash impairment charges, totaled $36.0 million, or $0.72 per diluted share, for the fourth quarter of 2003, compared with $27.5 million, or $0.69 per diluted share, for the same period in 2002.
SUMMARY OF YEAR TO DATE RESULTS (In thousands, except per share data) - ----------------------------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 - ----------------------------------------------------------------------------------------------------- Revenues $201,031 $154,928 - ----------------------------------------------------------------------------------------------------- Net Income Available to Common Stockholders $ 70,732 $ 55,191 - ----------------------------------------------------------------------------------------------------- Funds From Operations $119,463 $ 96,573 - ----------------------------------------------------------------------------------------------------- Funds From Operations - Adjusted $125,045 $ 98,871 - ----------------------------------------------------------------------------------------------------- Net Income Per Diluted Share $ 1.60 $ 1.48 - ----------------------------------------------------------------------------------------------------- FFO Per Diluted Share $ 2.70 $ 2.59 - ----------------------------------------------------------------------------------------------------- FFO Per Diluted Share - Adjusted $ 2.83 $ 2.65 - ----------------------------------------------------------------------------------------------------- Dividend Per Share $ 2.34 $ 2.34 - ----------------------------------------------------------------------------------------------------- FFO Payout Ratio 87% 90% - ----------------------------------------------------------------------------------------------------- FFO Payout Ratio - Adjusted 83% 88% - -----------------------------------------------------------------------------------------------------
Net income available to common stockholders totaled $70.7 million, or $1.60 per diluted share, for the twelve months ended December 31, 2003, compared with $55.2 million, or $1.48 per diluted share, for the same period in 2002. Funds from operations totaled $119.5 million, or $2.70 per diluted share, for the twelve months ended December 31, 2003, compared with $96.6 million, or $2.59 per diluted share, for the same period in 2002. Adjusted funds from operations, which excludes the non-cash preferred stock redemption and impairment charges, totaled $125.0 million, or $2.83 per diluted share, for the twelve months ended December 31, 2003, compared with $98.9 million, or $2.65 per diluted share, for the same period in 2002. We had a total outstanding debt balance of $1.0 billion at December 31, 2003, as compared with $676.3 million at December 31, 2002, and stockholders' equity of $1.1 billion, which represents a debt to total book capitalization ratio of 47 percent. The debt to total market capitalization at December 31, 2003 was 34 percent. Our coverage ratio of EBITDA to interest was 3.50 to 1.00 for the twelve months ended December 31, 2003. EXPANSION OF UNSECURED LINE OF CREDIT. During December 2003 and January 2004, we expanded our unsecured revolving line of credit from $225 million to $310 million. The existing bank group, in conjunction with two new participants, First Tennessee Bank National Association and LaSalle Bank National Association, provided the additional capacity. DIVIDENDS FOR 2004. The Board of Directors approved a new quarterly dividend rate of $0.60 per share per quarter ($2.40 per share annually), commencing with the May 2004 dividend, up from $0.585, the rate during 2003. Our dividend policy is reviewed annually during the Board of Director's January planning session. The declaration and payment of quarterly dividends remains subject to the review and approval of our Board of Directors. PAGE 2 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 PORTFOLIO UPDATE. Five assisted living facilities stabilized during the quarter and one assisted living facility in fill-up was acquired. We ended the quarter with 13 assisted living facilities remaining in fill-up, representing six percent of revenues. Only two facilities, representing one percent of revenues, have occupancy of less than 50 percent. One facility opened in the third quarter after completion of construction and the other facility was the new acquisition. As previously announced, Alterra Healthcare Corporation (Alterra) filed for Chapter 11 bankruptcy protection on January 23, 2003. A joint venture between Fortress Investment Group LLC and Emeritus Corporation was the winning bidder at a bankruptcy auction held on July 17, 2003. The bankruptcy court confirmed Alterra's plan of reorganization on November 26, 2003. In connection with confirmation of Alterra's plan, our master lease was assumed and the acquisition of Alterra by the Fortress-Emeritus joint venture was approved. This transaction has closed. Alterra remained current on rental payments throughout the bankruptcy process and continues to remain current today. Also, as previously announced, Doctors Community Health Care Corporation and its subsidiaries (Doctors) filed for Chapter 11 bankruptcy protection on November 20, 2002. Pursuant to procedures approved by the bankruptcy court, the assets of Doctors were the subject of an auction held on December 10 through December 16, 2003. At the conclusion of that auction, the debtors' independent director declared certain members of Doctors' management the winning bidder. Their bid contemplates a reorganization of Doctors and its subsidiaries with new equity and debt capitalization. The results of this auction are subject to bankruptcy court approval, which the debtors have stated they intend to seek in connection with a hearing on the confirmation of the debtors' proposed plan of reorganization. Doctors anticipates that this hearing will occur in March 2004. Doctors did not make an interest payment for the twelve months ended December 31, 2003. Although we believe we are entitled to all accrued but unrecognized interest, we will not recognize any interest on the loan until confirmation of the bankruptcy plan. SUPPLEMENTAL REPORTING MEASURES. FFO stands for funds from operations, the generally accepted measure of operating performance for the real estate investment trust industry. EBITDA stands for earnings before interest, taxes, depreciation and amortization. We believe that FFO and EBITDA, along with net income and cash flow provided from operating activities, are important supplemental measures because they provide investors an indication of our ability to service debt, to make dividend payments and to fund other cash needs. We primarily utilize FFO to measure our payout ratio which represents dividends paid per share divided by FFO per diluted share. We primarily utilize EBITDA to measure our interest coverage ratio which represents EBITDA divided by interest expense. FFO and EBITDA do not represent net income or cash flow provided from operating activities as determined in accordance with generally accepted accounting principles and should not be considered as alternative measures of profitability or liquidity. Additionally, FFO and EBITDA, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see Exhibits 14 and 16 for reconciliations of FFO and EBITDA to net income. RECENT ACCOUNTING PRONOUNCEMENTS. In August, we lowered net income guidance as a result of the Securities and Exchange Commission (SEC) clarification of Emerging Issues Task Force (EITF) Topic D-42. To implement the clarified accounting pronouncement, our 2003 results reflect a reduction in net income available to common stockholders resulting from a non-cash, non-recurring charge of $2.79 million, or $0.06 per diluted share, due to the redemption of our 8.875% Series B Cumulative Redeemable Preferred Stock. The National Association of Real Estate Investment Trusts (NAREIT) has issued its recommendation that preferred stock redemption charges should not be added back to net income in the calculation of FFO. Although we have adopted this recommendation, we have also disclosed FFO adjusted for the preferred stock redemption charge for enhanced clarity. In October, NAREIT informed its member companies that the SEC is likely to change its position on certain aspects of the NAREIT FFO definition, including impairment charges. Previously, the SEC accepted NAREIT's view that impairment charges are effectively an early recognition of an expected loss on an impending sale of property and thus should be excluded from FFO similar to other gains and losses on sales. However, the SEC's clarified interpretation is that recurring impairments taken on real property may not be added back to net income in the calculation of FFO. Although we have adopted this interpretation, we have also disclosed FFO adjusted for the impairment charges for enhanced clarity. This modification of FFO does not impact our net income. PAGE 3 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 OUTLOOK FOR 2004. We are revising our 2004 guidance and expect to report net income available to common stockholders in the range of $1.68 to $1.73 per diluted share, and FFO in the range of $2.99 to $3.04 per diluted share. The adjustment to our previous guidance reflects the anticipated temporary dilution from the excess cash generated by the $250 million senior notes issued in fourth quarter 2003. The guidance assumes no change in our forecast for net investments of $200 million. Additionally, we plan to manage the company to maintain investment grade status with a capital structure consistent with our current profile. Please see Exhibit 15 for a reconciliation of the outlook for net income and FFO. CONFERENCE CALL INFORMATION. We have scheduled a conference call on February 2, 2004, at 11:00 A.M. EST to discuss our fourth quarter and year end 2003 results, industry trends, portfolio performance and outlook for 2004. To participate on the webcast, log on to www.hcreit.com or www.fulldisclosure.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same Web sites. This earnings release is posted on our Web site under the heading Press Releases. 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, 2003, we had investments in 328 health care facilities in 33 states with 47 operators and had total assets of approximately $2.2 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 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 enter into agreements with 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 "believe," "expect," "anticipate," 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, but not limited to: 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 4 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS)
DECEMBER 31 --------------------------------- 2003 2002 --------------------------------- ASSETS Real estate investments: Real property owned Land $ 166,408 $ 112,044 Buildings & improvements 1,712,868 1,288,520 Construction in progress 14,701 19,833 ----------- ----------- 1,893,977 1,420,397 Less accumulated depreciation (152,440) (113,579) ----------- ----------- Total real property owned 1,741,537 1,306,818 Loans receivable Real property loans 213,480 208,016 Subdebt investments 45,254 14,578 ----------- ----------- 258,734 222,594 Less allowance for losses on loans receivable (7,825) (4,955) ----------- ----------- 250,909 217,639 ----------- ----------- Net real estate investments 1,992,446 1,524,457 Other assets: Equity investments 3,299 7,494 Deferred loan expenses 10,331 9,291 Cash and cash equivalents 124,496 9,550 Receivables and other assets 52,159 43,318 ----------- ----------- 190,285 69,653 ----------- ----------- TOTAL ASSETS $ 2,182,731 $ 1,594,110 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Borrowings under unsecured lines of credit obligations $ 0 $ 109,500 Senior unsecured notes 865,000 515,000 Secured debt 148,184 51,831 Accrued expenses and other liabilities 19,868 20,547 ----------- ----------- Total liabilities 1,033,052 696,878 Stockholders' equity: Preferred stock 120,761 127,500 Common stock 50,298 40,086 Capital in excess of par value 1,069,887 790,838 Treasury stock (523) 0 Cumulative net income 660,446 580,496 Cumulative dividends (749,166) (638,085) Accumulated other comprehensive income 1 (170) Other equity (2,025) (3,433) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 1,149,679 897,232 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,182,731 $ 1,594,110 =========== ===========
PAGE 5 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED DECEMBER 31 DECEMBER 31 ----------------------------- ---------------------------- 2003 2002 2003 2002 ----------------------------- ---------------------------- Revenues: Rental income $ 54,748 $ 37,219 $ 176,504 $ 125,601 Interest income 4,841 5,503 20,768 26,525 Transaction fees and other income 1,651 658 3,759 2,802 Prepayment fees 0 0 0 0 --------- --------- --------- --------- Gross revenues 61,240 43,380 201,031 154,928 Expenses: Interest expense 17,063 11,206 54,144 39,432 Provision for depreciation 16,094 11,063 51,078 36,384 General and administrative 3,032 2,624 11,483 9,665 Loan expense 889 618 2,921 2,373 Impairment of assets 2,792 1,748 2,792 2,298 Loss on extinguishment of debt 0 0 0 403 Provision for loan losses 2,120 250 2,870 1,000 --------- --------- --------- --------- Total expenses 41,990 27,509 125,288 91,555 --------- --------- --------- --------- Income from continuing operations 19,250 15,871 75,743 63,373 Discontinued operations: Gain (loss) on sales of properties (173) (1,616) 4,139 (1,032) Income (loss) from discontinued operations, net 2 920 2,858 5,318 --------- --------- --------- --------- (171) (696) 6,997 4,286 --------- --------- --------- --------- Net income 19,079 15,175 82,740 67,659 Preferred dividends 2,144 2,872 9,218 12,468 Preferred stock redemption charge 0 0 2,790 0 --------- --------- --------- --------- Net income available to common stockholders $ 16,935 $ 12,303 $ 70,732 $ 55,191 ========= ========= ========= ========= Average number of common shares outstanding: Basic 49,440 39,403 43,572 36,702 Diluted 50,119 39,896 44,201 37,301 Net income available to common stockholders per share: Basic $ 0.34 $ 0.31 $ 1.62 $ 1.50 Diluted 0.34 0.31 1.60 1.48 Funds from operations $ 33,206 $ 25,731 $ 119,463 $ 96,573 Funds from operations - adjusted 35,998 27,479 125,045 98,871 Funds from operations per share: Basic $ 0.67 $ 0.65 $ 2.74 $ 2.63 Diluted 0.66 0.64 2.70 2.59 Funds from operations per share - adjusted: Basic $ 0.73 $ 0.70 $ 2.87 $ 2.69 Diluted 0.72 0.69 2.83 2.65 Dividends per share $ 0.585 $ 0.585 $ 2.34 $ 2.34
PAGE 6 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT - DECEMBER 31, 2003 - -------------------------------------------------------------------------------
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1 BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance ------------------------------------------------------------------------------ Real Property 304 26,904 $ 1,741,537 87% Loans Receivable 24 2,749 213,480 11% Subdebt Investments 0 0 45,254 2% ------------------------------------------------------------------------------ Total Investments 328 29,653 $ 2,000,271 100%
INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment ------------------------------------------------------------------------------ Assisted Living Facilities 219 14,193 $ 1,196,450 60% Skilled Nursing Facilities 101 14,256 648,354 32% Specialty Care Facilities 8 1,204 158,662 8% ------------------------------------------------------------------------------ Real Estate Investments 328 29,653 $ 2,003,466 100%
NOTES: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND CREDIT ENHANCEMENTS WHICH AMOUNTED TO $2,000,271,000 AND $3,195,000, RESPECTIVELY. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
REVENUE COMPOSITION ($000'S) EXHIBIT 2 Three Months Ended Year Ended December 31, 2003 December 31, 2003 -------------------------------- -------------------------------- REVENUE BY INVESTMENT TYPE (1) Real Property $ 56,293 92% $ 185,581 90% Loans Receivable 4,023 7% 19,240 9% Subdebt Investments 933 1% 2,093 1% -------------------------------- -------------------------------- Total $ 61,249 100% $ 206,914 100% REVENUE BY FACILITY TYPE (1) Assisted Living Facilities $ 37,826 62% $ 118,180 57% Skilled Nursing Facilities 19,857 32% 76,515 37% Specialty Care Facilities 3,566 6% 12,220 6% -------------------------------- -------------------------------- Total $ 61,249 100% $ 206,914 100%
NOTES: (1) REVENUES INCLUDE GROSS REVENUES AND REVENUES FROM DISCONTINUED OPERATIONS. - ------------------------------------------------------------------------------- PAGE 7 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 - -------------------------------------------------------------------------------
OPERATOR CONCENTRATION ($000'S) EXHIBIT 3 CONCENTRATION BY INVESTMENT # Properties Investment % Investment --------------------------------------------------------------- Emeritus Corporation 30 $ 232,018 12% Southern Assisted Living, Inc. 46 211,633 11% Commonwealth Communities L.L.C. 14 200,127 10% Home Quality Management, Inc. 25 143,113 7% Life Care Centers of America, Inc. 17 120,810 6% Remaining Operators (42) 196 1,095,765 54% --------------------------------------------------------------- Total 328 $ 2,003,466 100%
CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue --------------------------------------------------------------- Commonwealth Communities L.L.C. 14 $ 26,592 13% Home Quality Management, Inc. 25 14,886 7% Life Care Centers of America, Inc. 17 14,525 7% Merrill Gardens L.L.C. 12 14,397 7% Alterra Healthcare Corporation 45 14,293 7% Remaining Operators (42) 215 122,221 59% --------------------------------------------------------------- Total 328 $ 206,914 100%
NOTES: (1) YEAR ENDED DECEMBER 31, 2003. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 4 CONCENTRATION BY REGION # Properties Investment % Investment -------------- -------------- ------------ South 200 $ 1,002,502 50% Northeast 45 407,858 20% West 44 307,556 15% Midwest 39 285,550 15% -------------- -------------- ------------ Total 328 $ 2,003,466 100%
CONCENTRATION BY STATE # Properties Investment % Investment -------------- -------------- ------------ Massachusetts 24 $ 269,428 13% North Carolina 43 205,162 10% Florida 32 178,937 9% Ohio 14 129,293 6% Texas 29 118,341 6% Remaining States (28) 186 1,102,305 56% -------------- -------------- ------------ Total 328 $ 2,003,466 100%
REVENUE BY STATE # Properties Revenue (1) % Revenue -------------- -------------- ------------ Massachusetts 24 $ 32,587 16% Florida 32 20,849 10% Texas 29 15,807 8% North Carolina 43 12,790 6% Ohio 14 12,374 6% Remaining States (28) 186 112,507 54% -------------- -------------- ------------ Total 328 $ 206,914 100%
NOTES: (1) YEAR ENDED DECEMBER 31, 2003. - ------------------------------------------------------------------------------- PAGE 8 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 - -------------------------------------------------------------------------------
COMMITTED INVESTMENT BALANCES EXHIBIT 5 ($000'S EXCEPT INVESTMENT PER BED/UNIT) Committed Investment # Properties # Beds/Units Balance (1) per Bed/Unit ------------------------------------------------------------------------------- Assisted Living Facilities 219 14,193 $ 1,211,952 $ 85,391 Skilled Nursing Facilities 101 14,256 648,353 45,479 Specialty Care Facilities 8 1,204 158,662 131,779 ------------------------------------------------------------------------------- Total 328 29,653 $ 2,018,967 -na-
NOTES: (1) COMMITTED BALANCE INCLUDES GROSS REAL ESTATE INVESTMENTS, CREDIT ENHANCEMENTS AND UNFUNDED CONSTRUCTION COMMITMENTS FOR WHICH INITIAL FUNDING HAD COMMENCED. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
LEASE UP STATISTICS ON ASSISTED LIVING FACILITIES ($000'S) EXHIBIT 6 Average Months OCCUPANCY # Properties in Operation Revenue (1) % Revenue ------------------------------------------------------------------------------- 0% - 50% 2 2 $ 1,130 1% 50% - 70% 3 34 6,462 3% 70% + 8 33 5,649 2% ------------------------------------------------------------------------------- 13 -na- $ 13,241 6%
NOTES: (1) INTEREST AND RENTAL INCOME FOR THE YEAR ENDED DECEMBER 31, 2003. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
SELECTED FACILITY DATA EXHIBIT 7 Coverage Data % Payor Mix -------------------------------- ---------------------------- Before After Census Private Medicare Mgt. Fees Mgt. Fees -------------------------------------------------------------------------------- Assisted Living Facilities 85% 96% 0% 1.31x 1.10x Skilled Nursing Facilities 86% 17% 15% 1.75x 1.34x Specialty Care Facilities 67% 25% 32% 1.92x 1.48x -------------------------------- Weighted Averages 1.53x 1.23x
NOTES: DATA AS OF SEPTEMBER 30, 2003. - ------------------------------------------------------------------------------- PAGE 9 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 - -------------------------------------------------------------------------------
CREDIT SUPPORT ($000'S) EXHIBIT 8 Balance % Investment -------------------------------------------------------------------- Cross Defaulted $ 1,862,270 93% of gross real estate investments Cross Collateralized 168,519 79% of real property loans receivable Master Leases 1,398,615 80% of real property owned
CURRENT CAPITALIZATION ($000'S) LEVERAGE & PERFORMANCE RATIOS Balance % Balance --------------------------------- Borrowings Under Bank Lines $ 0 0% Debt/Total Book Cap 47% Long-Term Debt Obligations 1,013,184 47% Debt/Total Market Cap 34% Stockholders' Equity 1,149,679 53% Interest Coverage 3.20 x 4th Qtr. --------------------------------- 3.50 x YTD Total Book Capitalization $ 2,162,863 100% FFO Payout Ratio 88% 4th Qtr. 87% YTD FFO Payout Ratio 81% 4th Qtr. - Adjusted 83% YTD
- ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
REVENUE MATURITIES ($000'S) EXHIBIT 9 OPERATING LEASE EXPIRATIONS & LOAN MATURITIES Current Lease Current Interest Lease and Year Revenue (1) Revenue (1) Interest Revenue % of Total - ---------------------------------------------------------------------------------------------------------------- 2004 $ 1,894 $ 1,950 $ 3,844 2% 2005 330 2,219 2,549 1% 2006 0 5,409 5,409 2% 2007 0 6,769 6,769 3% 2008 0 1,514 1,514 1% Thereafter 209,749 6,904 216,653 91% ------------------------------------------------------------------------------------------ Total $ 211,973 $ 24,765 $ 236,738 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 10 Year Lines of Credit (1) Senior Notes Secured Debt (1) Total - --------------------------------------------------------------------------------------------------------------- 2004 $ 30,000 $ 40,000 $ 65,828 $ 135,828 2005 0 0 2,522 2,522 2006 310,000 50,000 2,703 362,703 2007 0 175,000 14,709 189,709 2008 0 100,000 9,879 109,879 2009 0 0 12,938 12,938 2010 0 0 8,948 8,948 Thereafter 0 500,000 90,657 590,657 ---------------------------------------------------------------------------------------- Total $ 340,000 $ 865,000 $ 208,184 $ 1,413,184
NOTES: (1) REFLECTED AT 100% CAPACITY. - ------------------------------------------------------------------------------- PAGE 10 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 - -------------------------------------------------------------------------------
INVESTMENT ACTIVITY ($000'S) EXHIBIT 11 Three Months Ended Year Ended December 31, 2003 December 31, 2003 ----------------------- ------------------------- FUNDING BY INVESTMENT TYPE Real Property $ 43,351 84% $ 520,396 90% Loans Receivable 7,576 15% 27,711 5% Subdebt Investments 690 1% 27,410 5% ----------------------- ------------------------- Total $ 51,617 100% $ 575,517 100% FUNDING BY FACILITY TYPE Assisted Living Facilities $ 15,798 31% $ 400,348 70% Skilled Nursing Facilities 23,908 46% 138,757 24% Specialty Care Facilities 11,911 23% 36,412 6% ----------------------- ------------------------- Total $ 51,617 100% $ 575,517 100%
- ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
DISPOSITION ACTIVITY ($000'S) EXHIBIT 12 Three Months Ended Year Ended December 31, 2003 December 31, 2003 ----------------------- ------------------------- DISPOSITIONS BY INVESTMENT TYPE Real Property $ 468 100% $ 45,217 60% Loans Receivable 30,631 40% ----------------------- ------------------------- Total $ 468 100% $ 75,848 100% DISPOSITIONS BY FACILITY TYPE Assisted Living Facilities $ 468 100% $ 66,578 88% Skilled Nursing Facilities 9,270 12% ----------------------- ------------------------- Total $ 468 100% $ 75,848 100%
- ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
DISCONTINUED OPERATIONS ($000'S) EXHIBIT 13 Three Months Ended Year Ended December 31 December 31 ------------------------ -------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ----------- REVENUES Rental income $ 9 $ 2,083 $ 5,883 $ 11,953 EXPENSES Interest expense 3 414 1,233 2,669 Provision for depreciation 4 749 1,792 3,966 ---------- ---------- ---------- ----------- Income (loss) from discontinued operations, net $ 2 $ 920 $ 2,858 $ 5,318
- ------------------------------------------------------------------------------- PAGE 11 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 - ------------------------------------------------------------------------------- FUNDS FROM OPERATIONS RECONCILIATION EXHIBIT 14 (Amounts in 000's except per share data)
Three Months Ended Year Ended December 31 December 31 --------------------------- ---------------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Net income available to common stockholders $ 16,935 $ 12,303 $ 70,732 $ 55,191 Provision for depreciation (1) 16,098 11,812 52,870 40,350 Loss (gain) on sales of properties 173 1,616 (4,139) 1,032 --------- --------- --------- --------- Funds from operations 33,206 25,731 119,463 96,573 Impairment of assets 2,792 1,748 2,792 2,298 Preferred stock redemption charge 0 0 2,790 0 --------- --------- --------- --------- Funds from operations - adjusted $ 35,998 $ 27,479 $ 125,045 $ 98,871 Average common shares outstanding: Basic 49,440 39,403 43,572 36,702 Diluted 50,119 39,896 44,201 37,301 Per share data: Net income available to common stockholders Basic $ 0.34 $ 0.31 $ 1.62 $ 1.50 Diluted 0.34 0.31 1.60 1.48 Funds from operations Basic $ 0.67 $ 0.65 $ 2.74 $ 2.63 Diluted 0.66 0.64 2.70 2.59 Funds from operations - adjusted Basic $ 0.73 $ 0.70 $ 2.87 $ 2.69 Diluted 0.72 0.69 2.83 2.65 FFO PAYOUT RATIO Dividends per share $ 0.585 $ 0.585 $ 2.34 $ 2.34 FFO per diluted share $ 0.66 $ 0.64 $ 2.70 $ 2.59 --------- --------- --------- --------- FFO payout ratio 88% 91% 87% 90% FFO PAYOUT RATIO - ADJUSTED Dividends per share $ 0.585 $ 0.585 $ 2.34 $ 2.34 FFO per diluted share - adjusted $ 0.72 $ 0.69 $ 2.83 $ 2.65 --------- --------- --------- --------- FFO payout ratio - adjusted 81% 85% 83% 88%
NOTES: (1) PROVISION FOR DEPRECIATION INCLUDES PROVISION FOR DEPRECIATION FROM DISCONTINUED OPERATIONS. - ------------------------------------------------------------------------------- PAGE 12 OF 13 4Q03 EARNINGS RELEASE FEBRUARY 2, 2004 - ------------------------------------------------------------------------------- FFO OUTLOOK RECONCILIATION EXHIBIT 15 (Amounts in 000's except per share data)
Year Ended December 31, 2004 ---------------------------- Low High -------- -------- Net income available to common stockholders $ 86,700 $ 89,300 Provision for depreciation (1) 68,000 68,000 -------- -------- Funds from operations $154,700 $157,300 Average common shares outstanding (diluted) 51,750 51,750 Per share data (diluted): Net income available to common stockholders $ 1.68 $ 1.73 Funds from operations 2.99 3.04
NOTES: (1) PROVISION FOR DEPRECIATION INCLUDES PROVISION FOR DEPRECIATION FROM DISCONTINUED OPERATIONS. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- EBITDA RECONCILIATION ($000'S) EXHIBIT 16
Three Months Ended Year Ended December 31 December 31 -------------------------- -------------------------- 2003 2002 2003 2002 -------- -------- -------- -------- Net income $ 19,079 $ 15,175 $ 82,740 $ 67,659 Provision for depreciation (1) 16,098 11,812 52,870 40,350 Interest expense (1) 17,066 11,620 55,377 42,101 Capitalized interest 407 170 1,535 170 Amortization (2) 1,102 967 3,957 3,928 Provision for loan losses 2,120 250 2,870 1,000 -------- -------- -------- -------- EBITDA $ 55,872 $ 39,994 $199,349 $155,208 INTEREST COVERAGE RATIO Interest expense (1) $ 17,066 $ 11,620 $ 55,377 $ 42,101 Capitalized interest 407 170 1,535 170 -------- -------- -------- -------- Total interest 17,473 11,790 56,912 42,271 EBITDA 55,872 39,994 199,349 155,208 -------- -------- -------- -------- Interest coverage ratio 3.20x 3.39x 3.50x 3.67x
NOTES: (1) PROVISION FOR DEPRECIATION AND INTEREST EXPENSE INCLUDE PROVISION FOR DEPRECIATION AND INTEREST EXPENSE FROM DISCONTINUED OPERATIONS. (2) AMORTIZATION INCLUDES AMORTIZATION OF DEFERRED LOAN EXPENSES, RESTRICTED STOCK AND STOCK OPTIONS. - ------------------------------------------------------------------------------- PAGE 13 OF 13 -----END PRIVACY-ENHANCED MESSAGE-----