EX-99.1 2 l26043aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
(HEALTHCARE LOGO)
FOR IMMEDIATE RELEASE
     
 
  May 7, 2007
 
  For more information contact:
 
  Scott Estes — (419) 247-2800
 
  Mike Crabtree — (419) 247-2800
Health Care REIT, Inc.
Reports First Quarter Results
Toledo, Ohio, May 7, 2007........Health Care REIT, Inc. (NYSE:HCN) announced today operating results for its first quarter ended March 31, 2007.
Recent Highlights.
  •   Completed 1Q07 net new investments totaling $219.0 million
 
  •   Reported 1Q07 FFO and normalized FAD growth of 7% and 3%, respectively
 
  •   Reported 1Q07 FFO and normalized FAD payout ratios of 84% and 91%, respectively
 
  •   Issued 6.3 million shares of common stock for $265.3 million in net proceeds in April
 
  •   Received debt upgrade to Baa2 from Moody’s Investors Service
Key Performance Indicators.
                         
    1Q07   1Q06   Change
Net income available to common stockholders (NICS) per diluted share
   $ 0.32     $ 0.34       -6 %
FFO per diluted share
   $ 0.76     $ 0.71       7 %
Normalized FAD per diluted share
   $ 0.70     $ 0.68       3 %
Dividends per common share (1)
   $ 0.64     $ 0.62       3 %
FFO payout ratio
     84 %     87 %        
Normalized FAD payout ratio
     91 %     91 %        
 
(1)   Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger.
1Q07 Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:
                                                                         
    NICS   FFO   FAD
    1Q07   1Q06   Change   1Q07   1Q06   Change   1Q07   1Q06   Change
Per diluted share
   $ 0.32     $ 0.34       -6 %   $ 0.76     $ 0.71       7 %   $ 0.73     $ 0.85       -14 %
Includes impact of:
                                                                        
Gain (loss) on sales of real property (1)
   $ 0.01     $ 0.03       -67 %                                                
Cash receipts — prepaid/straight-line rent (2)
                                                   $ 0.03     $ 0.18       -83 %
Per diluted share — normalized
                                                   $ 0.70     $ 0.68       3 %
 
(1)   $977,000 and $1,553,000 of gains for 1Q07 and 1Q06, respectively.
 
(2)   $2,078,000 and $10,310,000 of receipts for 1Q07 and 1Q06, respectively.
Dividends for First Quarter 2007. As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2007 of $0.66 per share, as compared to $0.64 per share for the same period in 2006. The dividend represents the company’s 144th consecutive dividend payment. The dividend will be payable May 21, 2007 to stockholders of record on May 4, 2007.
Raymond W. Braun Elected to Board of Directors. The company announced today the election of Raymond Braun to the Board of Directors, effective May 3, 2007. Mr. Braun is President of the company, a position he has held since May 2002, and served as Chief Financial Officer from July 2000 to March 2006. Since 1993, Mr. Braun has served in various capacities with the company, including Chief Operating Officer,

Page 1 of 15

 

 
1Q07 Earnings Release   May 7, 2007
Executive Vice President, Assistant Vice President and Assistant General Counsel. Mr. Braun also will serve as a member of the Board’s Investment and Planning Committees.
Outlook for 2007. The company affirms its investment guidance of $1.0 to $1.2 billion for 2007, which is comprised of $700 to $800 million of acquisitions and $300 to $400 million of funded new development. In addition, the company expects $100 to $200 million of dispositions, resulting in net investments of $800 million to $1.1 billion. The company is increasing its 2007 guidance for net income available to common stockholders to a range of $1.18 to $1.26 per diluted share, from $1.17 to $1.25 per diluted share primarily due to gains on sales of real property in the first quarter of $977,000. The company affirms its 2007 FFO guidance in the range of $3.06 to $3.14 per diluted share. The company is increasing its 2007 FAD guidance to a range of $2.82 to $2.90 per diluted share, from $2.80 to $2.88 per diluted share primarily due to cash receipts during the quarter of $2.1 million.
The company’s guidance excludes any impairments, unanticipated additions to the loan loss reserve, or other additional one-time items, including any additional cash payments other than normal monthly rental payments. Please see Exhibit 15 for a reconciliation of the outlook for net income available to common stockholders to FFO and FAD.
Conference Call Information. The company has scheduled a conference call on Tuesday, May 8, 2007 at 9:00 a.m. Eastern Time to discuss its first quarter results, industry trends, portfolio performance and outlook for 2007. Telephone access will be available by dialing 888-694-4702 or 973-582-2741 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through May 22, 2007. To access the rebroadcast, dial 877-519-4471 or 973-341-3080 (international). The conference ID number is 8675011. To participate in the webcast, log on to www.hcreit.com or www.earnings.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 the company’s Web site under the heading News & Events.
Supplemental Reporting Measures. The company believes that net income available to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FAD represents FFO excluding the net straight-line rental adjustments, rental income related to above/below market leases and amortization of deferred loan expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. The company believes that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of its operations. Additionally, restrictive covenants in the company’s long-term debt arrangements contain financial ratios based on EBITDA. The company primarily utilizes EBITDA to measure its interest coverage ratio, which represents EBITDA divided by total interest, and its fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred stock dividends.

Page 2 of 15

 

 
1Q07 Earnings Release   May 7, 2007
FFO, FAD and EBITDA are financial measures that are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, FFO and FAD are utilized by the Board of Directors to evaluate management. FFO, FAD and EBITDA do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, FFO, FAD and EBITDA, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see Exhibits 12, 13 and 14 for reconciliations of EBITDA, FAD and FFO.
Net operating income (NOI) is used to evaluate the operating performance of certain real estate properties such as medical office buildings. The company defines NOI as total revenues, including tenant reimbursements and discontinued operations, less property operating expenses, which exclude depreciation and amortization, general and administrative expenses, impairments and interest expense. The company believes NOI provides investors relevant and useful information because it measures the operating performance of our medical office buildings at the property level on an unleveraged basis. The company uses NOI to make decisions about resource allocations and to assess the property level performance of our medical office buildings.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a self-administered, equity real estate investment trust that invests across the full spectrum of senior housing and health care real estate, including independent living/continuing care retirement communities, assisted living facilities, skilled nursing facilities, hospitals, long-term acute care hospitals and medical office buildings. Founded in 1970, the company was the first real estate investment trust to invest exclusively in health care facilities. As of March 31, 2007, the company’s broadly diversified portfolio consisted of 597 properties in 37 states. The company also offers a full array of property management and development services. 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 and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of properties; the performance of its operators and properties; its occupancy rates; its ability to acquire or develop properties; its ability to manage properties; its ability to enter into agreements with new viable tenants for vacant space or for properties that the company takes back from financially troubled tenants, if any; its ability to make distributions; its policies and plans regarding investments, financings and other matters; its tax status as a real estate investment trust; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; its critical accounting policies; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from 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; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies; operators’ and tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and senior housing industries; negative developments in the operating results or financial condition of operators or tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with a profitable result; the failure of closings to occur as and when anticipated; acts of God affecting the company’s properties; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; the company’s ability to re-lease space at similar rates as vacancies occur; operator or tenant bankruptcies or insolvencies; government regulations affecting Medicare and Medicaid reimbursement rates; liability or contract claims by or against operators and tenants; unanticipated difficulties

Page 3 of 15

 

 
1Q07 Earnings Release   May 7, 2007
and/or expenditures relating to future acquisitions and the integration of multi-property acquisitions; environmental laws affecting the company’s properties; changes in rules or practices governing the company’s financial reporting; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes 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 15

 

 
1Q07 Earnings Release   May 7, 2007
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)
                 
    March 31,  
    2007     2006  
     
Assets
                
Real estate investments:
                
Real property owned
                
Land and land improvements
   $ 394,002     $ 267,824  
Buildings & building improvements
     3,783,163       2,712,511  
Acquired lease intangibles
     85,110       0  
Real property held for sale, net of accumulated depreciation
     4,236       15,898  
Construction in progress
     169,782       36,115  
 
            
 
     4,436,293       3,032,348  
Less accumulated depreciation and intangible amortization
     (381,448 )     (293,738 )
 
            
Total real property owned
     4,054,845       2,738,610  
Loans receivable
     256,945       177,704  
Less allowance for losses on loans receivable
     (7,406 )     (6,711 )
 
            
 
     249,539       170,993  
 
            
Net real estate investments
     4,304,384       2,909,603  
 
Other assets:
                
Equity investments
     4,700       2,970  
Deferred loan expenses
     19,767       12,042  
Cash and cash equivalents
     31,293       25,758  
Receivables and other assets
     98,510       62,267  
 
            
 
     154,270       103,037  
 
            
Total assets
   $ 4,458,654     $ 3,012,640  
 
            
 
                
Liabilities and stockholders’ equity
                
Liabilities:
                
Borrowings under unsecured lines of credit arrangements
   $ 381,000     $ 201,000  
Senior unsecured notes
     1,542,103       1,195,378  
Secured debt
     377,013       131,946  
Liability to subsidiary trust issuing preferred securities
     52,205       0  
Accrued expenses and other liabilities
     95,595       49,399  
 
            
Total liabilities
     2,447,916       1,577,723  
Minority interests
     2,354       0  
Stockholders’ equity:
                
Preferred stock
     338,993       276,875  
Common stock
     73,931       58,685  
Capital in excess of par value
     1,902,186       1,326,341  
Treasury stock
     (3,941 )     (2,714 )
Cumulative net income
     962,526       855,081  
Cumulative dividends
     (1,267,462 )     (1,080,688 )
Accumulated other comprehensive income
     (135 )     0  
Other equity
     2,286       1,337  
 
            
Total stockholders’ equity
     2,008,384       1,434,917  
 
            
Total liabilities and stockholders’ equity
   $ 4,458,654     $ 3,012,640  
 
            

Page 5 of 15

 

     
1Q07 Earnings Release   May 7, 2007
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
                 
    Three Months Ended  
    March 31,  
    2007     2006  
Revenues:
                
Rental income
   $ 105,904     $ 71,380  
Interest income
     5,149       4,262  
Other income
     1,592       366  
 
            
Gross revenues
     112,645       76,008  
 
                
Expenses:
                
Interest expense
     31,922       23,523  
Property operating expenses
     7,168       0  
Depreciation and amortization
     33,860       21,825  
General and administrative expenses
     9,793       5,976  
Loan expense
     1,267       711  
Provision for loan losses
     0       250  
 
            
Total expenses
     84,010       52,285  
 
            
 
                
Income before minority interests
     28,635       23,723  
 
                
Minority interests
     (126 )     0  
 
            
 
                
Income from continuing operations
     28,509       23,723  
 
                
Discontinued operations:
                
Gain (loss) on sales of properties
     977       1,553  
Income (loss) from discontinued operations, net
     187       (298 )
 
            
 
     1,164       1,255  
 
            
 
                
Net income
     29,673       24,978  
 
                
Preferred dividends
     6,317       5,333  
 
            
 
                
Net income available to common stockholders
   $ 23,356     $ 19,645  
 
            
 
                
Average number of common shares outstanding:
                
Basic
     73,224       58,178  
Diluted
     73,791       58,535  
 
                
Net income available to common stockholders per share:
                
Basic
   $ 0.32     $ 0.34  
Diluted
     0.32       0.34  
 
                
Common dividends per share
   $ 0.2991     $ 0.6200  
Page 6 of 15

 

 

     
1Q07 Earnings Release   May 7, 2007
HEALTH CARE REIT, INC.
Financial Supplement – March 31, 2007
     
    Exhibit 1
Portfolio Composition    
($000’s except Investment per Bed/Unit/Sq. Ft.)    
                         
    # Properties   Balance   % Balance
     
Balance Sheet Data
                        
Real Property
     564     $ 4,054,845       94 %
Loans Receivable (1)
     33       256,945       6 %
     
Totals
     597     $ 4,311,790       100 %
                         
    # Properties   Investment (2)   % Investment
     
Investment Balances
                        
Independent/CCRCs
     48     $ 550,462       13 %
Assisted Living Facilities
     208       1,045,546       24 %
Skilled Nursing Facilities
     233       1,547,904       36 %
Medical Office Buildings
     90       899,599       21 %
Specialty Care Facilities
     18       270,729       6 %
     
Totals
     597     $ 4,314,240       100 %
                                 
            # Beds/Units   Committed   Investment
    # Properties   or Sq. Ft.   Balance (3)   per metric
     
Committed Investments
                                
Independent/CCRCs
     48     5,685 units   $ 738,921     $129,977 unit
Assisted Living Facilities
     208     12,590 units     1,153,214     91,598 unit
Skilled Nursing Facilities
     233     31,668 beds     1,559,100     49,233 bed
Medical Office Buildings
     90     3,317,476 sq. ft.     899,599     271 sq. ft.
Specialty Care Facilities
     18     1,391 beds     303,299     218,044 bed
     
Totals
     597     -na-   $ 4,654,133     -na-
 
Notes: (1)
  Includes $799,000 of loans on non-accrual.
 
(2)
  Real Estate Investments include gross real estate investments and credit enhancements which amounted to $4,311,790,000 and $2,450,000, respectively.
 
    
(3)
  Committed Balance includes gross real estate investments, credit enhancements and unfunded construction commitments for which initial funding had commenced.
     
    Exhibit 2
Selected Facility Data    
                                                 
                                    Coverage Data
            % Payor Mix   Before   After
    Census   Private   Medicare   Medicaid   Mgt. Fees   Mgt. Fees
     
Independent/CCRCs
     92 %     98 %     1 %     1 %     1.39x       1.19x  
Assisted Living Facilities
     89 %     81 %     0 %     19 %     1.56x       1.35x  
Skilled Nursing Facilities
     86 %     18 %     15 %     67 %     2.19x       1.57x  
Medical Office Buildings
     92 %     100 %     0 %     0 %   -na-   -na-
Specialty Care Facilities
     58 %     22 %     57 %     21 %     2.77x       2.21x  
 
                                                
                                     
                    Weighted Averages     1.94x       1.51x  
 
Notes: (1) Data as of December 31, 2006.
Page 7 of 15

 

 

     
1Q07 Earnings Release   May 7, 2007
     
    Exhibit 3
Investment Concentrations ($000’s)    
                         
    # Properties     Investment     % Investment  
Concentration by Customer
                        
Emeritus Corporation
     50     $ 352,344       8 %
Brookdale Senior Living Inc.
     87       281,930       7 %
Life Care Centers of America, Inc.
     26       245,476       6 %
Home Quality Management, Inc.
     37       241,911       6 %
Merrill Gardens L.L.C.
     13       182,112       4 %
Remaining portfolio
     384       3,010,467       69 %
 
                  
Totals
     597     $ 4,314,240       100 %
                         
    # Properties     Investment     % Investment  
Concentration by Region
                        
South
     370     $ 2,339,300       54 %
West
     79       764,272       18 %
Midwest
     78       647,322       15 %
Northeast
     70       563,346       13 %
 
                  
Totals
     597     $ 4,314,240       100 %
                         
    # Properties     Investment     % Investment  
Concentration by State
                        
Florida
     86     $ 686,378       16 %
Texas
     75       544,023       13 %
Massachusetts
     36       327,153       8 %
California
     22       302,577       7 %
Ohio
     31       265,264       6 %
Remaining portfolio
     347       2,188,845       50 %
 
                  
Totals
     597     $ 4,314,240       100 %
     
    Exhibit 4
Revenue Concentrations ($000’s)    
                 
    Three Months Ended
    March 31, 2007
Revenue by Facility Type (1)
                
Independent/CCRCs
   $ 10,223       9 %
Assisted Living Facilities
     26,528       23 %
Skilled Nursing Facilities
     43,494       39 %
Medical Office Buildings (2)
     23,788       21 %
Specialty Care Facilities
     7,284       7 %
Other income
     1,592       1 %
     
Totals
   $ 112,909       100 %
     
 
Notes: (1)
  Revenues include gross revenues and revenues from discontinued operations.
 
    
(2)
  NOI for this period was $16.6 million, which represents $23.8 million of rental income less $7.2 million of property operating expenses.
Page 8 of 15

 

 

     
1Q07 Earnings Release   May 7, 2007
Exhibit 5
Revenue Maturities ($000’s)
                                         
    Investment Properties   Operating Properties   Interest   Total    
Year   Rental Income (1)   Rental Income (1)   Income (1)   Revenues   % of Total
           
2007
  $ 495     $ 7,431     $ 3,108     $ 11,034       3 %
2008
    0       11,228       2,689       13,917       3 %
2009
    930       5,927       1,871       8,728       2 %
2010
    578       7,442       3,387       11,407       3 %
2011
    6,921       5,877       263       13,061       3 %
Thereafter
    294,271       39,287       12,716       346,274       86 %
             
Totals
  $ 303,195     $ 77,192     $ 24,034     $ 404,421       100 %
 
Notes:   (1) Revenue impact by year, annualized.
Exhibit 6
Debt Maturities and Principal Payments ($000’s)
                                         
                            Trust    
                            Preferred    
Year   Lines of Credit (1)   Senior Notes (2)   Secured Debt (2)   Liability (2)   Total
           
2007
  $ 40,000     $ 52,500     $ 17,449     $ 0     $ 109,949  
2008
    0       42,330       26,363       0       68,693  
2009
    700,000       0       59,167       0       759,167  
2010
    0       0       12,651       0       12,651  
2011
    0       0       49,638       0       49,638  
2012
    0       250,000       20,927       0       270,927  
2013
    0       300,000       52,295       0       352,295  
Thereafter
    0       895,000       138,016       51,000       1,084,016  
             
Totals
  $ 740,000     $ 1,539,830     $ 376,506     $ 51,000     $ 2,707,336  
 
Notes:   (1) Reflected at 100% capacity.
 
   
(2) Amounts above represent principal amounts due and do not reflect unamortized premiums/discounts or the fair value of interest-rate swap agreements as reflected on the balance sheet.

Page 9 of 15

 

     
1Q07 Earnings Release   May 7, 2007
Exhibit 7
Investment Activity ($000’s)
                 
    Three Months Ended
    March 31, 2007
Funding by Investment Type
                
Real Property
   $ 163,230       67 %
Loans Receivable
     80,427       33 %
     
Totals
   $ 243,657       100 %
 
                
Funding by Facility Type
                
Independent/CCRCs
   $ 32,805       13 %
Assisted Living Facilities
     42,351       17 %
Skilled Nursing Facilities
     146,169       60 %
Medical Office Buildings
     7,999       3 %
Specialty Care Facilities
     14,333       7 %
       
Totals
   $ 243,657       100 %
Exhibit 8
Development Activity ($000’s)
                                         
    Balance at     2007 YTD     2007 YTD     Balance at     Committed  
Facility Type   December 31, 2006     Fundings     Conversions     March 31, 2007     Balances  
Independent/CCRCs
   $ 61,709     $ 16,724     $ (398 )   $ 78,035     $ 266,494  
Assisted Living Facilities
     55,197       13,888       (6,523 )     62,562       170,229  
Skilled Nursing Facilities
     14,852       3,354       0       18,206       29,402  
Specialty Care Facilities
     6,464       4,515       0       10,979       43,550  
 
                              
Totals
   $ 138,222     $ 38,481     $ (6,921 )   $ 169,782     $ 509,675  
Development Funding Projections ($000’s)
                                         
                    Projected Future Fundings        
                    2007     Fundings     Unfunded  
Facility Type   Projects     # Beds/Units     Fundings     Thereafter     Commitments  
Independent/CCRCs
     9       1,093     $ 53,712     $ 134,747     $ 188,459  
Assisted Living Facilities
     15       1,173       32,790       74,877       107,667  
Skilled Nursing Facilities
     3       247       8,450       2,746       11,196  
Specialty Care Facilities
     3       150       21,912       10,659       32,571  
 
                              
Totals
     30       2,663     $ 116,864     $ 223,029     $ 339,893  
Project Conversion Projections ($000’s)
                                     
2007 Quarterly Conversions     Annual Projections  
            Projected Average                 Projected Average  
Quarter   Amount     Initial Yields (1)     Year   Amount     Initial Yields (1)  
1Q07 actual
   $ 6,921       9.06 %   2007 projected   $ 138,892       9.13 %
2Q07 projected
     55,048       9.14 %   2008 projected     206,144       9.46 %
3Q07 projected
     29,030       9.43 %   2009 projected     111,787       10.00 %
4Q07 projected
     47,893       8.94 %   2010 projected     59,774       8.54 %
 
                            
Totals
   $ 138,892       9.13 %   Totals   $ 516,597       9.38 %
 
Notes:   All amounts include both cash advances and non-cash additions such as capitalized interest.
 
   
(1) Actual initial yields may be higher if the underlying market rates increase.

Page 10 of 15

 

     
1Q07 Earnings Release   May 7, 2007
Exhibit 9
Disposition Activity ($000’s)
                 
    Three Months Ended
    March 31, 2007
Dispositions by Investment Type
                
Real Property
   $ 10,560       43 %
Loans Receivable
     14,182       57 %
       
Totals
   $ 24,742       100 %
 
                
Dispositions by Facility Type
                
Assisted Living Facilities
   $ 22,335       90 %
Independent/CCRCs
     2,407       10 %
       
Totals
   $ 24,742       100 %
Exhibit 10
Discontinued Operations ($000’s)
                 
    Three Months Ended  
    March 31,  
    2007     2006  
Revenues
                
Rental income
   $ 264     $ 2,079  
 
                
Expenses
                
Interest expense
     77       715  
Depreciation and amortization
     0       1,437  
General and administrative
     0       225  
 
            
 
                
Income (loss) from discontinued operations, net
   $ 187     $ (298 )
Exhibit 11
                             
Current Capitalization ($000’s except share price)     Leverage & Performance Ratios  
    Balance     % Balance              
                   
Borrowings Under Bank Lines
   $ 381,000       9 %   Debt/Total Book Cap   54%
Long-Term Debt Obligations
     1,919,116       44 %            
Trust Preferred Liability
     52,205       1 %   Debt/Undepreciated Book Cap   50%
Stockholders’ Equity
     2,008,384       46 %            
                   
Total Book Capitalization
   $ 4,360,705       100 %   Debt/Total Market Cap   40%
 
Common Shares Outstanding (000’s)
     74,091             Interest Coverage   2.82x 1st Qtr.
Period-End Share Price
   $ 43.90                  
 
                          
Common Stock Market Value
   $ 3,252,595       55 %   Interest Coverage   2.91x 1st Qtr.
Preferred Stock
     338,993       5 %   - adjusted    
Borrowings Under Bank Lines
     381,000       7 %   Fixed Charge Coverage   2.28x 1st Qtr.
Trust Preferred Liability
     52,205       1 %        
Long-Term Debt Obligations
     1,919,116       32 %   Fixed Charge Coverage   2.35x 1st Qtr.
                   
Total Market Capitalization
   $ 5,943,909       100 %   - adjusted    

Page 11 of 15

 

1Q07 Earnings Release   May 7, 2007
Exhibit 12
EBITDA Reconciliation ($000’s)
                 
    Three Months Ended  
    March 31,  
    2007     2006  
Net income
   $ 29,673     $ 24,978  
Interest expense (1)
     31,999       24,238  
Tax expense (benefit)
     11       0  
Depreciation and amortization (1)
     33,860       23,262  
Amortization of deferred loan expenses
     1,267       711  
 
            
EBITDA
     96,810       73,189  
Stock-based compensation expense
     3,177       2,514  
Provision for loan losses
     0       250  
 
            
EBITDA — adjusted
   $ 99,987     $ 75,953  
 
                
Interest Coverage Ratio
                
Interest expense (1)
   $ 31,999     $ 24,238  
Capitalized interest
     2,327       202  
 
            
Total interest
     34,326       24,440  
EBITDA
   $ 96,810     $ 73,189  
 
            
Interest coverage ratio
     2.82 x     2.99 x
 
                
EBITDA — adjusted
   $ 99,987     $ 75,953  
 
            
Interest coverage ratio — adjusted
     2.91 x     3.11 x
 
                
Fixed Charge Coverage Ratio
                
Total interest (1)
   $ 34,326     $ 24,440  
Secured debt principal amortization
     1,894       643  
Preferred dividends
     6,317       5,333  
 
            
Total fixed charges
     42,537       30,416  
EBITDA
   $ 96,810     $ 73,189  
 
            
Fixed charge coverage ratio
     2.28 x     2.41 x
 
                
EBITDA — adjusted
   $ 99,987     $ 75,953  
 
            
Fixed charge coverage ratio — adjusted
     2.35 x     2.50 x
 
Notes:  
(1) Depreciation and amortization and interest expense include depreciation and amortization and interest expense from discontinued operations.

Page 12 of 15

 

1Q07 Earnings Release   May 7, 2007
Exhibit 13
Funds Available For Distribution Reconciliation
(Amounts in 000’s except per share data)
                 
    Three Months Ended  
    March 31,  
    2007     2006  
Net income available to common stockholders
   $ 23,356     $ 19,645  
Depreciation and amortization (1)
     33,860       23,262  
Loss (gain) on sales of properties
     (977 )     (1,553 )
Minority interests
     (5 )     0  
Gross straight-line rental income
     (4,231 )     (2,400 )
Prepaid/straight-line rent receipts
     2,078       10,310  
Rental income related to above/(below) market leases, net
     (460 )     0  
Amortization of deferred loan expenses
     1,267       711  
Cap Ex, tenant improvements, lease commissions
     (1,063 )     0  
 
            
Funds available for distribution
     53,825       49,975  
Prepaid/straight-line rent receipts
     (2,078 )     (10,310 )
 
            
Funds available for distribution — normalized
   $ 51,747     $ 39,665  
 
                
Average common shares outstanding:
                
Basic
     73,224       58,178  
Diluted
     73,791       58,535  
 
                
Per share data:
                
Net income available to common stockholders
                
Basic
   $ 0.32     $ 0.34  
Diluted
     0.32       0.34  
 
                
Funds available for distribution
                
Basic
   $ 0.74     $ 0.86  
Diluted
     0.73       0.85  
 
                
Funds available for distribution — normalized
                
Basic
   $ 0.71     $ 0.68  
Diluted
     0.70       0.68  
 
                
FAD Payout Ratio
                
Dividends per common share (2)
   $ 0.64     $ 0.62  
FAD per diluted share
   $ 0.73     $ 0.85  
 
            
FAD payout ratio
     88 %     73 %
 
                
FAD Payout Ratio — Normalized
                
Dividends per common share (2)
   $ 0.64     $ 0.62  
FAD per diluted share — normalized
   $ 0.70     $ 0.68  
 
            
FAD payout ratio — normalized
     91 %     91 %
 
Notes:   (1) Depreciation and amortization includes depreciation and amortization from discontinued operations.
 
    (2) Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger.

Page 13 of 15

 

1Q07 Earnings Release   May 7, 2007
Exhibit 14
Funds From Operations Reconciliation
(Amounts in 000’s except per share data)
                 
    Three Months Ended  
    March 31,  
    2007     2006  
Net income available to common stockholders
   $ 23,356     $ 19,645  
Depreciation and amortization (1)
     33,860       23,262  
Loss (gain) on sales of properties
     (977 )     (1,553 )
Minority interests
     (32 )     0  
 
            
Funds from operations
   $ 56,207     $ 41,354  
 
                
Average common shares outstanding:
                
Basic
     73,224       58,178  
Diluted
     73,791       58,535  
 
                
Per share data:
                
Net income available to common stockholders
               
Basic
   $ 0.32     $ 0.34  
Diluted
     0.32       0.34  
 
                
Funds from operations
                
Basic
   $ 0.77     $ 0.71  
Diluted
     0.76       0.71  
 
                
FFO Payout Ratio
                
Dividends per common share (2)
   $ 0.64     $ 0.62  
FFO per diluted share
   $ 0.76     $ 0.71  
 
            
FFO payout ratio
     84 %     87 %
 
Notes:   (1) Depreciation and amortization includes depreciation and amortization from discontinued operations.
 
    (2) Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger.

Page 14 of 15

 

1Q07 Earnings Release   May 7, 2007
Exhibit 15
Outlook Reconciliation
(Amounts in 000’s except per share data)
                 
    Current Outlook  
    Year Ended  
    December 31, 2007  
    Low     High  
Net income available to common stockholders
   $ 94,777     $ 101,177  
Loss (gain) on sales of properties
     (977 )     (977 )
Depreciation and amortization (1)
     151,000       151,000  
 
            
Funds from operations
     244,800       251,200  
Gross straight-line rental income
     (16,000 )     (16,000 )
Prepaid/straight-line rent receipts
     2,078       2,078  
Rental income related to above/below market leases
     (2,000 )     (2,000 )
Amortization of deferred loan expenses
     4,000       4,000  
Cap Ex, tenant improvements, lease commissions
     (7,000 )     (7,000 )
 
            
Funds available for distribution
   $ 225,878     $ 232,278  
 
                
Average common shares outstanding (diluted)
     80,000       80,000  
 
                
Per share data (diluted):
                
Net income available to common stockholders
   $ 1.18     $ 1.26  
Funds from operations
     3.06       3.14  
Funds available for distribution
     2.82       2.90  
 
Notes:   (1) Depreciation and amortization includes depreciation and amortization from discontinued operations.

Page 15 of 15